Rural Asset Finance secures £120m for small farms

The agreement, jointly provided by NatWest Bank and BCI Capital, is supported by the British Business Bank’s ENABLE Guarantees programme, which helps reduce capital requirements for lenders, making it easier to offer credit to small businesses.

A key feature of the deal is its alignment with RAF’s sustainability goals. It includes a margin adjustment linked to environmental performance, offering financial incentives for farms adopting renewable energy systems and sustainable farming practices.

“This transaction with Rural Asset Finance builds on the work we have done through the ENABLE Guarantees programme to support the provision of funding to businesses in the agricultural sector,” said a British Business Bank spokesperson.

“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.”

Founded in 2019, RAF specialises in direct, flexible lending to agricultural businesses. Its products support equipment purchases, farm expansion and new revenue streams - such as agri-tourism or renewable energy - tailored to the needs of smaller rural enterprises.

Matthew Smart, managing director of RAF, said the new facility strengthens their ability to help farmers navigate a changing economic landscape.

“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,” he said. “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.”