Unlocking working capital in uncertain times

Cash flow has always been one of the biggest pressure points for farming, but recent seasons have made it even tougher. Input costs can move quickly (fertiliser in particular) while income often often arrives much later. Even well-run farms can find working capital stretched just when flexibility matters most.

When we speak to farming businesses, the issue is rarely long-term viability. More often, it’s timing. Bills need paying now, opportunities need acting on, and traditional funding routes don’t always move at the same pace.

One option that’s often overlooked is the value already sitting in the yard.

Most farms hold significant value in tractors, combines, telehandlers and other essential machinery. Once paid for (or partly paid for), that value often does nothing for cash flow. Asset-based finance allows farmers to release equity from existing plant and machinery while continuing to use it as normal – keeping the farm running smoothly during busy periods.

This doesn’t just apply to machinery that’s mortgage-free.

In many cases, existing finance can be refinanced, with a new lender settling the old agreement and releasing any available equity back into the business. That can mean access to working capital without waiting for contracts to end or putting extra pressure on overdrafts.

Where speed matters, this kind of funding can often be arranged quickly, making it useful for:

• Managing rising input costs
• Smoothing seasonal cash flow gaps
• Investing in efficiency improvements
• Reducing short-term borrowing pressure

Case Study

Plant & machinery refinance

Goal: Quick release of £250,000 for farm investment

Result: Improved liquidity & supported operational upgrades

Client

Mixed arable and livestock farm

Existing position

Significant value tied up in tractors, telehandlers, and core machinery. Rising fertiliser costs and farm improvements creating pressure on working capital.

Challenge

• Input cost volatility impacting cash flow
• Need to invest in fertiliser and infrastructure improvements
• Avoid increased overdraft or unsecured borrowing

Solution

• Structured refinance of existing plant and machinery, including assets already under finance. New lender settled existing agreements and released equity
• New facility: £250,000 released against existing equipment with a flexible term aligned to seasonal cash flow

Outcome

• Immediate funding for fertiliser and improvements
• Full use of machinery retained
• Improved working capital position
• Greater financial flexibility

Key benefit

• Funds released within days, not months – without waiting for existing agreements to end.

This won’t be the right solution for every farm, but in uncertain conditions it’s worth stepping back and asking whether existing assets could be working harder to support the business. If you’d like to talk through what might be possible with your current plant and machinery, we’re always happy to have a conversation. Contact our Commercial Finance team here.