Agricultural lending in the South West is booming, according to The Agricultural Mortgage Corporation (AMC), which is enjoying a period of unprecedented growth.
While some organisations have reined in their lending to farmers due to the current economic climate, AMC has bucked the trend, increasing its finance levels in the region by 29% in the first six months of the year, compared to the same period last year.
"Many other lenders reacted to the credit crunch by significantly increasing rates or withdrawing from lending," says John O’Meara, AMC’s Regional Agricultural Manager for the South West. "The market shrunk quite quickly, but we tried to maintain a steady service to our customers – and the proof of that is in our figures."
The growth builds on the increase seen in 2008, when AMC approved over £48m of loans in the South West – a rise of more than 50% on the previous year. It also reflects a similar national trend, taking AMC’s total lending to more than £2bn for the first time.
Approvals are set to continue apace throughout the rest of 2009, says Mr O’Meara. "We are expecting to increase the level of loan acceptances in the South West by a further 33% this year, which is a fantastic boost, both for us and our farmer customers, who want to invest in their businesses and make them stronger for the future."
Nearly a third of loans completed in 2008 were for farm improvements, with 35% used to fund land purchase, and 23% to refinance existing debt on better terms. "Our clients like our flexible, lend and leave approach, which allows them to get on with the day to day running of their businesses," says Mr O’Meara. "The AMC has always supported farmers through thick and thin, and we continue to do so."
Farmers are increasingly looking to fix interest rates, and make use of long-term interest-only products designed to meet their individual needs, he adds. But others are now seeking a safe haven for their capital. "AMC has therefore introduced a new Fixed Term Deposit account for investments of £50,000 or more, for terms of three, six, and 12 months. This gives those with capital to invest a secure home for their savings in the short to medium term."
