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NFU Deputy President Stuart Roberts writes:

Yesterday (28 April) the NFU convened its second COVID-19 Banking Roundtable meeting since lockdown came into effect. This virtual roundtable was attended by the key agricultural lenders as well as NFU staff in order to discuss the impacts on the ground, the banking sector's role in supporting farm businesses and the roll out of the historically significant business support measures announced by the government.

If there was one take away message from the meeting it is that the banks are open for business and keen to support in managing the financial disruption faced by our critically important farm businesses. This doesn’t mean they themselves aren’t facing significant challenges as the effects of COVID-19 leave no corner of our economy untouched.

The banking sector has faced significant disruption to normal lending processes, with staff being off sick, a shift to home working, the requirement to deliver a new unfamiliar Coronavirus Business Interruption Loan Scheme (CBILS) and an unprecedented volume of enquiries flooding through to stretch an already tested process. In recent weeks this has led to the much-publicised backlog in lending applications but we are seeing green shoots emerging as banks adapt and the volume of lending is ramped up week on week.

Feedback from the banks suggests that while they are seeing significant fallout across the economy, in sectors such as construction, retail and hospitality, the farming sector is proving resilient during this period. For a majority of non-diversified farming businesses which have needed help to date, capital repayment holidays and, to a lesser extent, overdraft facilities are proving to be the most effective interventions being adopted to support cash flow rather than extensive take-up of the CBILS offer.

However, the banks have a central role to play in the delivery of CBILS and the scheme itself has gone through numerous reforms in the previous month to make it fit for purpose. I’m encouraged to see the Treasury has consistently taken on NFU feedback on how the scheme could be improved to remove key blockers for those in our sector. This includes featuring agriculture in the scheme, removing ineligibility for those offered a commercial loan as well as the promising Bounce Back Loan offer announced on Monday.

Since late March when the impacts of COVID-19 became more apparent, we have worked closely with the banks, engaging on almost a daily basis to understand the challenges they face in delivering finance, the steps they are taking to adapt and how our sector could be best supported during this period. This engagement has proved invaluable for discussing the issues our members face as well as for shaping our discussions with other business representative groups and government. The spirit of collaboration, the ‘we’re all in this together’ approach to discussions has led to an openness which has helped us all to respond quicker and in a more informed manner to the challenges as they unfold.

This said, there remain significant challenges as farmers and growers continue to feel the financial impact of disrupted markets. Lending is beginning to flow but there remain backlogs and government support isn’t reaching those in need fast enough. On this, we continue to work with government and the banks to understand how we can speed up support for the businesses that need it now.

The reality is that in such unprecedented times government schemes, lending processes and market dynamics are evolving fast on a weekly basis. With this in mind, I would encourage all to maintain regular contact with their finance provider to discuss the options that are right for their business. A conversation from two weeks ago may look very different today so maintaining contact is essential.

Where problems in accessing finance persist, we are keen to continue hearing from our members on the issues on the ground so that we can maintain this open dialogue and continue to tackle this challenge together.