£600,000 Refinance Supports Diversified North Devon Equestrian and Rural Business

Diversification can create resilience in a rural business, but it can also result in a more complicated financial structure over time.

For one couple in North Devon, a holding incorporating equestrian services, woodland, livestock and emerging rural tourism activities was supported by several different sources of borrowing.

UK Agricultural Finance provided a £600,000 term loan over 84 months, allowing the borrowers to consolidate ten existing loans, credit cards and other facilities into a more straightforward structure while providing additional working capital to improve the equestrian business.

The facility was introduced by Lucy Elkin of Empire Global Finance Ltd and secured at approximately 52% loan-to-value against the borrowers’ rural holding.

A Well-Established North Devon Holding

The security comprises a well-presented rural property on the edge of a North Devon village.

The holding extends to around 35 acres of ring-fenced pasture and woodland and includes a substantial listed farmhouse, traditional outbuildings, modern agricultural buildings and established equestrian facilities.

The property has been owned by one of the borrowers for many years.

He has more than 30 years of agricultural experience, having grown up on a family farm, and today combines activities on the holding with his work as a qualified electrician.

His partner also grew up in a farming environment and has around 20 years of equestrian experience.

She began riding at a young age, previously managed her family’s equestrian centre and holds a BSc in Equine Sports Science.

That experience now forms the basis of an increasingly specialised equestrian enterprise operating from the holding.

Retirement and Rehabilitation Livery

Rather than operating solely as a conventional livery yard, the borrowers have developed a particular focus on the care of retired horses and the rehabilitation of injured animals.

The holding currently has 12 stables, accommodating a mixture of full and DIY liveries, with additional horses due to arrive.

This specialist focus reflects the female borrower’s background in equine care and provides an opportunity to develop the business around an area in which she has substantial practical and academic experience.

UK Agricultural Finance Business Development Manager Sue McIntosh-Gibbs visited the holding as part of the lending assessment.

The visit confirmed that the equestrian facilities were actively being used, the property was well maintained and the borrowers had clear plans for gradually increasing utilisation of the existing infrastructure.

Part of the new facility will provide working capital for further stable improvements to support that growth.

Making Use of the Holding’s Woodland

The woodland is not simply part of the property’s amenity value.

The second borrower operates a logging and firewood business using timber from the holding, with logs predominantly sold as fuel.

The couple also undertake a small amount of livestock activity, including rearing and selling sheep and pigs.

Together, these enterprises allow different parts of the property to contribute towards the wider business rather than relying upon a single source of rural income.

Importantly, both borrowers also retain income from employment outside the holding.

The female borrower works in sales and marketing and has experience with major consumer brands.

Her partner continues to operate his electrical business and has secured a substantial three-year contract with a utilities company, providing an additional source of predictable income alongside his existing customer base.

Simplifying Ten Existing Borrowing Commitments

The principal purpose of the £600,000 facility was to consolidate the borrowers’ existing debt.

Approximately £545,000 was used to repay borrowing spread across ten loans, credit cards and other facilities.

The remainder provides working capital for improvements to the equestrian facilities.

Bringing these commitments together creates a considerably simpler financial position from which the borrowers can continue developing the holding.

The facility was structured over 84 months at approximately 52% LTV, providing strong underlying security while affordability was supported by the borrowers’ various income streams.

These include the electrical business, external employment, equestrian activity and income generated from the holding.

Developing Rural Tourism Carefully

The couple are also exploring whether rural tourism could become another meaningful element of the business.

A shepherd’s hut on the property is currently being offered as holiday accommodation as an initial test of demand.

Rather than immediately making a substantial investment in an unproven concept, the borrowers are using the existing accommodation to establish whether there is a viable market.

If demand develops as expected, their longer-term plans could include converting currently unused traditional buildings into holiday accommodation, subject to the necessary planning consents.

Their particular idea is to combine tourism with the established equestrian business.

Guests could potentially stay on the holding with their horses, creating a riding-holiday offering that makes use of both the accommodation and the existing equestrian facilities.

During the site visit, these plans appeared to have been considered carefully and are intended to be introduced gradually as resources and demand allow.

Building a Stronger Financial Track Record

One challenge for the borrowers is that some of the smaller rural activities have historically been operated relatively informally.

Separate full accounts are not currently available for all of the farming and equestrian enterprises, with some income previously passing through personal banking arrangements.

This is now changing.

A dedicated bank account has recently been opened for the equestrian business and will be used to receive future trading income.

That should help establish clearer financial records for the enterprise as it develops.

The borrowers’ longer-term objective is to use improved financial information and continued business performance to refinance onto a longer-term mainstream lending facility.

If required, the property also provides an alternative repayment route through the potential sale of land or other assets.

Diversification Built Around Real Skills

One of the strengths of this case is that the different activities are not simply speculative diversification ideas.

The equestrian operation builds upon decades of practical horse experience and a formal qualification in Equine Sports Science.

The electrical business is operated by a qualified tradesperson with an established customer base and a significant new contract.

The logging enterprise makes productive use of woodland already present within the holding.

And the tourism opportunity is being tested initially through an existing shepherd’s hut before larger projects are pursued.

That combination gives the borrowers several sources of income while allowing new ideas to be developed progressively.

For UK Agricultural Finance, the case was therefore not simply about consolidating ten debts into one facility.

It was about providing a clearer financial structure for a well-maintained rural holding operated by experienced borrowers who have already established several complementary sources of income and have realistic plans for further development.

For rural businesses with valuable agricultural property but a borrowing structure that has become unnecessarily complicated, refinancing can sometimes provide the breathing room and clarity needed to focus on developing the business itself.