Leonard Curtis secures £500,000 facility for family farming business

Leonard Curtis has helped a family farming business secure a £500,000 asset finance facility to provide the working capital needed to purchase fertiliser and other supplies ahead of the growing season.

The three-generation farming partnership required funding following successive years of poor weather and disappointing harvests, which had placed pressure on its financial position.

Speed was critical, with the business facing a narrow window in which to secure fertiliser and maximise the forthcoming harvest.

The farming business was introduced to Leonard Curtis through its accountant, with the funding team tasked with identifying a solution that could accommodate both its existing debt position and the uncertainty surrounding future harvest performance.

The business had recorded losses for the previous two years, while its incumbent bank had reduced its overdraft facility from £4 million to £1 million and consolidated other debts into a new £10 million facility.

Any additional borrowing also required a waiver from the existing lender, limiting the number of funders likely to consider the transaction.

Rather than approaching a broad range of lenders, Leonard Curtis targeted providers with experience in agricultural finance and identified a lender willing to support the business using a facility structured to benefit from the Growth Guarantee Scheme (GGS).

Unencumbered machinery owned by the farm was used to support a sale and leaseback arrangement, releasing capital from its existing assets.

Flexibility was also built into the funding structure to reflect the unpredictable nature of agricultural revenues. The business can make full or partial overpayments without penalty depending on the outcome of its harvest, allowing it to reduce borrowing more quickly following a strong season without becoming overcommitted if conditions prove more difficult.

Within four weeks of Leonard Curtis becoming involved, the £500,000 asset finance facility was drawn down.

The funding enabled the business to purchase fertiliser in time for the growing season while also bringing outstanding supplier payments up to date.

Leonard Curtis said it has continued to work with the family following completion of the transaction, maintaining contact with the business owners so that alternative funding options can be considered should its circumstances change.