Lloyds Bank has launched a new loan aimed at supporting farmers through the shift to sustainable and regenerative agriculture, in a move the bank says responds to mounting pressures across the sector.
The Agricultural Transition Finance loan is open for all farming sectors, starting at £25,001. Lloyds says the product is intended to help farmers manage the financial strain often associated with changing practices, though take-up will depend on how individual businesses weigh the costs and risks of transition.
The bank argues the loan could support improvements for “nature and the environment”, while helping producers plan for long-term resilience. Lee Reeves, Lloyds’ UK Head of Agriculture, said the aim is to “smooth the financial pathway for farmers during the critical early years of transition” and provide flexibility during a period of significant structural change.
Farmers at any stage of their sustainability plans can apply, with eligibility tailored to individual priorities. Applicants select from 16 regenerative activity standards, covering practices such as cover cropping, reduced tillage, direct drilling, herbal leys, mob grazing, companion cropping and intercropping.
To qualify, farmers must provide a carbon or environmental baseline assessment from the last two to three years. Participation in Defra environmental schemes, supply-chain programmes or accreditation such as organic certification or LEAF Marque may also meet requirements.
After two years, borrowers are asked to show proportionate progress, with Lloyds stating that evidence demands have been kept “streamlined and farmer-friendly”, particularly for smaller farms.
The loan includes an arrangement fee waiver, flexible drawdown options, expanded credit support and up to five years of interest-only payments. These features are intended, Lloyds says, to help farmers manage potential short-term pressures, such as upfront machinery costs or temporary yield reductions when adopting new systems.
Reeves described the loan as the bank’s first product designed specifically for whole-farm transition. “As the largest lender to UK agriculture, we are dedicated to supporting farmers in building resilient, sustainable businesses that help rural communities thrive,” he said, adding that it forms part of a plan to make over £35bn of new finance available in 2026 to companies investing in the UK.
The announcement comes as farmers navigate shifting subsidy schemes, erratic weather, rising input prices and tighter environmental expectations. While many producers are exploring regenerative approaches, some industry groups note ongoing uncertainty over long-term policy direction and uneven uptake across sectors.
The loan follows Lloyds’ Farming with Nature report, which assessed 5.1 million hectares to identify where financial and environmental returns could be aligned.
