Through bad times and good times, there’s one thing you can be sure of – the UK still loves a glass of wine.
Despite significant drops in production and consumption in the first year of the pandemic, UK wine sales are now forecast to grow by more than 11% per year in 2023-25. However, even as sales rise, costs are rising too, leaving many UK wine growers struggling to modernise their facilities, expand their area under vines, and pay ballooning overhead. Fortunately, this is where vineyard finance can come to the rescue: From commercial mortgages to startup loans and working capital finance, vineyard loans are available to solve every grower’s need.
Don’t let financial issues sour your winemaking ambitions. Read on to find the best loan for your vineyard.
No matter if you’re seeking to expand production, pay taxes, start a vineyard, or buy property, there’s a vineyard loan for you.
Wine growing is a land intensive business, but in the UK, even agricultural land can be expensive. This means wine growers who wish to buy an existing vineyard or buy raw land to plant new vines will typically need finance for the transaction. Unlike residential home loans, where one size often fits all, commercial mortgages are tailored to the unique demands and business of the borrower. Borrow up to 90% of the LTV (loan to value – a comparison of the size of the loan against the value of the property) and repay over 1 – 30 years. The property acts as security for the mortgage. In most cases, there is no need to provide extra collateral.
Development and bridging loans can make dreams to grow your vineyard become a reality. Refurbish, extend, expand your current production facilities. Borrow up to 90% of the project cost. Repay over 1 – 30 years. The property acts as security. In most cases there is no need to provide extra collateral.
The UK has seen explosive growth in the number of vineyards over the past eight years. Despite the pandemic, UK vineyards now cover more than double the area they did in 2014, and domestic sales of wine have grown by 69% since 2019 – statistics that are enticing more entrepreneurs to try their hand at viniculture. Budding wine growers seeking to launch their own vineyard or winery may get a financial boost with a startup loan – hard-to-find seed cash to get a new business off the ground. Government funds may also be available for this type of loan.
Making fine wine doesn’t come cheap. Vineyard and winery equipment can be expensive and to keep on top of expanding consumer tastes, wine growers must continually modernise to stay ahead of the competition. Asset finance can take the sting out of buying big-ticket plant and machinery. Buy over time and use the equipment as you pay for the equipment. The asset acts as security for the loan. In many cases, there is no need to provide extra collateral.
The hospitality trade can be very seasonal – with sales of wine rising and falling throughout the year as events like Christmas turbo-charge consumption. Unfortunately, erratic sales can cause cashflow headaches for wine growers and wineries, as customers reduce orders, but overhead costs remain the same. Working capital loans can be used to cover everyday expenses – wages, utility bills, the cost of raw materials and more. Depending on the type of loan you choose, added security may be required.
Working capital loans for vineyards:
Buying into a successful winery franchise can be a good idea – you become part of a well-known brand, enjoy centralised marketing support, and have easy access to products and equipment. However, joining a major winery franchise group can be costly, and few franchisors offer funding to soften the financial blow. An independent franchise loan can solve this problem. Borrow anywhere from £1,000 to £5million. Repay over months or years. Additional security may be required.
Slow paying customers can leaver wine growers battling to pay their VAT bill, making them vulnerable to penalties and interest. VAT loans can be used to pay HMRC on time, avoiding penalties and allowing vineyards to hold on to their available cash for longer. The lender pays HMRC direct. Repay the loan over 3,6, 9, or 12 months.
Vineyard financing is a niche funding area, with differing rules of application. Wine growers seeking this type of finance may find themselves forever searching and making applications to lender after lender. The delays this can create could cause you to lose business and leave your vineyard vulnerable to the competition. Instead, working with a broker, who can access vineyard loans and mortgages from a wide range of lenders is a better way to go. No more cold calls and endless demands for information. Even if you’ve been turned down elsewhere or have bad credit, simply tell us what you need and leave the rest to us.
Vineyards are specialist commercial operations, with features unlike any other type of business. If you are seeking funds to buy land, an existing vineyard, or to launch a winery, the lender will need full details of the property, crop output, customer agreements, and a detailed business plan. Past experience in viniculture, or the manufacture and sale of other alcoholic beverages is useful, although not mandatory. Additional to these core requirements, and for other types of vineyard loan, most lenders will seek the following information:
Top Tip: Some lenders may ask for a personal guarantee by the business owners or directors to secure the loan. If they do, they will check their personal credit scores. Don’t get caught out by an error on your credit report, always check your business and personal credit scores before you apply.
Give your vineyard the funds it needs to thrive. Register with Swoop to find the best rates, the best terms and the best vineyard loans and mortgages.
Swoop was amazing! I was looking for refinancing and they were straight onto finding me the best possible option. I would highly recommend them.
Owner, F45 Cambridge
We work with world class partners to help us support businesses with finance