How much can I borrow for farm equipment or working capital?
Most established UK farms can typically borrow £10,000 to £5,000,000, depending on turnover, asset value, credit profile, and security available. For farm equipment, asset finance commonly funds up to 90–100% of the VAT‑exclusive cost over 2–7 years. For working capital, unsecured options usually range from £10,000 to £500,000, while secured facilities can extend from £250,000 to £5,000,000 or more, subject to provider criteria and affordability.
How much can UK farms typically borrow?
Typical borrowing ranges at a glance
Farm equipment finance: £15,000 to £5,000,000+ for tractors, combines, telehandlers, dairy parlours, packing lines, renewable kit, and precision ag tech. Providers often lend up to 90% LTV on new assets and 70–85% on used, subject to age and residual value. Terms usually run 24–84 months with seasonal or deferred payment profiles available.
Working capital loans: £10,000 to £500,000 unsecured for established limited companies with solid trading history. Secured loans or revolving facilities can reach £250,000 to £5,000,000+, with security over land, buildings, equipment, stock, or a debenture improving capacity and pricing. Invoice finance limits typically sit at 70–90% of eligible debtor balances.
Government‑backed support: Under the British Business Bank’s Growth Guarantee Scheme, eligible SMEs may access term loans, revolving credit, or asset finance via accredited lenders. Limits and availability depend on lender participation, your business profile, and scheme rules at the time of application.
Key factors that set the ceiling
Turnover and profitability influence maximum unsecured exposure, with common guide rails of c. 10–25% of annual revenue for sound credits. Debt service capacity, cash flow seasonality, and overall gearing determine affordability and risk appetite. Security strength, asset quality, and sector outlook shape LTVs and headroom for larger tickets.
Indicative terms you might see
Equipment finance: 2–7 year terms, fixed or variable rate, optional balloon payments on high‑value kit to keep repayments down. VAT deferral is often available on hire purchase to assist cash flow at purchase. Seasonal or annual instalments can align with harvest or milk cheque cycles.
Working capital: 6–60 month terms for unsecured loans with fixed monthly repayments. Revolving credit and invoice finance flex with trading levels, offering headroom as sales rise. Security and guarantees can increase limits and reduce pricing, but introduce asset risk if obligations are not met.
Important note on variability
All figures are indicative and not offers. Amounts, terms, and rates depend on lender criteria, credit assessment, and the specifics of your farm. Late repayment can negatively affect your credit profile and may result in the repossession of secured assets.
What decides your borrowing power?
Affordability and cash flow
Lenders assess Debt Service Coverage Ratio (DSCR) — typically seeking at least 1.25x for term loans and asset finance. They review margins, subsidies, input cost pressures, diversification income, and volatility in yields. Evidence of stable or improving cash generation strengthens cases for higher limits.
Security and asset strength
For equipment, lenders underwrite to asset value, brand, age, hours, and secondary market liquidity. For working capital, charges over land, buildings, livestock, or machinery can materially increase limit sizes. Personal guarantees are common for SMEs, and may be limited or unsupported depending on the case.
Trading history and credit profile
Most providers prefer 12–24 months’ trading as a minimum and three years for larger facilities. Strong payment performance with HMRC and existing finance is a positive indicator. Clean credit files, robust management accounts, and timely filed statutory returns improve outcomes.
Sector and enterprise mix
Dairy, arable, horticulture, poultry, and mixed farms each carry different risk dynamics and seasonality. Diversified income — such as AD plants, holiday lets, farm shops, or contracting — can boost resilience and eligibility. Exposure to commodity volatility and input price spikes is considered in stress testing.
Documentation that supports a higher limit
- Last two to three years’ filed accounts and current management accounts
- 12 months’ business bank statements and aged debtor/creditor reports
- Asset lists, valuations, or sales quotes for equipment
- Land registry details, existing charges, and security schedules
- Forecasts and seasonality explanations for repayment profile
Finance structures that influence the amount
Equipment finance options
Hire Purchase (HP): Own the kit at term end, with potential VAT deferral and balloon to manage monthly cost. Lenders may fund up to 90–100% of ex‑VAT cost for prime assets and strong credits. Terms of 3–7 years are common for high‑value machinery with predictable residuals.
Finance Lease: Pay rentals to use the equipment, with potential secondary leases at a peppercorn rate. Often suits farms wanting 100% financing of the asset cost plus soft costs. Residual risk sits with the funder, which can support competitive rentals.
Operating Lease: Lower rentals due to a meaningful residual value underwritten by the funder. Best for equipment where you plan to refresh regularly. Not all kit qualifies given residual risk considerations.
Asset Refinance: Release equity against owned machinery to raise working capital. Typical LTV is 60–80% of forced sale value, depending on age and market. Useful for consolidating multiple payments into one or funding a new season’s inputs.
Working capital options
Unsecured Term Loan: Fixed monthly repayments over 6–60 months, sized to affordability. Best for discrete needs like inputs, repairs, or small projects. Limits often align with turnover and EBITDA comfort.
Revolving Credit Facility: Draw, repay, redraw within an agreed limit, offering flexibility. Useful for seasonal cash dips ahead of harvest or subsidy receipts. Security can convert a small revolving limit into a materially larger one.
Invoice Finance: Unlock 70–90% of eligible B2B invoices within 24–48 hours of issue. Particularly relevant for farms doing contract work, processing, or supplying trade buyers. Limits scale with your debtor book and concentration levels.
Merchant Cash Advance: Repay via a share of card takings, aligning cost with trading. More common in farm shops or visitor attractions with card revenue. Limits are typically smaller and priced higher than secured lines.
Seasonality features for agriculture
- Seasonal or annual repayments aligned to harvest or milk payment cycles
- Capital repayment holidays at the start of term for equipment instalments
- VAT deferral on HP to smooth upfront outlay on major purchases
Worked examples and repayment scenarios
Example 1: Tractor acquisition via Hire Purchase
Asset: New tractor priced at £120,000 + VAT, with strong residuals projected. Funding: 90% HP on ex‑VAT cost = £108,000 financed, with VAT deferred. Term and structure: 5 years, fixed rate, optional £12,000 balloon to reduce monthly costs.
Illustrative monthly impact: With a balloon, monthly repayments are materially lower than straight‑line amortisation. Seasonal profiles could allow lower payments in low‑income months. Ownership transfers after final payment, subject to fees and conditions.
Why the amount works: The lender relies on asset value, brand, and resale strength plus your DSCR. Providing service logs, warranty details, and a clear utilisation plan supports underwriting. A deposit or part‑exchange can further de‑risk the structure.
Example 2: Working capital line for inputs
Requirement: £350,000 to pre‑buy feed, fertiliser, and parts ahead of the season. Option A: Unsecured term loan at 36 months if EBITDA allows 1.25x DSCR. Option B: Secured revolving facility at £500,000 with land or machinery security for headroom.
Illustrative usage: Draw £300,000 in spring, repay to £100,000 after harvest receipts. Interest is only charged on utilised amounts for revolving lines. A mix of input supplier credit and a facility can lower average cost.
Why the amount works: Security and demonstrated seasonal cash conversion push limits higher. Management accounts and forward sales contracts support confidence in repayment. A small personal guarantee may be requested to align incentives.
Important illustration notice
These are not quotes, offers, or indicative rates. Repayments vary by provider, pricing, fees, and your credit profile. Seek tailored illustrations before making commitments.
Eligibility, application steps, FAQs and next steps
Who we can help and how we work
Best Business Loans is an independent introducer that connects established UK limited companies and LLPs with suitable finance providers. We do not supply loans directly or provide financial advice. We currently do not support start‑ups, sole traders, franchises, property finance, or commercial mortgages.
Our platform uses data‑led matching to introduce you to lenders or brokers active in UK agriculture. That includes options for equipment, vehicles, working capital, and invoice finance. You stay in control of who you speak to and what you choose.
How to apply — simple steps
- Complete a Quick Quote with your business details and funding need.
- Our system matches your profile to suitable providers in our network.
- You review introductions and share documents for assessment.
- Receive tailored options, compare terms, and decide what fits.
Submitting a Quick Quote is free and without obligation. You will see key costs and terms before proceeding with any provider. Decisions and timescales vary by product and lender.
Ways to potentially borrow more
- Provide up‑to‑date management accounts and 12 months’ bank statements.
- Offer appropriate security or a realistic deposit where relevant.
- Demonstrate seasonality, forward contracts, and risk mitigation clearly.
- Consolidate expensive short‑term debts to improve DSCR.
- Choose assets with strong residuals to support higher LTVs.
Frequently asked questions
Can I get 100% finance for farm machinery?
Some lenders will fund up to 100% of the VAT‑exclusive cost for prime assets and strong credits. VAT is often deferred on HP to ease cash flow. Availability depends on asset type, age, and your financials.
What is a realistic unsecured working capital limit?
Many established farms see unsecured limits from £25,000 to £250,000, with stronger, larger businesses reaching £500,000. Lenders often benchmark against turnover, profitability, and DSCR. Clean credit and stable cash generation are key.
How long can I spread equipment repayments?
Two to seven years is common, subject to the asset’s life and residual value. High‑value tractors and combines may justify longer terms with a balloon. Seasonal profiles can align with your income cycle.
Do I need to give a personal guarantee?
Personal guarantees are common for SME lending, particularly unsecured facilities. The extent can be limited or unsupported depending on the structure. Security over assets may reduce PG exposure but introduces asset risk.
How quickly can funds be in place?
Smaller unsecured lines can sometimes be approved within days once documents are complete. Equipment finance timescales vary with asset checks and invoicing. Complex secured facilities typically take longer due to valuations and legals.
What documents should I prepare?
Recent accounts, management accounts, bank statements, and ID documents are standard. Equipment quotes or asset schedules are needed for kit funding. Forecasts and seasonality notes help present a clear affordability case.
Can I match repayments to milk cheques or harvest?
Yes, seasonal structures are common in agricultural finance. Options include lower payments in low‑income months or annual instalments. Discuss seasonality early to design a suitable profile.
Where can I learn more about farm‑specific finance?
Explore our dedicated page on farming loans and sector‑specific options. You’ll find guidance across equipment, vehicles, and cash‑flow facilities. Visit our farming loans hub here: farming loans.
Key takeaways
- Equipment finance commonly ranges from £15,000 to £5,000,000+, with up to 90–100% of ex‑VAT cost funded for prime assets.
- Working capital limits span from £10,000 to £500,000 unsecured, and £250,000 to £5,000,000+ when appropriately secured.
- Your ceiling depends on DSCR, security, asset quality, credit profile, and sector seasonality.
- Seasonal payment structures, VAT deferral, and balloons can improve cash‑flow fit.
- Submitting a Quick Quote helps you compare relevant options without obligation.
Start your funding search
Answer a few questions to get matched with UK providers who understand agriculture. Compare equipment finance, working capital loans, revolving credit, and invoice finance in one journey. Get your free Quick Quote and check eligibility with no obligation.
Important information and fair‑marketing notice
Best Business Loans is an independent introducer and does not provide loans, credit broking to consumers, or financial advice. We introduce UK businesses to third‑party lenders or brokers who may be able to help, subject to their criteria. All finance is subject to status, affordability, and provider terms; rates and fees vary and may change.
Security may be required; your assets could be at risk if you do not keep up repayments. Information on this page is for general guidance only and is not a recommendation or an offer. We aim to keep content fair, clear, and not misleading in line with UK advertising standards.
Updated: October 2025.