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We understand that a farm's finances don't stop with the farm business current account. So we can also look after the personal financial well-being of all those linked to the farm business.
Your local Bank of Scotland and Lloyds Banking Group agriculture manager will be able to refer you to a whole range of products from Bank of Scotland and Lloyds Banking Group selected companies, including pensions and insurance. It's this expertise in Agricultural Finance, a close working relationship with colleagues from other financial disciplines across the group and a deep understanding of each customer's farm business, that allows us to offer one of the best agricultural banking services in the UK.
Giving you an efficient business account that lets you make and receive payments is the core of what we do. We have a whole range of deposit and savings accounts, and we'll make sure you get the one that's most suited to your rural business. Even our tariffs can be tailored, so you can manage your money your way.
We’re fully aware that a farmer's day is never nine-to-five, so our banking isn’t either. We make sure you can always access your account when it suits. If you can’t visit your local branch or call your agricultural team you have the option of using our round the clock automated telephone banking service or managing your accounts online using Business Internet Banking 24 hours a day.*
A farmer's family life is, more often than not, totally linked to the farm business. The family home is often integral to the business. Family members play an active role in the farm. Even the question of inheritance can be a difficult and complicated decision.
This is where our dedicated agricultural banking manager can help. They fully understand the pressures and complexities that come with running a farm business. It's what makes them the perfect people to direct our specialists, providing a highly effective financial service for the farmer, the farming family and the farm business alike.
Helping our customers build profitable and sustainable businesses requires robust and appropriate risk management strategies. So our managers are experienced in being able to assess the farm business and the risks associated with it.
We understand that different farmers have different attitudes to risk. That's why our risk strategies can be tailor made to suit.
Not only that. As risks differ, our solutions do too. Some risks, like foreign exchange fluctuations affecting grain prices, require a business-based response. Other risks, like succession planning, may need a protection solution. So whatever the risks faced by your farm business, and whatever your attitude to those risks, we're here to help.
We offer all kinds of options on traditional loans for farmers looking to expand or modernise. We also provide finance for diversification projects.
With these tools to hand, our experienced managers will work closely with customers to plan for the future. By keeping in mind cost effectiveness, risk management and business flexibility, they will propose a financial structure that works best.
Anne Gillan, Bank of Scotland Director Mid & SME Financial Markets, responds to the questions and misconceptions we hear the most from farmers about this important tool for managing risk.
More farmers are realising the advantages of "hedging" their Single Farm Payment (SFP) as a sort of insurance against the possibility of a poor exchange rate. At the time of writing, the date on which the rate is set is the 30th September 2014.
"I elect to receive my SFP in Sterling so there's no risk, is there?"
Regardless of whether you elect to receive your SFP in Sterling or Euros, your SFP starts out as a quantity of Euros. Requesting it to be paid in Sterling just means that it is exchanged automatically using the 30 September rate. So whether the exchange takes place by default on 30 September (giving you Sterling) or you receive the SFP in Euros and exchange it into Sterling yourself, the underlying exchange rate risk is still there.
"I elected to receive my SFP in Sterling. Does that mean I cannot hedge my payment?"
Not at all. We have helped a number of farmers with Sterling SFPs to secure the value of their payments. We can provide hedging solutions for those who elect to receive their SFP in Sterling and for those who elect to receive Euros.
"There's enough uncertainty in farming, I'd rather not begin speculating on the value of my SFP!"
We're not suggesting you speculate on the value of your SFP, quite the opposite. Hedging your SFP locks it in so you have a known value. If the exchange rate you choose is acceptable to you (so that the Sterling value of your SFP allows you to cover your costs and make a profit), then you have eliminated the risk that a poor exchange rate on 30 September would give you a Sterling value which is not acceptable to you, i.e. you make a loss. Hedging SFP aims to reduce risk, not increase it.
"I'm waiting for the exchange rate to move higher before I hedge."
This again, is a form of speculation. A higher EUR/GBP may give you a larger return on your SFP, but what if it doesn't reach that rate? What if you turn down the opportunity to hedge at current levels which would still have been an acceptable amount for your business? What if your SFP subsequently exchanges at a rate well below your ideal rate (and below the point at which your farm breaks even)?
"It's complicated to set up and I really don't understand where to start."
Our colleagues in the Financial Markets team will do the setting up for you, but you'll need to be clear on what your minimum exchange rate needs to be, i.e. what Sterling value you need to receive from your SFP. If you know this we can help structure a product that meets your needs.
"Might I regret things when it comes to 30 September?"
Hedging your SFP is not about trying for the best rate, it is about securing an appropriate rate. If you hedge, you may find that doing nothing could have delivered a better exchange rate for your SFP, but of course you would have been exposed to a risk of a lower exchange rate. It's your attitude to risk in your business that will determine whether hedging is right for you. Don't forget, you don't need to hedge all of your SFP; many farmers hedge only part of it.
If you would like to find out more about hedging your Single Farm Payment, talk to your local Bank of Scotland Agriculture manager.
Just get in touch. It’s that easy. In fact, you can find the contact details for your local manager here.
*Occasionally we may need to carry out essential maintenance to our Online Banking services, resulting in some interruption to the service.
0345 300 0268
0345 606 0286
We have a dedicated team of Agriculture specialists based across Scotland.
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