Will lenders require security or personal guarantees for agriculture finance?
Short answer: often yes — but it depends on the product, amount and your farm’s profile
Most UK lenders will ask for security or a director’s personal guarantee when funding agricultural businesses, but the requirement varies by finance type, loan size, and business strength. Asset finance is usually secured on the equipment, while cashflow loans often need a personal guarantee from directors. Strong financials, valuable assets, or government‑backed schemes can sometimes reduce or reshape security and guarantee requirements.
At Best Business Loans, we don’t lend money or provide advice; we help you identify suitable providers and products so you can make informed decisions. The guidance below explains how lenders assess risk in UK agriculture and how that translates into security and personal guarantee requests.
What counts as “security” or a “personal guarantee”?
Security is an asset a lender can take if the business cannot repay, such as machinery, vehicles, livestock, property or receivables. A personal guarantee (PG) is a promise by a director or owner to repay the debt personally if the company cannot. Some products are “self‑secured” on the asset being funded, while others rely on PGs or a mix of both.
Important context for farmers and agribusinesses
Agriculture is capital‑intensive and seasonal, so lenders focus on asset quality, cashflow seasonality, and commodity exposure. Facilities are structured to align repayments with yield cycles, subsidies timing, and contracts where possible. The more transparent and predictable your farm’s cashflow, the more flexible lenders can be on security and guarantees.
Important risk notice
Where security is given, your business assets may be at risk if you do not keep up repayments. Where a personal guarantee is given, you could be personally liable for the outstanding debt. Best Business Loans is an independent introducer and does not provide loans, credit broking, or financial advice.
When do lenders require security or a personal guarantee for agriculture finance?
Lenders decide based on risk and recoverability. If the product offers strong collateral, such as a tractor on hire purchase, the asset will often be the primary security, with a PG sometimes requested as a secondary comfort. If the funding is unsecured working capital, a PG is common, and tangible security may be requested as limits rise.
Typical expectations by broad category are as follows. Asset finance is secured on the machine or vehicle, sometimes with a PG depending on your credit profile, deposit, and asset age. Invoice finance is secured on receivables, and some providers add a PG, usually limited to fraud or concentration risks in non‑recourse models.
For revolving credit and term loans, smaller limits may be PG‑only if the business is strong, while higher limits may require a debenture or specific charges over assets. For property‑backed loans, land and buildings are the principal security, and PGs may still be requested for corporate borrowers.
In agriculture, lenders frequently prefer assets that hold value and are easy to register a charge against. That includes tractors, combines, telehandlers, milking parlours, and certain processing kit. Livestock finance exists but requires specialist lenders and controls, and security arrangements are more nuanced.
Government‑backed guarantees, like the British Business Bank’s programmes, are support to the lender, not a guarantee to you. Lenders may still require PGs and other security, though restrictions typically apply regarding principal private residences.
As a rule of thumb, the more predictable your turnover and the higher the residual value of assets, the lighter the PG requirement can be. Conversely, younger businesses, tight cashflow, or volatile markets usually see stronger security and PG conditions.
Fast checklist: what to expect
- Under £50k unsecured: PG likely; security may be optional.
- £50k–£250k unsecured: PG standard; debenture or asset charges possible.
- Asset finance: charge on the asset; PG sometimes required.
- Invoice finance: charge over receivables; PG varies by facility type.
- Property‑backed: legal charge over land/buildings; PG for limited companies common.
Key factors that influence security and guarantee requirements
Product type matters more than anything else. Secured products lean on tangible assets by design, while unsecured facilities rely on PGs, affordability, and business stability to mitigate risk. Lenders also examine whether the facility is amortising, revolving, or seasonal, and how it will be used on farm.
Loan size, term, and structure directly affect the security mix. Larger amounts and longer terms typically require stronger security and a PG, especially if cashflows are uneven. A higher deposit or lower loan‑to‑value (LTV) can reduce PG pressure.
Business financial strength and trading history are critical. Profitable multi‑year accounts, clean credit files, consistent subsidy receipts, and long‑term supply contracts can all reduce perceived risk and lower the likelihood of blanket guarantees.
Asset quality and re‑saleability are closely scrutinised. Newer, branded machinery with robust secondary markets provides better security than highly specialised or obsolete kit. Well‑maintained assets with verifiable provenance command better terms.
Ownership and legal structure play a part. Limited companies are often asked for director PGs; partnerships may see partners jointly and severally liable by default; sole traders are personally liable. Complex group structures may trigger cross‑guarantees or intercompany considerations.
Purpose and seasonality shape repayment and comfort. Funding inputs ahead of harvest or buying livestock before finishing needs a carefully aligned repayment plan. Misaligned terms can raise risk and push lenders toward stronger security or PGs.
Documentation that helps reduce perceived risk
- Up‑to‑date management accounts and filed statutory accounts.
- 12–24‑month cashflow forecasts tied to cropping plans and contracts.
- Asset schedules with serial numbers, valuations, and maintenance records.
- Evidence of subsidies, BPS/SPS history, environmental scheme payments, or offtake agreements.
- Bank statements showing steady transactions and headroom.
How common agriculture finance products treat security and PGs
Different products carry different expectations. Knowing these norms helps you choose an option that matches your risk appetite and security position. Below is a concise comparison to set expectations for UK farm businesses.
Typical security and guarantee patterns by product
| Finance type | Usual security | PG expectation | Notes |
|---|---|---|---|
| Hire Purchase / Lease (machinery, vehicles) | Charge on the asset | Sometimes required | Deposit and asset age influence PG. |
| Asset Refinance | Charge on existing asset | Often required | Useful for unlocking equity in equipment. |
| Invoice Finance (recourse) | Debenture/charge over receivables | Often required | Coverage varies with debtor quality. |
| Invoice Finance (non‑recourse) | Charge over receivables | Sometimes limited to fraud | Higher fees; transfer of credit risk. |
| Unsecured Term Loan | None specific | Usually required | Security may be added as limits rise. |
| Revolving Credit/Overdraft | Debenture or none | Commonly required | Seasonal limits tie to peak cycles. |
| Property‑Backed Loan | Legal charge over land/buildings | Often required | Lower pricing; longer terms possible. |
| Livestock Finance | Stock control/retention of title | Often required | Specialist; strong controls needed. |
Sector‑specific nuances to be aware of
Arable and mixed farms often rely on machinery funding, seasonal working capital, and invoice finance if supplying processors with terms. Dairy farms may invest in parlours and herd genetics, sometimes pairing equipment HP with feed finance.
Horticulture and glasshouse operations can be capital intensive with energy overlays, where lenders like clear energy contracts and automation assets. Specialist producers, such as organic or niche crops, should document market demand, contracts, and price support to strengthen cases.
If your farm has notable land value but limited free cashflow, property‑backed lending can unlock growth at lower rates. If you prefer to avoid property charges, asset finance plus more modest unsecured lines may suit, but PGs will likely apply.
Government‑backed guarantees
British Business Bank schemes aim to increase lender confidence, not to remove commercial risk for borrowers. Lenders still run full underwriting and may require PGs, though rules typically prevent taking security over your principal private residence.
Availability, eligibility and terms change over time, and lenders apply scheme rules differently. Always check current scheme guidance, and confirm what security and PGs apply before you proceed.
Practical ways to reduce or reshape security and personal guarantee requirements
Improve affordability and working capital visibility. Provide realistic cashflow forecasts aligned with planting, calving, or harvest cycles, and evidence of headroom at trough points.
Use deposits and sensible LTVs. A higher deposit on machinery or a lower advance against invoices can reduce the need for PG or counter‑security.
Choose products that fit the asset. Fund tractors on HP, use invoice finance for contracted receivables, and line up seasonal overdrafts for inputs rather than long unsecured term loans.
Consider diversifying collateral instead of one large property charge. Multiple asset charges across machinery can sometimes replace a full debenture, although this depends on the lender.
Strengthen the application with credible documents. Include asset schedules, contracts, herd registers, and maintenance records to support valuations and recoverability.
Explore PG insurance if a guarantee is unavoidable. Some directors choose to insure part of their PG exposure, noting that cover, cost, and exclusions vary by provider.
How Best Business Loans helps
We do not lend or advise; we help you navigate the market efficiently. Our platform uses AI matching and a network of lenders and brokers to introduce you to providers aligned to your sector, asset mix, and objectives.
If you want detail on sector‑specific funding options, see our resource on agriculture business loans. You can submit a Quick Quote to check potential eligibility with no obligation.
Compliance, fairness, and clarity
Any information you provide is handled securely and shared only with suitable finance professionals relevant to your enquiry. We aim for content that is clear, fair, and not misleading to support informed decisions.
All facilities are subject to status, affordability, credit checks, and the lender’s criteria. Terms, fees, and security/PG requirements vary by provider and may change.
Getting prepared — documents, steps, and FAQs
Preparation helps you secure options with lighter security or PG conditions. It also speeds up decisions and improves pricing outcomes where possible.
Start by collating core documents. Then map facility needs to farm cycles, and decide which assets you’re comfortable offering as security, if any.
What to prepare before you seek funding
- Latest filed accounts plus year‑to‑date management figures.
- 12–24‑month cashflow forecast with key assumptions stated.
- Bank statements for 6–12 months, all business accounts.
- Asset register with makes, models, serial numbers, and estimated values.
- Details of subsidies, grants, contracts, and forward sales agreements.
- Existing finance agreements and settlement figures.
How the Best Business Loans process works
- Complete a Quick Quote form with your needs and basic profile.
- Our AI system matches your details to potential providers in our network.
- We introduce you to relevant lenders or brokers so you can compare options.
- You make the decision — no obligation and no direct fees from us.
Common questions about security and PGs
Can I get agriculture finance with no PG? It is possible, especially for lower‑risk asset finance, strong balance sheets, or where land is pledged, but many unsecured products still require PGs.
Will a government guarantee remove the PG? Not necessarily; it supports the lender’s risk, but many providers still require a PG and will not take your principal private residence as security.
Can I limit my PG? Some lenders accept capped or limited guarantees, typically aligned with loan size, LTV, or risk factors. Availability varies and may affect pricing.
What happens if I default with a PG in place? If the business cannot repay, the lender may pursue guarantors personally for the outstanding amount, plus fees and interest, subject to the guarantee terms.
Next step: check eligibility with no obligation
If you want to explore providers that match your sector, assets, and goals, submit a Quick Quote on BestBusinessLoans.ai. We will introduce you to suitable partners so you can compare structures, security options, and PG requirements.
This page is for information only and does not constitute financial advice. Updated October 2025.
Summary: Key takeaways
- Many agriculture finance products require either asset security, a personal guarantee, or both.
- Asset finance is usually secured on the machine; unsecured loans often need a PG.
- Stronger financials, deposits, and well‑chosen products can reduce PG/security pressure.
- Government guarantees support lenders but rarely remove PGs entirely.
- Prepare clear forecasts, asset details, and contracts to improve outcomes.