Agricultural Finance: How a Young Couple Secured Their First Farm with a £200,000 Term Loan
At UK Agricultural Finance, we’re proud to back the next generation of rural entrepreneurs, those with the drive, skill, and determination to carve out their own future in farming and land-based business. In this case, I had the pleasure of working directly with a young couple who, despite not inheriting land themselves, were determined to purchase their own land and build something of their own.
Turning Ambition Into Action
The borrowers came to us with a clear and practical goal: to buy two lots of land and a set of farm buildings that would provide both a base for their work and long-term income. With backgrounds in agriculture-adjacent roles, such as contracting, grooming, and hay sales, alongside a stable employed income, they had a strong footing and a well-thought-out plan.
Although they weren’t working with a broker, they were well-prepared. Their deposit of around £150,000 was raised through a combination of personal savings and cash gifts from family, a powerful example of intergenerational support helping to bring new entrants into land ownership.
The Right Loan Structure for Long-Term Growth
We provided a term loan of £200,000 over 84 months, secured against a well-located rural property that included:
- 12 acres of agricultural land
- 23 agricultural buildings, totalling around 40,000 square feet
Many of the buildings are currently let out, used for storage, workshops, and small-scale manufacturing, including a metal fabrication business. The site benefits from mains water, three-phase electricity, and a sub-metered water supply. The Loan-to-Value (LTV) was around 55%, reflecting a sensible risk profile and the borrowers’ strong personal commitment.
Existing Income and Strong Foundations
At the time of purchase, four tenants were already in place, generating an annual income of approximately £15,000. This immediate rental stream gave the borrowers a solid foundation while they began implementing their wider business plan.
Importantly, the site isn’t overleveraged. With half the buildings unoccupied but already attracting interest from local businesses, there’s clear scope for increasing revenue.
Future Diversification: Growing the Business
The borrowers have a focused and achievable diversification strategy:
- Letting the remaining buildings, with expected rental income of a further £10,000 per year
- Winter sheep grazing on the 12 acres, aiming for 40 sheep at £1 per head per week
- Summer hay production, with plans to produce and sell 80 small bales per acre, targeting the equestrian and farming markets
This blend of commercial lettings and traditional land use reflects the modern rural economy, where resilience often comes from balancing enterprise with agriculture.
A Sensible Repayment Plan
The couple intend to service the loan throughout its full term, making capital repayments where possible. At the end of the 84-month term, they plan to refinance with another lender, supported by financial accounts showing the matured rental income.
It’s a practical and realistic approach, one we’re confident will succeed given their work ethic and strategic thinking.
Why This Case Matters
This is exactly the kind of project we love to support at UK Agricultural Finance. The couple are:
- Hands-on, with relevant experience
- Financially committed
- Backed by family, but not reliant on inheritance
- Focused on creating a viable business—not just buying a property
Louise Old’s Perspective
“It was a pleasure to support this couple in taking their first steps into farm ownership. With their hands-on experience, practical plans, and a determination to build something of their own, they embody the entrepreneurial spirit we’re proud to support at UK Agricultural Finance.”
Looking to Build Your Rural Business?
Whether you’re looking to purchase land, develop rural buildings, or recover and restructure an existing enterprise, UK Agricultural Finance offers bespoke loans tailored to your circumstances. We understand rural business, and we’re here to help you grow.