Leasing and hire purchase in Scottish agriculture
showed marked popularity in 2009, as bank borrowing became less

Such financing represented part of £930m
(€1.13bn), including family loans and other types of finance, or
40% of all liabilities in Scottish agriculture. The other 60% came
from bank borrowing.

Lessors have put the reason for this popularity
down to banks’ liquidity problems as a result of the economic
crisis, meaning increases in arrangement fees and rising margins
over base, therefore making bank borrowing less attractive.

However, figures published in the 2010 Economic
Report on Scottish Agriculture also showed that the level of bank
advances made to the Scottish farming sector saw its largest annual
increase in a decade. Bank advances reached £1.5bn at the end of
May this year, £121m higher than 2009.

The greater proportion of bank advances was made
to owner-occupier farmers, reflecting the fact that 74% of
Scotland’s farmland is owner occupied.

The figures were published by the Scottish
government on 12 August.