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Supporting rural businesses through the current crisis

The COVID-19 pandemic is causing huge challenges for rural businesses. Alistair Christie explains how our Galbraith AMC agents can help.  

The closure of café’s, restaurants and coffee shops has had a significant impact on the demand for fresh food, with some dairy farmers in particular suffering from a collapse in milk prices where suppliers are aligned to the catering industry.

Supply chain issues and staffing shortages are also a problem across all farming sectors and around 10% of agricultural workers are estimated to be ill or self-isolating at any one time. Despite this, vital farming activities such as lambing, calving and spring arable operations must continue.

Whilst there are predictions of a 20% - 25% contraction in GDP, Fraser of Allander Institute are forecasting a 2% - 5% growth in the agricultural sector.

Alistair Christie, a partner with land agent Galbraith commented:

This is usually a cash-hungry time of year for rural businesses. No matter how the current situation plays out, AMC finance can at least provide a financial lifeline in these difficult times.

With the Bank of England base rate reducing to 0.1% on 19th March which is a new historical low, we swiftly saw money market prices for long term lending at fixed rates being offered at highly attractive rates, making the prospect of considering long term fixed money highly attractive.’

AMC focuses on long term finance, with loan terms of up to 30 years, with interest only and fixed rate options offered subject to lending criteria.’

Despite the uncertainty, it could be the right time for rural businesses to assess their business borrowing requirements, be that existing or new borrowings, while these low rates apply.

Galbraith has made numerous loan applications for a variety of reasons in recent weeks including land and farm purchases, re-structuring of existing debt, payments to business partners, working capital for infrastructure projects and construction of farm houses. These applications are now being undertaken remotely.

Despite the current situation, Galbraith has conducted a number of successful closing dates since the lockdown, which demonstrates the continuing demand for agricultural and rural properties.

Alistair Christie continued:

Often when the financial markets are in turmoil, the stability of agriculture is recognised and valued. Whilst the annual return on capital invested might be marginal, history shows that over long periods of time, well-managed land proves to be an appreciating asset and a safe haven in times of economic uncertainty.

Galbraith agents are also able to assist with valuations for all purposes, BPS / IACS submissions, woodland grant applications and Woodland Carbon Code registration along with Voluntary Registration of titles, using technology rather than face to face meetings.