Agricultural Machinery Finance UK 2026: Fund Farm Equipment Independently

Agricultural machinery finance explained

Agricultural machinery finance is asset finance applied to the purchase or refinance of farm equipment. It covers the full range of machinery used in UK farming: tractors, combine harvesters, sprayers, balers, cultivators, drills, telehandlers, slurry equipment, irrigation systems and specialist harvesting machinery. Rather than purchasing equipment outright, the farm business finances it over an agreed term and uses it immediately.

UK farming is capital-intensive. A modern combine harvester costs between £250,000 and £600,000 new. A self-propelled sprayer costs £200,000 to £400,000. A large tractor costs £100,000 to £250,000. Purchasing this equipment outright from farm income would create severe cash flow constraints, particularly given the seasonal nature of farming revenue. Agricultural machinery finance allows capital expenditure to be aligned with the farm's earning cycle.

The UK agricultural finance market is served by specialist lenders with dedicated agricultural divisions, including Close Brothers Asset Finance, as well as generalist asset finance lenders including Portman Asset Finance, Shawbrook Bank and Aldermore Bank. Manufacturer finance programmes from John Deere Financial, CNH Industrial Capital, AGCO Finance and Claas Finance are also widely used for new machinery purchases through dealer networks.

Types of agricultural machinery covered

Tractors are the most commonly financed agricultural asset. New tractors from John Deere, New Holland, Case IH, Fendt, Massey Ferguson and Claas range from £60,000 for a smaller 100hp model to over £300,000 for a large 400hp articulated tractor. Used tractors represent a significant proportion of agricultural finance transactions. See the dedicated guide: Tractor Finance UK 2026.

Combine harvesters are among the highest-value individual agricultural assets. Modern combines from Class, John Deere, New Holland and Case IH cost £300,000 to £600,000 new, with headers costing an additional £50,000 to £150,000. Many farms hire or contract combine harvesting rather than owning a machine, but larger arable businesses typically own one or more combines. Used combines are widely financed; the secondary market is well-established through specialist agricultural machinery dealers.

Self-propelled and trailed sprayers are high-value assets increasingly subject to precision agriculture technology upgrades. Self-propelled sprayers cost £200,000 to £400,000 new; trailed sprayers £30,000 to £120,000. Technology investments including GPS guidance, variable rate application systems and section control add significant value and are often included in the financed amount.

Balers, round and square, range from £20,000 to £120,000. Telehandlers are widely used across livestock and arable farming and range from £40,000 to £100,000. Slurry and manure handling equipment including lagoon covers, separator systems and umbilical systems range from £30,000 to £300,000. All are eligible for agricultural machinery finance from specialist lenders.

Finance products for farm machinery

Hire purchase is the most widely used product for agricultural machinery finance. Fixed monthly payments, capital allowances from day one and ownership transfer at term end make it the most straightforward structure for most farming businesses. Terms of 36 to 60 months are standard for tractors and combinable crop machinery; up to 84 months for high-value combines and specialist equipment with long working lives.

Finance lease suits farming businesses that want to use machinery without the intention of ownership, or where the farm is tenanted and the farmer does not want to tie capital into owned assets. Lease rentals are fully deductible as a farming expense. The farm can continue the lease on a secondary period at nominal rent or arrange the machinery's sale at term end.

Refinance and sale and leaseback are used by farming businesses that have accumulated unencumbered machinery through cash purchases or completed hire purchase agreements. A farm with £500,000 of owned tractors and implements can release £350,000 to £400,000 through sale and leaseback, using the proceeds for infrastructure, buildings, land improvements or working capital. The machinery remains in use throughout.

Seasonal payment structures are available from some specialist agricultural lenders, aligning repayments with the farm's income cycle. A cereal farm with one main harvest per year may prefer annual or bi-annual repayments rather than fixed monthly instalments. Portman Asset Finance and Close Brothers Asset Finance both offer seasonal payment options on qualifying facilities.

Agricultural machinery lenders

Close Brothers Asset Finance is the most specialist institutional lender for agricultural machinery in the UK market. The dedicated agriculture division employs underwriters with direct farming sector knowledge and finances all categories of farm machinery from £10,000 to £10,000,000. The division offers seasonal payment structures, and its sector expertise means combine harvester and sprayer valuations are more accurate than generalist lenders. Processing times are 24 to 72 hours for standard applications.

Portman Asset Finance provides fast access to agricultural machinery finance from £5,000 with same-day decisions for standard applications. The broker-lender model gives flexibility on structuring and means Portman can consider applications that fall outside standard bank criteria, including younger farming businesses and used machinery purchases at auction.

Shawbrook Bank finances agricultural plant and machinery from £25,000 as a direct bank lender. Aldermore Bank covers agricultural equipment from £5,000 with published indicative rates. Both provide the certainty of PRA-regulated bank lending.

For a full independent lender comparison with FRN numbers, loan ranges and KT Scores, see: Asset Finance UK: The Independent Guide.

Tax treatment of agricultural machinery finance

The tax treatment of agricultural machinery finance follows the standard capital allowances rules for plant and machinery, with some farming-specific provisions in HMRC's Business Income Manual at BIM55000 onwards.

Under hire purchase, the Annual Investment Allowance allows the full cost of qualifying plant and machinery to be deducted from taxable farming income in the year of purchase, up to £1,000,000 for 2026/27. For a farming business buying a £350,000 combine harvester on hire purchase, the full £350,000 is deductible from farm profits in year one, providing significant tax relief even though the cash is paid over five years.

Agricultural buildings, roads, drains and fencing are eligible for Agricultural Buildings Allowance where applicable, and for Structures and Buildings Allowance (SBA) at 3 percent per year straight-line for expenditure incurred from October 2018. Agricultural machinery does not qualify for SBA; it qualifies for the standard plant and machinery capital allowances regime.

Farming businesses with variable profits due to harvest quality and commodity price fluctuations should consider the Averaging of Farmers' Profits provisions under ITTOIA 2005 s.221 when timing large capital expenditure claims. Spreading AIA claims across years where profits are available to shelter may be more tax-efficient than claiming in a loss year. Independent tax advice is essential for large agricultural machinery purchases.

Frequently asked questions

Can I finance a combine harvester?

Yes. Combine harvesters are financed regularly by specialist agricultural lenders including Close Brothers Asset Finance and Portman Asset Finance. New combines from Claas, John Deere, New Holland and Case IH ranging from £300,000 to £600,000 are financed on hire purchase or finance lease over 48 to 84 months. Used combines with known service histories from specialist dealers are also widely financed. Close Brothers' agriculture division has particular expertise in combine valuations.

Are seasonal payment structures available for farm machinery finance?

Yes. Some specialist agricultural lenders offer seasonal payment structures that align repayments with the farm's income cycle. A cereal farm receiving most of its income at harvest time may prefer annual or bi-annual payments rather than fixed monthly instalments. Close Brothers Asset Finance and Portman Asset Finance both offer seasonal payment options on qualifying facilities. Not all lenders offer seasonal structures; it is worth asking specifically when comparing finance options.

Can I finance farm machinery purchased at agricultural auction?

Yes. Agricultural auction purchases are financed by specialist lenders including Portman Asset Finance. The lender assesses the machinery's age, condition, hours and current market value. Most agricultural auction houses require payment within 24 to 48 hours of the hammer falling, making same-day pre-approval essential for serious buyers. Portman Asset Finance can issue credit pre-approvals before the auction so only the specific lot details need to be submitted after purchase.

What is the difference between agricultural machinery finance and a farm business loan?

Agricultural machinery finance is secured against the specific piece of machinery being purchased or refinanced. A farm business loan is typically unsecured or secured against property or a personal guarantee, and provides general working capital for any farm business purpose. Machinery finance is generally available at lower rates than unsecured lending because the asset provides collateral. A farm business loan is more flexible in how the funds are used but typically carries a higher rate and requires stronger overall business credit.

Can I finance farm machinery if my farm is tenanted?

Yes. Tenanted farming businesses can access agricultural machinery finance on the same terms as owner-occupier farms. The finance is secured against the machinery, not the land, so the tenancy status does not affect eligibility. Finance lease or operating lease may be preferable for tenanted farms where the farmer wants to avoid committing to long-term asset ownership that may complicate the tenancy arrangements.