Ongoing demand for locally sourced meat products meant that this successful agricultural business was keen to invest in new housing units for livestock. However, the large initial outlay required would put some stress on their cash flow and the owners were keen to find a finance partner that would support the venture.
The farm owners contacted Close Brothers Commercial Finance and discussed their requirements and goals with a local asset finance expert. We suggested that a leasing solution could give them full use of the assets without the high upfront investment needed to purchase them.
Finance leases work simply. The business pays a monthly rental fee over a fixed period, which gives uninterrupted use of the equipment. During this period, they will pay the full cost of the asset, including interest, and at the end of the primary lease term they can decide whether to continue renting, retain title if they sign a LADCO letter, sell it on, or return it to us.
This farming business has benefited from the flexibility the finance lease provides. We have worked closely with them to tailor a rental period and repayments so that the assets do not impede their access to working capital. This has improved cash flow and means that they are able to use better and more up-to-date equipment without the responsibility of owning it.