Case Studies

In 2020, LCM and Rural Asset Finance (“RAF”)  launched a new UK-based Asset Finance lender designed specifically to cater for the needs of the agricultural industry. Through RAF’s experience and unique positioning within the market, we have been able to provide specialist asset-backed financing to UK farmers in the form of secured land and property-backed loans to complement traditional hire purchase and leasing equipment finance products. This enterprise has built on RAF’s existing model, and their exemplary team of experienced origination, credit, and legal professionals, to support clients, both pre-existing and new.

Support for innovation

One attribute we look for in a partnership is innovation, particularly where there is potential to add benefit to the wider economy.

Since 2020, we have witnessed unprecedented challenges within UK farming, from the Covid-19 pandemic to the ramifications of Brexit and loss of European subsidies. In recent years, the war in Ukraine had a significant impact on food inflation and input prices in areas such as energy and fertiliser.

However, as a result, the agricultural industry has had to pivot in its methods of production and approach to technology in order to meet the challenges of the day. This has prompted an accelerated evolution of technology and automation in farming which may otherwise have taken decades to arrive.

The combined impact of Brexit and the pandemic has made it increasingly difficult for farms to access the casual labour market so farmers have needed to respond through investment in machinery which is where RAF can help. One Norfolk pumpkin farm replaced 80 seasonal workers with a single tractor-mounted mechanical hoe. Another customer leased a machine to pack and wrap trays of leeks and asparagus automatically, a normally labour-intensive task requiring precision judgement to avoid wastage of any excess or penalties from the supermarkets for any underweight packs supplied.  What’s more is that both investments paid for themselves within the first year.

With so many perceived challenges for the sector as a whole, traditional lenders have become less accommodating to the agricultural industry, at a time when their support has been needed most.

We know that UK farming is resilient and will rise to the challenge so we have been able to deploy increasing capital into a sector crying out for investment in its hour of need. We are happy to work with farmers to allow them to invest to improve efficiency and productivity, the benefits of which are not only specific to the sector but to the wider economy. This is exactly the sort of change we wish to affect with our partnerships and look forward to supporting many more borrowers within this space in conjunction with our partners at Rural Asset Finance.