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14 Nov 2023

Finance case study: farm building development finance

Finance case study: farm building development finance
Finance case study: farm building development finance

Jane was embarking on a huge project of converting farm buildings into five holiday lets and a rental property. From the very beginning of the project, she had to ensure that she had a strong team on board to help her with the planning, development and crucially, the finance.

Jane owns 200-acre Woodside Green Farm, near Bishops Stortford. After deciding to sell her herd of 160 Holstein cows, she looked for another project. Her husband, Andrew and his brother Robert were farming 1,170 acres of predominantly arable land as a separate business, Schwier Farms Ltd.

Jane achieved full planning approval to convert the farm buildings at Woodside Green into one buy-to-let property and five holiday lets. Jane would focus on managing the properties, while Schwier Farms would take on the farming at Woodside Green under a share or contract farming agreement. This would give the farming business more land to help with economies of scale and diversify the family's income streams.

Getting full funding for the duration of the development project was critical

Jane needed a substantial amount of finance to develop the six properties. She took on the services of Rob Lister at R&BS, before the project achieved planning.

Jane said: “It was crucial that I had full funding throughout the development process - I didn't want to be left with a half-built proposition. Rob understood my situation, explained the financial implications and gathered all the relevant information very professionally. I had total confidence using his services, and ultimately he got me the full amount and a deal that I was very happy with.”

With such a large staged project, sometimes lenders are only willing to consider funding the first stage of the project, and only once that is completed, consider further funding to complete the project – usually offering staged payments as each property or group of properties were developed.

This means extra costs in fees associated with each separate loan, and a heavy reliance on the lender remaining supportive throughout the project.

R&BS requested specific lending conditions from multiple banks

Rob's priorities were to find a lender who would offer:

  • funding for the development in one payment at the start of the project, rather than offer staged payments 
  • a long-term mortgage facility for up to 25 years
  • an initial 12-month interest only basis while the new properties are developed
  • a commitment to a loan margin for a period of five years
  • competitively priced interest rate margins and fees with minimum terms and covenants.

Rob pulled the farm and rental property historical and projected income and costs together. Working closely with the team of architects, designers, planners, quantity surveyors, project managers and builders he also gathered costs and timescales for each stage of the development. He put this information to several lenders with a lending proposal and strict requirements. 

After we'd submitted the lending proposal, we had several lenders interested, and took the lender who offered the full loan amount in one staged development, which was also at a very competitive rates.


Whether you are looking for development funding for a farm project, or just the most suitable mortgage terms for your business, please give us a call, email us or visit us at Farm Business Innovation. We'd love to help you.


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