The strongest first quarter in eight years has been recorded showing the highest value of loan applications from the UK’s agricultural businesses since 2010.
The Agricultural Mortgage Corporation (AMC) recorded a 0.8 percent uplift in Q1 of this year and a 7.7 percent rise compared to Q1 2015.
The value of refinancing loans applied for in the first three months of this year was also higher than in any other first quarter since 2010, making up for 54 percent of total loans requested.
The arable sector has overtaken dairy to have the largest weighting of refinance term loan applications from AMC during the period.
It accounted for 64 percent of the total value of loans of this type, and 25 percent of total loans.
With more arable businesses undertaking diversification projects, such as in tourism and renewable energy, these businesses could be looking for the long-term support of refinancing for a degree of financial certainty and to increase the provision of sustainable cashflow to get these projects off the ground.
The dairy sector made up for just 8.5 percent of total value of refinancing loans, which is in sharp contrast to the comparative period in 2017 when dairy customers made up for 25 percent of total refinancing loan applications.
Andrew Naylor, Managing Director of AMC, comments on why there has been a surge in popularity for these longer-term loans: “These latest figures show that more farmers, particularly in the arable sector, are applying for our term refinance loans.
“Funding existing loans over a longer term with an AMC refinance product will ease cashflow, and release working capital for the day to day running of businesses and future investments.
“It’s not surprising that applications from the dairy sector are down on last year. It was a challenging period for the sector, which I’m pleased to see is in a better place now that the milk price has recovered somewhat.”
