Farm Diversification Loan Helps Anglesey Holiday Park
At UK Agricultural Finance, we understand that rural businesses often evolve over time. Farms diversify, families adapt, and unexpected challenges can arise. Access to flexible finance can make all the difference when it comes to stabilising a business and planning for the future.
Working alongside broker Ian Adams of Bathgate Leasing Ltd, UK Agricultural Finance recently provided a £275,000 farm diversification loan over 84 months to support a family-run rural business on Anglesey. The funding allowed the borrowers to consolidate existing debts, clear HMRC arrears, and invest in improvements that will support both the business and their family succession plans.
The loan was secured against a diversified rural property and represented a low loan-to-value of approximately 18%, giving the borrowers the breathing space they needed to continue developing their successful holiday park.
A Diversified Farm Business in a Strong Tourist Location
The security property is a 30-acre rural holding on Anglesey, a well-established tourist destination and a key route to the Holyhead ferry port. The site includes:
- A three-bedroom farmhouse with an adjoining one-bedroom annexe
- A range of traditional and modern farm buildings
- A caravan and holiday park with around 50 pitches
- A clubhouse with bar facilities
- A dog exercise area
- A hard-standing caravan storage area
- Approximately 20 acres of grazing land
The caravan and camping park provides the core of the business income. Of the available pitches, 40 are hard-standing seasonal pitches let on licences from March to October. These pitches have been occupied by the same regular customers for many years, providing a stable and predictable income stream.
The remaining pitches are let on nightly rates during the season, generating higher short-term revenue and offering flexibility to visiting tourists. The site benefits from strong demand and positive online reviews, with these pitches consistently fully occupied during the main season.
During the winter months, around 35 caravans are stored on-site behind the clubhouse for a fee, providing an additional ancillary income stream.
From Beef Farming to Tourism: A Successful Diversification
The borrowers have been running their farming partnership for more than 35 years. The husband has spent his entire career in farming, while his wife worked off the farm before retiring several years ago to help manage the business.
Like many rural enterprises, the farm has evolved over time. Originally a beef farm, the business later diversified into a karting track, which operated successfully until it closed during the Covid pandemic.
Rather than reopening the karting operation, the family saw an opportunity to adapt again and developed the site into a caravan and holiday park, capitalising on the area’s strong tourism market.
Today the business combines:
- Caravan and camping pitches
- Holiday accommodation
- Caravan storage
- Grazing land for a small flock of sheep
This diversification has created multiple income streams and allowed the business to continue growing.
A Family Business Facing Personal Challenges
The borrowers are a married couple in their late fifties who have built the business together over many years. More recently, the family has faced difficult personal circumstances, with the husband experiencing significant health issues.
As a result, his wife has taken on the majority of the day-to-day management and operational responsibilities for the business, while he continues to contribute where he can.
Their two sons are also increasingly involved in supporting the business. The younger son assists his mother with the day-to-day running of the caravan site alongside his full-time role as a plant operator.
Their older son also helps where possible and currently rents a commercial unit on the farm for £500 per month, used for his welding business. The family’s growing involvement in the business forms an important part of their long-term succession plans.
Why the Borrowers Needed a Farm Diversification Loan
Although the business was performing well, the borrowers were carrying two existing secured loans totalling approximately £210,000, alongside HMRC arrears of around £30,000.
These legacy liabilities were placing pressure on the business finances and limiting their ability to invest in the property.
The borrowers approached UK Agricultural Finance seeking a solution that would:
- Consolidate their existing secured borrowing
- Clear HMRC arrears
- Provide funding to refurbish the annexe
- Simplify their overall financial position
As with many rural lending cases, the security property was diversified and somewhat unusual, combining residential elements, tourism facilities, agricultural land and commercial buildings. Additionally, the rural property market on Anglesey can be relatively idiosyncratic.
This is where specialist agricultural lenders can make a significant difference.
How UK Agricultural Finance Structured the Loan
UK Agricultural Finance provided a £275,000 term loan over 84 months, secured against the farm and holiday park.
The funding was used to:
- Repay the borrowers’ two existing secured loans
- Clear outstanding HMRC arrears
- Fund the refurbishment of the annexe
The loan represented a very low loan-to-value of approximately 18%, providing strong security while giving the borrowers the flexibility to stabilise their finances and focus on running the business.
With turnover increasing year-on-year and stable, positive EBITDA, the business demonstrated a strong ability to service the loan.
Supporting Succession Planning and Future Income
The refurbishment of the annexe will also play a key role in the family’s succession plans.
Once the work is completed, the borrowers intend to move into the annexe, allowing their older son and his partner to move into the farmhouse and pay rent to them.
Over time, the long-term intention is for the farmhouse and a small surrounding area of land to be sold to the son for around £270,000, subject to mortgage approval. The net proceeds could be used to reduce or repay the UK Agricultural Finance loan.
This structure provides both additional income and a clear pathway for the next generation to take greater involvement in the business.
Future Diversification Plans for the Holiday Park
The family continues to invest in developing the site further. Later this year they plan to apply for planning permission to construct a large conservatory extension to the front of the clubhouse bar area.
This would create additional space for entertainment and allow the venue to host external food vendors and members of the public, something that has already been trialled successfully during the previous season.
Work has also begun on reconfiguring the first floor of the clubhouse into two three-bedroom flats. One will operate as a holiday let, while the other will provide accommodation for their younger son.
In addition, the family already has planning permission to convert old brick barns into further holiday lets, which would create additional income streams and increase the overall value of the property.
Much of the work carried out so far has been completed by the family themselves, reflecting their commitment to growing the business for the future.
A Positive Outlook for a Growing Rural Business
Despite the challenges the family has faced, the business remains profitable and continues to grow. Turnover has increased year-on-year, supported by strong demand for caravan pitches and holiday accommodation on Anglesey.
The diversified income streams, combined with the family’s long-term plans to expand the holiday letting side of the business, provide a solid foundation for future success.
With the support of their sons and wider family, the borrowers are well placed to continue developing the site and building a sustainable business for the next generation.
Supporting Rural Businesses Through Farm Diversification Loans
Sue McIntosh-Gibbs, Business Development Manager at UK Agricultural Finance, commented:
“Rural businesses often need flexible finance solutions, particularly when they have diversified operations or unusual security. In this case, the borrowers had built a successful holiday park but needed support to consolidate their debts and move forward with their plans.
“It was important for us to provide a solution that not only stabilised the business finances but also supported their family succession plans and future diversification. We’re pleased to have been able to help them move forward during a challenging period and continue developing their business.”