Take stock of your business and consider re-financing
With coronavirus still devastating the economy and the uncertainty of the future post-Brexit, farmers and land managers should take stock of their businesses and consider re-financing as a means of reducing costs.
Interest rates remain low and switching to longer term borrowings at a competitive rate could reduce outgoings during this challenging economic climate.
Opting for a long term AMC (Agricultural Mortgage Corporation) loan at current attractive rates could ease your cash flow and might well suit your needs if you are buying more land or investing in buildings or off-farm business assets.
The AMC has a unique role specialising in medium and long-term mortgages and loans for farms and rural businesses with fixed or variable rates for up to 30 years and provided you meet your commitments, loans are uncallable, securing your farm for future generations.
For a loan of £750,000, a 30-year repayment loan (on the same interest rate) would result in monthly loan commitments being around £1,000 a month less than if repaid over 20 years.
Interest-only loans can make time-specific opportunities (like buying land) much more affordable.
Sarah Reece, partner at the Shrewsbury office of Berrys.
