Can Tenant Farmers Get Finance Without Owning Land?

Around a third of farmed land in England and Wales is let rather than owned, yet tenant farmers often hear the same answer when they approach a bank: without land as security, there is nothing to lend against. That is not the whole picture. Specialist agricultural lenders assess the farming business rather than the title deeds, and tenant farmers are welcome.

This guide explains how finance works when you do not own your land, what a lender looks at instead, and how to put together an application that gets a straight answer quickly. DNA Finance is a commercial finance broker, not a lender; we work with specialist agricultural lenders and manage the application on your behalf.

Why the bank says no

High-street lending to farms has traditionally been built on land value. A mortgage over the holding gives the bank comfortable security and a simple exit if things go wrong. Take the land out of the equation and many generalist lenders have no model for the application, so it is declined or offered on unsecured terms that do not reflect the strength of the business.

That is a limitation of the lender, not a judgement on your farm.

What a specialist lender looks at instead

Specialist agricultural lenders are used to Farm Business Tenancies, Agricultural Holdings Act tenancies, share-farming and contract-farming arrangements. Rather than the deeds, they focus on:

• The trading performance of the farm: accounts, bank statements and the seasonal pattern of income and costs.
• The asset being financed: a tractor, a combine, breeding stock or portable equipment can act as its own security.
• Subsidy, grant and contract income that supports repayments.
• The length and terms of the tenancy, and how they fit with the proposed repayment period.
• Your experience and a clear plan for what the funding will achieve.

Bad credit history and existing large debts are considered on their merits rather than ruled out at the first hurdle.

What tenant farmers typically finance

**Machinery.** Hire purchase or leasing for tractors, combines and implements, secured on the machine itself. The land is irrelevant to the security, so this is often the most straightforward facility to arrange.

**Livestock.** Herd and flock purchases, breeding stock and restocking, with repayments structured around sale or milk-cheque timings.

**Working capital.** Inputs, feed, fuel and labour ahead of the season, repaid when income arrives.

**Refinancing.** Releasing capital from machinery you already own outright to fund a deposit, consolidate borrowing or ease cash flow.

**Diversification.** Where the tenancy agreement permits it, projects such as holiday lets or a farm shop can be funded against the project and the farm's trading record.

How much and for how long?

Finance is available from £10,000 to £5 million over terms from 3 months to 5 years. Because land is not available as security, facilities are usually secured on the machinery or stock being funded and sized against the trading performance of the farm. Nothing is guaranteed in advance; every application is assessed on its circumstances.

Preparing a tenant-farmer application

A well-presented application gets a faster, clearer decision. Have these to hand:

1. The last two to three years of farm accounts and recent bank statements. 2. A copy of the tenancy agreement, or at least its term, rent and any restrictions on diversification. 3. A quote or valuation for the machinery or stock being purchased. 4. A simple cash-flow forecast showing when income arrives and how repayments will be met. 5. A short explanation of any adverse credit or existing debts, so they can be put in context rather than discovered.

Where DNA Finance fits in

The application is a straightforward telephone conversation rather than a stack of forms. We take the detail once, present the case to our specialist agricultural lenders and manage the process through to drawdown. An initial lending decision is typically given within 24 hours, subject to assessment, and an initial conversation has no obligation and no impact on your credit file.

Not owning your land is a feature of your business, not a barrier to investing in it.