Agricultural asset refinance, release working capital from farm machinery and equipment

Agricultural asset refinance, most commonly done through a sale and HP leaseback arrangement, allows you to release cash from farm machinery or equipment that you already own outright. You sell the asset to a finance company at an agreed value, then immediately lease it back under a hire purchase or finance lease agreement. You retain full use of the machine throughout, continue farming with it as normal, and pay regular instalments to buy it back over an agreed term. The capital released goes directly to your farm account and can be used for any business purpose.

The amount you can release depends on the current market value of the asset and the lender's loan-to-value appetite. Most agricultural lenders will advance between 60 and 80 percent of the asset's current market value on a refinance. For a tractor valued at £80,000, that means releasing between £48,000 and £64,000 in working capital. The advance is against current value, not original purchase price, so older machines or those with high hours will generate a lower advance than newer, lower-hour equipment. We will be upfront about realistic expectations before you proceed.

Most tangible agricultural machinery and equipment can be refinanced, provided it is free of existing finance charges, in working condition, and has clear market value. Tractors, combine harvesters, telehandlers, self-propelled sprayers, balers, grain handling equipment, and specialist harvesting machinery are all refinanceable. Older machines, very high-hour equipment, or highly specialised assets with limited secondary market appeal may be declined by some lenders or attract a lower advance. Assets that are fixed to land, such as grain stores or permanent buildings, are typically handled through secured lending rather than asset refinance.

Agricultural asset refinance can typically be completed in 48 to 72 hours from initial approval to funds in your account, provided the asset documentation is in order. In some cases, same-day or next-day completion is possible. This speed is one of the most significant advantages of asset refinance over a bank overdraft or loan, where credit committee processes and documentation requirements can take weeks. If you have an urgent cashflow need, for a VAT bill, spring inputs, or an unexpected cost, asset refinance is one of the fastest routes to liquidity available to a farming business.

For a straightforward sale and leaseback, yes: the asset must be owned outright and free of any existing finance charges. If there is a small amount of existing HP remaining on a machine that has a much higher market value, it may be possible to refinance by settling the existing finance at the same time as arranging the new facility, with the net release being the difference between the advance and the settlement figure. We will check the position on any asset before proceeding and will be clear about what is achievable.

No. Agricultural asset refinance is secured against specific machinery rather than being a general business loan. This makes it faster to arrange, more accessible to businesses that a bank might not lend to on an unsecured basis, and independent of your bank's appetite or credit assessment at a given moment. The interest rate on an asset refinance facility may be higher than a secured bank overdraft where your relationship is strong, but the speed of access, the lack of dependency on a banking relationship, and the predictable repayment structure make it a different and often more practical tool for managing farm cashflow.