The Client
Our client is a third-generation farm owner running a 370-acre mixed arable and livestock business alongside his mother. The farm produces grain that is sold to established buyers, while high-quality malt barley goes directly to market. In addition, beef cattle are reared and sold seasonally to major processors, contributing to the farm’s steady annual turnover.
An existing customer of White Oak UK, our client has often sought our services to keep everything running smoothly with the purchases of livestock, fertiliser and steel farm buildings, among other essentials. His most recent proposal was something quite different!
Keen to future-proof the family business, the client has been developing a diversification project with the potential of offering an alternative income stream for the farm. With an archaeological site on the land that includes a 4,000-year-old chapel, there is strong potential to attract visitors and create additional revenue. The idea: build and rent out holiday lodges that combine farm stays with unique heritage experiences.
The Challenge
Running a farm requires constant balancing of seasonal challenges, fluctuating crop yields, and changing input costs. Despite a profitable 2022, the following year saw losses due to poor yields, weak market prices, and increased overheads. While the farm remained solvent and had significant assets in land, property, and livestock, cash flow had become tight.
The client had already invested heavily in the farm’s future, including constructing a new barn to house calves through the winter and purchasing livestock at a competitive price. These investments were already paying off, with cattle values doubling expectations and delivering strong returns.
However, to kick-start the diversification project, the client required £20,000 to purchase the first wooden lodge. This investment would provide the foundation for a new income stream, with plans to expand by adding further lodges in the coming years.
The challenge was to secure funding that would cover the upfront costs while keeping repayments affordable and aligned with the farm’s projected cash flow.
How we helped
We worked closely with the client to understand his plans, projections, and financial standing. The farm’s bank statements showed accounts well-managed within the existing overdraft facility, with no history of missed payments. This, coupled with a stellar track record with White Oak UK, gave us confidence that the business was in a strong position to manage additional finance.
The diversification project itself had been in the making for three years. Reluctant to take any unnecessary risks, our client had researched the market, engaged with local architects and archaeologists interested in the historic site, and forecasted realistic income potential. During the peak holiday season, the lodge is expected to generate between £750 and £1,500 per week, equating to £30,000–£40,000 in additional revenue over the year. Not only would this comfortably cover repayments, but it would also increase the farm’s overall turnover and profitability.
Based on this, we arranged a £20,000 loan over 36 months to fund the purchase of the first lodge. This financing solution gave the client the ability to move forward with the project without putting undue strain on the farm’s working capital.
With the loan secured, the first holiday lodge is now set to open, offering visitors the chance to stay on a working farm while exploring the unique archaeological site. The diversification project provides the business with a sustainable new income stream, balancing out the volatility of agricultural markets and ensuring greater long-term stability.
Looking ahead, the client intends to reinvest the income from the first lodge into further expansion, gradually building a portfolio of accommodation that complements the existing farm operation. By carefully combining traditional farming with new tourism opportunities, the business is well-positioned to thrive for generations to come.
Support for Business Growth – Unlock New Opportunities with a Business Development Loan
Diversification projects like this require significant upfront investment, but the long-term rewards can be transformative. By providing manageable funding, we helped our client take a major step toward building a more resilient and profitable farm business – and he’s not the only example of a White Oak UK success story!
Whether you’ve spent months crafting a bespoke business plan based on an idea or you’re simply looking to expand your existing operations, our business development loans can help transform your vision into a reality. Our key borrowing terms range from £25k to £2m with up to a 48-month repayment period. While we evaluate each client on a case-by-case basis, the key eligibility criteria for a business development loan include:
- Trading for 3 years or longer
- Track record of profitability
- You’ll use the funds for growth
Stop pressing pause on your potential and unlock exciting new opportunities. Call one of our friendly experts today on 0333 014 9000 and secure your business development loan.
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