Alternative financing tools

This is the objective of a series of articles that we are going to publish : Allow each candidate to realise his or her agricultural, viticultural or equestrian project.

A scissor effect unfavourable to transmission.

For the past 30 years, land prices have been rising steadily (the price of agricultural land in 2020, the price of vineyards from 1991 to 2020). At the same time, the size of businesses has increased and with it the value of the assets of these businesses. As a result, the value of properties to be taken over in a transfer continues to rise.

At the same time, we note that the banks, faced with an increase in the level of risk, have rather tightened the criteria for granting financing. And if there are many candidates, their financial capacity is the same as it was 30 years ago: the majority of them have very little self-financing.

Finally, as far as the transfer of ownership is concerned, the baby-boom has become the papy-boom: a large number of active farmers will cease their activity in the years to come. The renewal of generations is therefore a major challenge for maintaining a strong rural fabric.

New financing solutions

Faced with this scissor effect (increase in the number of businesses to be taken over, tightening of bank financing), it is necessary to broaden the financing tools to encourage a high replacement rate.

Numerous initiatives have been launched in recent years by institutions, entrepreneurs, start-ups, etc.

Bank financing must and will remain the number one financing solution. But these new tools will allow you to diversify and balance your financing plan and to carry out your project.

An inventory of solutions

We therefore set ourselves a challenge: to present as exhaustively as possible the financing solutions available to project leaders in rural areas.

Whether you want to create a farm, take over a vineyard, develop an equestrian project, ... you will find in these articles a presentation of these new financing solutions.

We will publish these presentations on our blog and also on social networks with the aim of devoting an article to each solution.

A classification of these new tools

Finally, as these tools are very diverse, we will divide them into categories:

• Land: Several initiatives are concentrated around the land issue. The land is purchased by an organisation which then rents it to the project owner.
• Crowdfunding: calling on savings from individuals to finance your assets. Schematically, there are 3 types of financing: donation, loan, participation in the capital of the business
• Buildings: having a building financed by a third party
• Movable assets: financing equipment, livestock, stocks by new actors
• Equity: an investor provides funds to partner with the project owner. This increase in equity allows for the financing of part of the project and facilitates access to traditional bank loans.
• Additional income: develop a time-saving complementary activity to generate additional income.

See you soon for the first episode of "alternative financing tools".