Agricultural businesses urged to explore all financial options
Graeme McNaughton, National Director for Barclays Agriculture, writes about the help available for agricultural businesses during the Covid-19 pandemic.
These are incredibly uncertain times for most businesses, and agricultural businesses are no different. Despite their designation as key workers and the vitally important role they are playing in our food supply chain, many of Scotland’s farmers are experiencing the same challenges as other business leaders.
While the sector is generally in good shape, we are noticing certain farms bearing the brunt of the lockdown more than others. But we’ve also been seeing some positive signs for other areas of the industry as home food consumption has increased.
Workforce levels are creating a problem for some, which the government is attempting to rectify by highlighting that furloughed workers can apply to work on farms with the reassurance that their finances will not be impacted. As key workers, farmers are also now eligible for testing for Covid-19, which will hopefully see many who are self-isolating return to work.
Of course, many of the problems we are seeing are economic and relate to cashflow, and Barclays has been helping our agricultural clients, from individual farm owners to private estates, adapt to the current economic challenges.
When having discussions with your bank, there could be a number of options available to your business to ease financial pressures. For example, we are working with our customers to offer overdraft increases and 12-month capital repayment holidays where possible.
We are also helping our customers access government support where they are eligible. The Coronavirus Business Interruption Loan (CBIL) will be a viable option for many agricultural businesses, for example. To access this loan, your lender will require certain evidence to prove that your business was viable before Covid-19. This will likely include up to date management information, annual accounts, and forecasts with confirmation that the additional funding, repayment of which would begin after 12 months, is affordable.
The smaller Bounce Back Loan scheme could also be an option for those unable to access CBIL, and the UK Government is also offering VAT deferral until the end of June as an additional lift on financial pressure.
While things may seem bleak now, there is a lot of support available to agricultural businesses struggling to cope as a result of the pandemic – it is often just a matter of speaking to your lender to explore all of your options.
Graeme McNaughton is the National Director for Barclays Agriculture.