Specialist agricultural lender Rural Asset Finance has agreed a funding facility of up to £120m, supported by NatWest Bank, BCI Capital and the British Business Bank’s ENABLE Guarantees programme.
The transaction is designed to expand lending to rural businesses across the UK and underlines a continued commitment to sustainable growth in the agricultural sector.
The facility will allow Rural Asset Finance to increase the availability of both asset finance and term loans for smaller businesses, with funding provided by NatWest and BCI Capital.
A portion of the NatWest facility is guaranteed through the British Business Bank’s ENABLE programme, which reduces the capital requirements for lenders and encourages greater funding to small and medium-sized enterprises.
Rural Asset Finance, which launched in 2019, focuses exclusively on the UK’s agricultural economy, offering tailored finance solutions that combine equipment finance with business loans.
The lender supports a broad range of farm-related activity, including high-tech food production and diversification into alternative revenue streams.
Matthew Smart, managing director of Rural Asset Finance, said the new facility would enable the business to deliver a highly competitive proposition to UK farmers at a crucial time.
“With the support of the British Business Bank’s ENABLE Guarantees programme, alongside lenders NatWest Bank and BCI Capital, this enhanced facility carries an attractive credit margin,” he said.
“As a result, we are now best placed to support farmers driving efficient high-tech food production, as well as those diversifying into alternative revenue streams.
“Food production and diversification on UK farms are key to ensuring a healthy, robust future for the industry and the wider rural economy in the current challenging geo-political landscape.”
ENVIRONMENTAL TARGETS
The agreement incorporates a sustainability-linked pricing mechanism, offering Rural Asset Finance a margin adjustment if specified environmental targets are met. This structure reflects an increasing trend towards sustainable finance in the agricultural sector.
Michael Strevens, managing director, structured FI solutions at the British Business Bank, said the deal was the latest example of the ENABLE programme supporting underserved sectors.
“Collaborating with established capital providers like NatWest and BCI Capital allows us to increase the availability of funding for non-bank lenders such as Rural Asset Finance and, through them, the smaller businesses they lend to,” he said.
“In addition, by including a pricing incentive linked to sustainability objectives we hope to see further expansion of small business lending in sustainable areas, including farm renewable energy installations.”
NatWest and BCI Capital, who are jointly funding the facility, welcomed the opportunity to back a lender focused on agricultural and rural businesses.
Matthew Whittle, relationship director at NatWest, said the bank was pleased to support Rural Asset Finance’s ambitions.
“The provision of the Guarantee alongside the Sustainability Linked features will help unlock capital, reduce costs and ultimately increase access to competitive funding for agricultural and rural businesses across the UK,” he said.
Will Haynes, investment manager at BCI Capital, described Rural Asset Finance as playing “a crucial role in enabling growth and resilience” in rural communities. “This facility – backed by the British Business Bank’s ENABLE Guarantee – will further strengthen their ability to support farmers and rural entrepreneurs,” he said.
The ENABLE Guarantees programme, managed by the British Business Bank, is a key part of the government’s strategy to support access to finance for SMEs. By sharing the credit risk with commercial lenders, it encourages greater flow of funds to smaller firms that may otherwise struggle to secure borrowing.
