Young farmer expands dairy business with Oxbury loan

Staffordshire young farmer Edward Johnson has made use of an Oxbury Bank “New Gen” business loan to expand operations on his dairy farm.

Targeted at younger farmers and industry new entrants, the loan offers up to 100% funding for farming business projects and seeks to break down barriers to obtaining finance.

Edward, 25, has a unique arrangement with a farmer, whereby he rents the farm’s 570 cattle over a fixed 10-year agreement, with any cows that he adds to the herd during that time belonging to himself.

“We are milking just over 600 cows and I have some of my own already, but there’s no real room for further expansion,” he explains.

“With the help of Oxbury New Gen I am putting up a new dry cow facility, which will have enough capacity for 80 pre-calved cows from three weeks up to calving, with room for further expansion.”

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The 55m x 12m (180ft x 40ft) unit will mean Edward can add more cows to the herd that he is largely renting, as he plans to increase his herd numbers to 700.  He has budgeted for a 17% return on investment, which he hopes to start seeing in a couple of years.

“I’m only 25, and in 10 years’ time when the loan is paid off I will have all that investment and an asset.”

Advice on applying

While New Gen loans have been used for a variety of businesses, including the purchase of grazing land, additional breeding ewes, and purchasing farm tenancies, Oxbury Bank product development executive Sioned Davies says that for best chances of success, applicants should be as organised as possible before applying.  

“Applicants can help speed up the loan application process if they put some essential things in place before they apply,” she says.

“Documents such as your business plan, a cashflow forecast, a business bank account and a statement of personal assets and liabilities, income and expenditure, are just some of the things you should have before you approach a loan application.”

Among other provisions, Sioned adds that applicants will need to be VAT registered and have up to date licences.