Farming working capital loans: Can you use them to pay for seed, feed, fertiliser, fuel and VAT?

Short answer: Yes — in many farming situations a working capital loan can be used to buy essential inputs such as seed, feed and fertiliser, to top up fuel and energy costs, and to smooth VAT liabilities. What matters is the type of finance, the lender’s product terms and the supporting information you provide. UK Business Loans doesn’t lend money; we match farms with specialist lenders and brokers who can provide tailored quotes. Get Quote Now — Free Eligibility Check

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Table of Contents

• Intro / Quick answer
• What is a farming working capital loan?
• Which farm inputs are commonly covered?
• How lenders and brokers assess applications
• Typical finance products that can cover inputs
• VAT-specific considerations
• Eligibility checklist — what to have ready
• How UK Business Loans helps — matching & next steps
• Frequently asked questions
• Next steps & call to action

Intro / Quick answer

Short answer: Yes — working capital loans are commonly used by farms to fund seasonal inputs and to manage short-term cashflow, including VAT bills. Lenders vary in what they will fund: many will accept spend on seed, feed, fertiliser, fuel and other operating costs, while some products are designed specifically to smooth VAT and seasonal expense peaks. What changes the outcome is the loan/product type, your business financials, and any security or guarantees the lender requires.

UK Business Loans acts as a fast introducer — we do not lend. If you want quick, no-obligation quotes, Get Quote Now — Free Eligibility Check. The enquiry is just information to help us match you (it is not an application).

What is a farming working capital loan?

Working capital finance helps meet short-term cashflow needs — the money to pay for everyday business costs so your farm can operate smoothly through seasonal peaks and troughs. For farmers this commonly covers:

• Purchase of inputs (seed, fertiliser, feed)
• Fuel and energy costs for machinery and transport
• Wage and contractor payments during busy periods
• VAT or tax bills that fall due before expected receipts

Working capital facilities can be unsecured (term loans), secured (against property, plant or crops), or specialised agricultural products like crop finance. Facilities may be short term (weeks to months) or longer (12–36 months) depending on needs and lender terms.

Which farm inputs are commonly covered?

Seed, feed and fertiliser

Most lenders who provide working capital for agriculture will permit funds to be used for stock and consumables such as seed, feed and fertiliser. Suppliers’ invoices or purchase contracts that show intended use are helpful evidence for underwriters.

Fuel and energy

Fuel lines, credit facilities or simple working capital loans can cover diesel, petrol and on-farm energy bills. Some lenders also work with fuel card providers or supplier finance options to control cost and improve traceability.

VAT and tax liabilities

Many lenders accept that VAT payments are legitimate short-term business costs. There are also finance products specifically aimed at VAT smoothing (short-term loans timed to match VAT liabilities). Always check terms: some lenders treat VAT funding like any other working capital draw while others offer bespoke VAT facilities.

Remember: lender policy varies — always confirm permitted uses when you get quotes.

How lenders and brokers assess applications

Here’s what typically matters when applying for working capital to cover inputs and VAT:

• Business trading track record: length of time trading and seasonal trading patterns.
• Turnover and margins: annual turnover, gross margin, and recent sales performance.
• Cashflow and forecasts: current bank statements, VAT returns and a short forecast showing why finance is needed and how it will be repaid.
• Security: whether the business can offer security (land, buildings, machinery) or personal guarantees.
• Supplier evidence: invoices, supply contracts or quotes showing the cost of inputs.
• Credit profile: company and director credit history — some specialist lenders will accept imperfect credit if other strengths exist.

Typical document requests: management accounts, business bank statements (3–6 months), VAT returns, a short cashflow plan and supplier invoices. Once you submit an enquiry you can expect initial contact from matched brokers/lenders within hours to a couple of days depending on availability.

Typical finance products that can cover inputs

Different products suit different needs — here’s a quick guide:

• Short-term business loans (term loans): Fixed-sum loans repaid over a set period. Fast to arrange for straightforward cases; suitable for one-off input purchases or VAT bills. Good for sums from £10,000 upwards.
• Overdrafts: Flexible for fluctuating seasonal needs; cost varies and banks may require a track record.
• Invoice finance: If you sell goods on invoice (e.g. to merchants), invoice discounting or factoring can free up cash linked directly to your sales ledger.
• Asset and equipment finance: For buying tractors or machinery — frees cash for inputs instead of tying up capital.
• Crop or supplier finance: Financing arranged via input suppliers (seed/feed companies) or crop financiers; sometimes tied to crop contracts.
• VAT smoothing loans: Short-term facilities specifically timed to cover VAT liabilities between payment dates.

Pros and cons — term loans are predictable but may cost more than overdrafts for short spells; invoice finance turns unpaid invoices into cash but requires a suitable debtor book; supplier finance can be cheap but ties you to particular suppliers.

VAT-specific considerations

VAT timing can create cashflow gaps — you may need to pay HMRC before seasonal receipts arrive. Lenders commonly accept VAT as an allowable use of funds; some even market products for VAT smoothing. Key points:

• Check your VAT return schedule (quarterly or monthly) and confirm the exact liability amount.
• Talk to your accountant: there may be VAT accounting schemes (e.g. Annual Accounting, Cash Accounting) that change timing and reduce pressure.
• When approaching lenders, disclose VAT liabilities and show how the loan will be repaid from forthcoming sales or crop receipts.
• We are not tax advisors — speak to your accountant for tax treatment and planning.

For official guidance on VAT obligations and timings, see GOV.UK’s VAT pages: https://www.gov.uk/vat-registration.

Eligibility checklist — what to have ready

To speed up matching and improve chances of a favourable offer, prepare:

• Company details and registration (if applicable).
• Recent management accounts or year-end accounts.
• 3–6 months business bank statements.
• VAT returns and the amount/timing of the VAT bill you need to cover.
• Supplier invoices, quotes or contracts for the inputs you plan to buy.
• Simple cashflow forecast showing how the loan will be repaid.

When you’re ready, start a short enquiry: Get Quote — Free Eligibility Check.

How UK Business Loans helps — matching & next steps

We’re an introducer: we don’t lend. Our role is to match your farm with specialist lenders and brokers who understand agricultural cashflow and seasonal cycles. The process is simple:

1. Complete a short enquiry with the amount required (from around £10,000 upwards) and the purpose (seed, feed, VAT, fuel etc).
2. We match you to lenders/brokers that specialise in agricultural finance.
3. You receive no-obligation quotes and can compare terms, speed and repayment options.
4. Choose the lender you prefer and proceed with a formal application through them.

Enquiries are quick and confidential, and submitting one is not an application — it simply helps us match you to the right partner. Start your free eligibility check.

For detailed sector guidance from our resources and to see services aimed at farms, visit our farming loans overview: farming loans.

Frequently asked questions

Can I use a working capital loan specifically to pay my VAT bill?

Yes — many lenders will lend to cover VAT liabilities. Make this clear when you request quotes and provide VAT return evidence and a repayment plan. Consult your accountant on VAT accounting options too.

Will applying through UK Business Loans affect my credit score?

No. Submitting an initial enquiry to UK Business Loans does not affect your credit score. Individual lenders may carry out credit checks later if you progress an application, and they will tell you when that will occur.

How quickly can I receive funds?

Timescales vary. Some specialist agricultural lenders and brokers can offer funds within days for straightforward cases; others may take 1–3 weeks depending on security, due diligence and documentation.

What if I have a poor credit record?

Some specialist lenders work with businesses that have imperfect credit histories, particularly if the business has strong turnover, assets or supplier contracts. Be open about past issues — matched brokers can identify options.

Do lenders require invoices for input purchases?

Often yes — supplier invoices or contracts showing the cost of seed, feed or fertiliser make an application stronger and help underwriters assess the purpose of the loan.

Next steps — get a free eligibility check

If you need working capital for seed, feed, fertiliser, fuel or VAT, we can match you quickly to lenders and brokers who specialise in farming finance. It takes a couple of minutes to complete our short enquiry and it’s not an application — it’s how we find the right lending partners for your needs.

Get Quote Now — Free Eligibility Check

Trust & important notes

UK Business Loans introduces businesses to lenders and brokers; we do not provide loans or regulated financial or tax advice. The information on this page is for guidance only — speak to your accountant or adviser about tax or VAT treatment and to lenders about eligibility and terms. Minimum typical facility sizes start from around £10,000.

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Last updated: [Insert date]. By UK Business Loans — Farming Finance Team.

1. Can a farming working capital loan be used to buy seed, feed and fertiliser?
Yes — many farming working capital loans and crop or supplier finance products explicitly allow funds to be used for seed, feed and fertiliser, subject to lender terms and supporting invoices.

2. Can I use a working capital loan to pay my VAT bill?
Yes — lenders commonly permit working capital to smooth VAT liabilities and some offer specific VAT-smoothing facilities when you disclose the liability and supply VAT return evidence.

3. What types of finance cover seasonal farming costs like fuel and labour?
Short-term business loans, overdrafts, crop finance, invoice finance and supplier finance are typical products used to cover seasonal fuel, energy and labour costs on farms.

4. How quickly can I get funds for farm inputs through UK Business Loans?
Timescales vary by lender and documentation but specialist agricultural lenders and brokers matched via UK Business Loans can sometimes provide funds within days or typically within 1–3 weeks for straightforward cases.

5. Will submitting an enquiry with UK Business Loans affect my credit score?
No — submitting a free eligibility check with UK Business Loans does not affect your credit score, though individual lenders may perform credit checks later if you progress an application.

6. What documents should I have ready to apply for farming working capital?
Prepare recent management or year-end accounts, 3–6 months of business bank statements, VAT returns, supplier invoices or quotes and a short cashflow forecast showing repayment plans.

7. What loan amounts are available for farm working capital?
Typical facility sizes matched via UK Business Loans start from around £10,000 and can scale much higher depending on your lender and financing needs.

8. Can farms with imperfect credit still get working capital?
Yes — some specialist agricultural lenders and brokers accept imperfect credit when the business shows strong turnover, assets, contracts or clear seasonal cashflow plans.

9. Will lenders require security or guarantees for farming working capital?
Some lenders may require security (land, buildings, machinery) or personal guarantees for larger or secured facilities, while unsecured term loans and overdrafts may be available for qualifying farms.

10. Is the UK Business Loans enquiry an application to a lender?
No — the short enquiry is a free, confidential matching tool (not a loan application) that helps UK Business Loans connect your farm with suitable lenders and brokers.