Short answer: It depends — here’s what to expect

Most agricultural finance decisions are risk-based. Lenders consider your company’s trading history, cashflow, existing charges, the value and type of assets being financed, and the loan amount. Smaller asset finance deals (e.g., for machinery) commonly use the item financed as security and may not require unlimited director guarantees. Larger loans, development or land-secured facilities often involve registered charges and may ask directors to provide personal guarantees — sometimes limited, sometimes joint & several. To see likely requirements for your situation, try a Free Eligibility Check.

Why lenders ask for guarantees and security on farm loans

Lenders manage risk. Agriculture has seasonal income, price volatility (e.g., commodity prices, milk), and capital-intensive assets (land, machinery, livestock). That combination makes lenders want either tangible security or a personal backstop so they have a route to recover funds if the business defaults.

Key factors lenders weigh:

• Trading history and profitability of the company
• Cashflow predictability and seasonal patterns
• Value, liquidity and resaleability of assets (machinery vs. specialised buildings)
• Existing charges registered on the business (mortgages, debentures)
• Loan purpose and size — larger or longer-term projects carry higher scrutiny

Common agriculture finance types include: asset finance, term loans, development finance, working capital, seasonal overdrafts, invoice or crop-finance, and commercial mortgages for land or buildings. Each type carries different security expectations.

Get Quote Now to find lenders whose products and security expectations best match your plans.

What’s a director guarantee (personal guarantee)?

A director’s personal guarantee is a legal promise by one or more company directors to be personally responsible for the company’s debt if the company cannot meet its obligations. Guarantees can be:

• Limited — capped at a set amount or fixed time period.
• Unlimited — the director can be liable for the full outstanding debt and costs.
• Joint & several — each guarantor can be pursued for the full debt.

Personal guarantees may affect directors’ credit and personal assets. Always read the guarantee wording carefully and seek independent legal advice before signing.

Types of security lenders may seek for farm loans

Lenders choose security based on the asset’s value and ease of enforcement. Typical security forms for agricultural borrowing include:

• Fixed charge over land — a mortgage registered against the title of the farmland or property.
• Floating charge — covers changing business assets (stock, receivables) until crystallisation.
• Chattel mortgage / hire purchase — lender owns machinery until it is paid for; common for tractors and equipment.
• Debenture — broad security covering several company assets; usually registered at Companies House.
• Livestock/stock liens — specific charges over animals or harvested crops, sometimes with third-party valuations.
• Personal property and registration — lenders will register charges at Companies House so the security is visible to others.

Valuations, asset inspections and formal registrations are normal. Registration ensures the lender’s position is enforceable and protects them from other unregistered creditors.

When lenders commonly ask for director guarantees

Director guarantees are more likely in these situations:

• New or small incorporated farm businesses with limited trading history and few assets.
• High loan-to-value (LTV) requests — the less equity you contribute, the higher the chance of a PG.
• Unsecured lending or working capital lines where there’s no obvious asset to take as security.
• Land purchases, farm conversions or development finance with larger sums and longer terms.
• When existing charges already restrict the lender’s recovery options.

Example (anonymised): For a £200,000 land-improvement and drainage project, a lender asked for a capped director guarantee plus a second-ranking charge on the farmhouse. For a £60,000 tractor financed on hire-purchase, the lender took the tractor as sole security with no unlimited director guarantee.

Can you avoid director guarantees or reduce personal exposure?

Yes — there are practical steps to reduce or avoid personal guarantees in many cases:

• Increase your deposit / lower the LTV so the lender has more equity buffer.
• Choose true asset-backed finance (chattel mortgage or hire purchase) where the asset is the sole security.
• Offer alternative business collateral (freehold buildings, grain stores) instead of personal guarantees.
• Negotiate limited guarantees — capped amounts, time limits, or guarantees that lapse once specific conditions are met.
• Improve trading accounts, cashflow forecasts and provide more historic accounts to reassure lenders.
• Work with specialist farm lenders or brokers who understand agricultural cashflow and may offer tailored terms.

If avoiding a PG is important, tell us in the enquiry so we prioritise lenders and brokers who can consider limited or no-personal-guarantee options. Free Eligibility Check.

How UK Business Loans helps — what to expect from our matching service

UK Business Loans does not lend. We introduce your business to lenders and brokers that specialise in business and farm finance, helping you save time and compare relevant offers. Our process is designed for speed and relevance:

1. Complete the short enquiry (takes around 2 minutes) via our secure form.
2. We match your business to lenders and brokers with suitable products and sector knowledge.
3. Lenders/brokers review your information and contact you directly with quotes and terms — often within hours.
4. You compare options and decide — there’s no obligation to proceed.

We highlight likely guarantee and security requirements early where possible and try to match you to partners who understand farming seasonality and asset types. Read more about our agriculture services on our agriculture business loans page: agriculture business loans.

Case study (anonymised): A family dairy needed £120,000 for a new parlour. With ten years’ accounts the broker we introduced secured asset-backed finance using the equipment as sole security — no unlimited director guarantee. Client had quotes within 48 hours and accepted the best offer.

Get Started — Free Eligibility Check

Quick checklist — documents & information lenders typically want

• Company accounts (preferably three years where available) and management accounts
• Cashflow forecasts showing seasonality and loan repayments
• List of assets to be used as security with recent valuations or sale receipts
• Land registry title deeds or mortgage statements if property is involved
• Details of any existing charges registered at Companies House
• Director/beneficial owner ID and proof of address (for AML checks)
• Loan purpose, amount required (we assist from around £10,000 upwards) and preferred term

Having these ready speeds up decision-making and can reduce the need for extra security or stronger guarantees.

Frequently asked questions

Important information & regulatory notes

UK Business Loans is an introducer that connects businesses with lenders and brokers. We do not lend or provide regulated financial advice. Any lender or broker you speak to will explain their own terms, eligibility checks, and whether director guarantees or registered charges are required. Seek independent legal and tax advice if you are asked to sign a personal guarantee or grant security over personal property.

Ready to check your options?

Find out quickly which lenders or brokers are likely to offer farm finance with the security and guarantee terms you can accept. Our short enquiry takes about two minutes and is free and no-obligation. We only share your details with relevant lenders and brokers who can help.

Free Eligibility Check — Get Quote Now