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7 Ways Agriculture Businesses Can Make the Most of Asset Finance
Asset finance is one of the more powerful financial tools in the agriculture company toolbox. Designed as a method to offset capital investment through regular monthly payments, asset finance is extremely flexible and can be tailored to meet your business’s precise needs.
The need to keep ahead of the curve with equipment, maintain and improve infrastructure, and meet increasingly difficult sustainability targets puts a constant strain on capital. Asset finance lifts that burden, providing partnerships between your business and finance companies that keep things moving smoothly, no matter the season.
Clifton Private Finance is here to offer advice and access to the most cost-effective asset finance. Here are 7 ways your agriculture business can make the most of asset finance - and how it can keep you profitable and stable in an ever-changing world.
Asset Finance for Agricultural Business Growth
Developing and expanding an agricultural business is heavily dependant on physical assets. Powerful plant machinery and specialist vehicles form the core of many agricultural enterprises - areas where asset finance truly shines.
The huge level of investment needed to create and sustain a competitive farming or agricultural business is staggering, and with income dependent B2B contracts that are often hampered by supply chain challenges and seasonal conditions, maintaining confident cash flow can be complicated.
Large capital expenditures used to invest in depreciating physical assets can tie up working capital, forcing expansion plans to take a backseat to the simple process of maintaining operations.
Asset finance spreads the cost of these essential investments in a flexible way.
7 Ways Agriculture Companies Can Make the Most of Asset Finance
1. Buying New Machinery and Equipment
The clearest use for asset finance in agriculture is to purchase the costlyheavy machinery and equipment needed to maintain operations.
Vehicles, such as tractors and combine harvesters are major investments that will quickly decimate existing capital if bought outright. Smaller transportation, like quad bikes or pickups, can be similarly obtained, meaning you never have to struggle to justify an investment in basic day-to-day machinery.
Asset finance isn’t limited to vehicles however. Everything from balers to feed mixers can be obtained. With a specialist asset finance partner and comprehensive growth plan, you can develop your business with minimal initial outlay.
2. Smoothing Maintenance
Asset finance is often tied with maintenance contracts, taking the administrative headache away from vehicle and machinery ownership. If something goes wrong, specialist maintenance teams and insurance will handle everything behind the scenes, making sure you don’t suffer from extended downtime.
With a full maintenance contract, your equipment will be brought back to full working order, with temporary replacement machinery available to keep operations running in the meantime.
3. Exploring High-Tech Options
New technology is always coming to market and during the first few years, it can seem too expensive to invest in. Unfortunately, competitors able to make the leap can suddenly soar ahead, improving their workflow and delivering results that put them at the very head of the game.
Once done, you can either invest further in that area if it suits your business, or move away without having over-extended your capital.
4. Managing Seasonal Demand
The fluctuations of seasonal needs has a huge impact in the agricultural industry. Often, there’s a demand for more hands and - by extension - more vehicles, more machinery, and more equipment.
This approach allows you to boost operations when required, and scale back as needed in quieter months.
5. Expanding into New Areas of Operations
Having the agility to move your business in new directions is essential for any agricultural enterprise looking to thrive in today’s ever-changing world. However, fully investing in a completely new area is risky, tying up capital and resources. Once more, asset finance provides an answer.
By lightening the load on initial spend and spreading the cost of a new project until it is generating revenue, asset finance can open previously closed doors, giving your business a boost and providing the flexibility you need to compete.
6. Improving Infrastructure
While asset finance is traditionally seen as being only for machinery, it has many wider applications. For agricultural businesses, another area that can benefit from spreading costs is with prefabricated and modular buildings.
Silos, sheds, and barns can all be obtained using specialist asset finance, enabling you to improve your physical storage and infrastructure without the need for capital-draining outlay.
7. Meeting Energy and Sustainability Goals
With the growth of alternative energy options and sustainability platforms, businesses in the agriculture industry are being called upon to upgrade equipment and improve energy usage to meet national and international net zero targets. These investments, while important, can be expensive.
Asset Finance in Agriculture: Beyond Vehicles
Many businesses tie asset finance to vehicles, and there’s plenty of justification to do so. Purchasing cars and vans on hire purchase or lease agreements has been a staple part of both business and personal vehicle ownership for decades.
However, this viewpoint is also somewhat short-sighted, ignoring the many ways that asset finance can be used to support those in the agricultural sector beyond simply buying a truck or tractor.
Today’s market for specialist asset finance can be leveraged to smooth the cost of any purchase that has a valid physical component. This can include everything from prefab buildings to new IT equipment to run the farm. In specialist cases, there are even asset finance providers willing to consider livestock as a suitable asset to finance, giving you the power to expand your business across many different avenues.
Don’t hold your business back from a mistaken limitation - speak to a CPF specialist and let us help you find the asset finance you need.
Asset Finance with Clifton Private Finance
Clifton Private Finance is a specialist whole-of-market business finance broker. We have established relationships with the diverse market of both traditional and independent asset finance lenders, opening the door for you to obtain the low-cost targeted funding you need to boost your agriculture business.
Contact an adviser today to discuss your individual circumstances. Our team will listen to your requirements and the difficulties you have faced so that we can put together a comprehensive plan for effective funding.
We’ll compare lenders and match you to the ones who are the best fit for your actual needs, considering your business position, financial forecasts, and credit history. With access to the whole marketplace of lenders, we can find a deal that will ensure you get the assets you need. Book a free consultation now.
