What Documents Do I Need Before Applying for a Farm Loan?

Applying for a farm loan involves providing information about you, your business and the agricultural property being used as security. Getting the key documents together early can make the application process more straightforward and help the lender build a clear picture of your circumstances.

At UK Agricultural Finance, our agricultural finance is secured against agricultural land and property and can be used for a range of credible business purposes, including purchasing property, refinancing, working capital, business growth, investment and diversification.

So, what should you have ready before making an application?

What documents are needed for a farm loan?

The exact documents required can vary depending on the application and underwriting requirements. However, there are several important pieces of information we require to begin our underwriting process.

These include:

• A signed Offer in Principle
• A signed GDPR form for all borrowers
• Three months of personal bank statements for all borrowers
• 12 months of business bank statements
• Identification
• Proof of address
• Three years of financial accounts and/or SA302s or P60s for all borrowers
• An Income and Expenditure Form for the business and each borrower
• Details of the borrower’s solicitor
• Title numbers and addresses for the property being taken as security

Once this documentation has been received, one of our underwriters can complete the assessment of the application.

What identification will I need?

When applying for a farm loan, you will need to provide identification and proof of address.

Suitable identification can include a photo driving licence, passport or firearms certificate. Proof of address could include a recent bank statement, utility bill or council tax bill.

All borrowers also need to sign a GDPR form. This allows us to undertake a credit search as part of the application process.

Why do I need to provide bank statements and accounts?

An important part of responsible farm lending is understanding whether the proposed loan is affordable and how it will be repaid.

Your personal and business bank statements, financial accounts and income and expenditure information help our underwriters assess the financial position of both you and the business.

Our responsible lending approach means we only lend where a borrower can demonstrate that the loan is affordable, can add value to the business and has a credible plan for repayment.

Providing complete and accurate financial information is therefore an important part of applying for farm finance.

What information will I need about my farm or land?

UK Agricultural Finance loans are secured against agricultural land and property. As part of your application, we will therefore need the title numbers and addresses of the property being offered as security.

These details allow us to obtain accurate quotations from our valuation panel.

Further property documents may be needed as the application progresses. Depending on the property and circumstances, the valuer may request information such as tenancy agreements, leases, EPCs and details relating to grant funding or stewardship schemes.

If you are considering agricultural loans for a land purchase or another property-related purpose, having relevant property information readily available can help you prepare for the process.

Do I need a business plan?

This will depend on the purpose of the farm borrowing.

For example, if you are seeking rural diversification finance, we will want to understand how much you need to borrow, what the funds will be used for, what the proposed security is worth, any existing debts and how you intend to repay the loan.

For a diversification application, additional information may include a business plan, details of your team’s expertise and a net worth statement.

Whatever the reason for borrowing, it is important to be clear about what you want the finance for and your repayment strategy.

Do I need a solicitor for a farm loan?

As part of the application, we will ask for details of the solicitor acting for you.

Legal work is an important part of secured farm finance, so having your solicitor’s details ready can help prevent unnecessary delays later in the process.

How can I prepare for a farm finance application?

The amount of information required for a farm loan application can initially seem daunting, but being organised from the beginning can make the process easier.

Before approaching us, it can be useful to gather your recent bank statements, financial accounts, identification, proof of address and property details. You should also be ready to explain how much you want to borrow, what the money will be used for and how you intend to repay the loan.

With the right information, we can provide an Offer in Principle and then guide you through the remaining underwriting, valuation and legal stages.

If you are considering a farm loan and want to understand what information you will need for your circumstances, contact UK Agricultural Finance to discuss your requirements with our team.