Are personal guarantees or security required for agricultural finance?

Most UK agricultural finance involves a personal guarantee, security over the asset being funded, or both. Unsecured working capital loans without a PG are rare in agriculture because lenders see seasonal cashflow, weather-driven income volatility, and asset-heavy balance sheets that lend themselves to charge-based lending.

Three patterns dominate. First, asset finance against tractors, combine harvesters, dairy parlours, sprayers and grain stores: the asset is the primary security, but most lenders also take a personal guarantee from the principal farmer or partner. Second, commercial mortgage or land-charged term loan: a first or second charge over farm land or buildings is standard, with margin lending often layered through specialist banks like OakNorth and Allica Bank. Third, unsecured cashflow facilities for sub-£100k tickets: typically PG-only, no charges, but with rates 3 to 6 percentage points above secured equivalents.

Lenders that treat agriculture as a specialist sector include Oxbury Bank, Aldermore, Allica Bank, Time Finance and the agricultural arms of mainstream banks. The Government's Annual Investment Allowance and full expensing rules make hire-purchase asset finance especially tax-efficient for farm machinery, which is why most UK farms run a portfolio of HP agreements rather than a single large loan.

For specifics on rates, see what are the typical interest rates and fees for agricultural business finance in the UK. For the lender-decline-and-recover route, see will lenders require security or personal guarantees for agriculture finance.