Einion Jenkins had ambitions to expand his farm on the edge of the Welsh Mountains near Machynlleth and started with planning a new slurry store. With part of the project being funded by a grant he needed to find the rest of the funding urgently as the grant had to be used in a short timescale. Unfortunately, after deliberating for some time, Einion’s bank declined his proposal for funding.
Einion found a loan offer through a broker at an interest rate of 11%, which wasn’t attractive. That was when his farm consultant, David Evans of Rural Options, called on the help of R&BS.
Understanding the farm’s long-term vision is crucial
With limited time to secure the grant, we had to act quickly. Jim Richards at R&BS discussed the wider farm issues and plans with Einion and realised there was a bigger picture to consider other than the immediate funding needs.
Einion planned to expand the Welsh Black suckler herd from 60 to 100 and significantly increase his sheep flock to 700 Welsh Mule ewes. He needed capital to buy in livestock, but his existing bank was not prepared to give him additional funds. Einion was stuck and frustrated.
To get the best chance of getting competitive funding, the financial information of Einon’s current farming operation needed bringing up to date and we had to clearly show lenders where the business was heading.
It wasn’t going to be possible to find funding for the slurry store on more favourable terms in the short time required, so after considering the early repayment charges, we advised Einion to take the broker offer. This secured the grant funding and gave us more time to look at a beneficial refinancing solution.
Working with other professional advisers to create clear plans
Once this was agreed, we asked Einion’s accountants for up-to-date farm and management accounts; and worked with David Evans to produce business plans and five-year financial forecasts to demonstrate Einion’s business ambitions.
We now had a pack of financial information along with a clear business and financial strategy for the farm which highlighted its borrowing needs for the future ready to present to banks.
The bank agrees funding that had previously been declined
It made sense to approach Einion’s existing bank first as they held the relationship and the security, and they were the most cost-effective route. The bank agreed our lending proposal immediately with no further questions or information requested. It sailed through their approval process.
This was a complete turn-around – previously they did not want to extend any further borrowings, and now they were going to double the existing borrowings!
Einion says, “I’d got to a point where I thought there were no options left. But I put my faith in R&BS, and working with their specialist financial and banking knowledge alongside David at Rural Options has made all the difference. It goes to show what can be achieved when you have the right team of people around you.”
Many businesses struggle with communicating clearly with the banks of lenders. But that’s where R&BS can help. We’ve years of experience in farm and rural banking and know exactly what lenders want to see and hear.