Posted 11 March 2012
By Harper Adams Forum Reporter, Rosa Malseed
This week’s Harper Adams Forum welcomed Mark Williams, Agricultural Business Manager for Lloyds TSB.
Mr Williams started as a Commercial Manager and has now moved into the agricultural sector, which he thoroughly enjoys, without a background in agriculture.
He explained how Lloyds prefers to lend to the agricultural sector as it tends to have a good return and for this reason, money is lent on a lower APR (annual percentage rate) than the commercial sector. More so, being mostly generational, the businesses are always looking for new ideas to keep successful and are seen likely to last.
Mr Williams explained why Lloyds should be considered for the agricultural sector:
• Overdraft – It is not a concern for Lloyds if clients have large overdrafts as they know that there are peaks and troughs in the yearly income.
• Loans – Usually for capital expenditure at a fixed or base rate. Lloyds prefers to be less about being competitive in the market, and more about sustainability. They only offer ‘interest-only’ to encourage capital repayments.
• Asset Finance (HP) – Not very popular as not 0%, so doesn’t use up traditional security.
Lloyds TSB considers all deals using their existing customer network and bank account operation. Affordability, security and degradations are assessed.
Mr Williams advised the Forum that if ever dealing with banks, always keep in contact frequently to give the bank the opportunity to provide the customer with the best deals. Plan ahead and act on the cautious side to evaluate every possible problem. Chase debtors and plan payments to utilise the overdraft facility, and keep in contact with the Bank Manager as planning is always preferred to leaving it too late.
Customer capability is looked at for each proposal, therefore experience and research are key, and professional help is always advised. Business plans are not always asked for but can be valuable if investing in a new enterprise. At Lloyds, when looking at accounts, deprecation and personal drawings are always added back in; outside incomes, planned sales and future capital repayment are accounted for. Finally the ‘what-ifs’ of the proposal are assessed according to rate movements and market volatility.
Next week Ian Harltey and Malcolm Corbett are attending from British Wool to discuss future of the industry and career opportunities.