Case studies
Case study: Securing working capital to keep a family farm's growing season on track
Background:
- Working capital needed to purchase fertiliser
- Speed was critical with a narrow window to secure supplies in time
- Flexibility required to allow overpayments depending on harvest outcome
A long-standing family farming partnership, spanning three generations and multiple stakeholders, had been hit hard by successive years of poor weather and disappointing harvests. With the growing season approaching, the business needed working capital to purchase fertiliser and other essential supplies, but its existing lending position made this far from straightforward. The business needed a solution that was fast, proportionate, and flexible enough to reflect the uncertainty of the season ahead.
Our Approach:
The client was introduced to Leonard Curtis through their accountant, who quickly identified that a funding solution could support the family to maximise the harvest. The matter was passed to the funding team to take forward.
Time was taken to meet with the family, listen to their concerns, and fully understand their strategy. This was a business operating in a sector facing challenges in the current economic environment so access to appropriate solutions from a professional who would work with them was paramount.
The financial position added real complexity. The business had been loss making for two years, and its incumbent bank had reduced its overdraft facility from £4m down to £1m, consolidating other debts into a new £10m facility that still needed to be serviced. Any further borrowing would require a waiver from the existing lender, narrowing the pool of funders likely to have appetite for the deal.
Recognising this, the team approached a select group of lenders with genuine agricultural expertise, rather than casting a wide net. One lender was identified who was willing to support the business, structuring the facility to benefit from the Growth Guarantee Scheme (GGS). Unencumbered machinery on the farm was used to support a sale and leaseback arrangement, providing the capital needed without adding pressure to an already stretched balance sheet.
Throughout, the priority was building a structure the family could live with, not just one that worked on paper. This meant securing the flexibility to make full or partial overpayments, without penalty, depending on how the harvest turned out, ensuring the business was not left carrying more debt than necessary in a good year, nor overcommitted in a poor one.
Within four weeks of engagement, a £500,000 asset finance facility was drawn down. This allowed the business to purchase fertiliser in time for the growing season and bring supplier payments up to date, easing pressure that had been building for some time.
The relationship with the family did not end at completion. Ongoing contact has been maintained with the business owners, ensuring Leonard Curtis remains on hand to pivot to an alternative solution should circumstances change, and giving the family confidence that support extends well beyond a single transaction.
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Leonard Curtis is a trading style of Reach Commercial Finance Limited, registered at Leonard Curtis House, Elms Square, Bury New Road, Whitefield, M45 7TA. Company Register number is 09056450. Reach Commercial Finance Limited is authorised and regulated by the Financial Conduct Authority, FRN: 753686. Reach Commercial Finance Limited is an authorised credit broker and not a lender. We work with an unrestricted number of lenders to find a potentially suitable arrangement for your consideration. ICO registration ZA069234 and you can check via www.ico.org.uk. We will receive commission from lenders. Different lenders pay different amounts depending on different commission models. For transparency we work with the following commission models: fixed fee, fixed rate of commission, percentage of the amount you borrow and rate for risk (this is based on the risk profile of the business). Further details of the commission model, calculation and amount will be disclosed to you throughout your customer journey. Privacy notice.
Leonard Curtis Legal Limited is a limited company, registered in England and Wales with registered number 09820186. Registered office: Leonard Curtis House, Elms Square, Bury New Road, Whitefield, M45 7TA. Leonard Curtis Legal Limited is registered with the Solicitors Regulation Authority with number 626004.