Farming: Bank backing for "sound" businesses SOUND farming businesses are still a good bet for financial support from the banks, according to the Clydesdale Bank. The bank's head of agri-business, James O'Mahoney, speaking in Edinburgh, strongly denied suggestions that even farmers with a good track record are having difficulty in securing additional funding to boost cash flow or invest in development or re-structuring and suggested farming was better placed than most other industries to secure bank support. Most farming businesses were in a position to shrug off the financial impact of this year's disastrous weather and poor harvest following a much improved financial performance over the past few years, he claimed. A recent NFU Scotland survey suggested 7 per cent of farmers had found it impossible to secure bank funding but the bank claim this is much less than other industries where 25 per cent is the norm. "There will always be exceptions and some farming businesses have clearly been seriously blown off a previously positive course this year by the extremes of the weather," said O'Mahony. One of the great advantages of many farm businesses is that their excellent financial ownership - more than 90 per cent on average - is well ahead of other industries. While a lot of people are working extremely hard in other industries to regenerate businesses across all areas of the national economy, farming and farm-based enterprises are definitely better placed than many to secure an acceptable return on their investment. Farm balance sheets in generally had remained "impressively strong" throughout the economic downturn, due to rising land and livestock values, and many farm businesses had achieved improved levels of profitability although this year was more challenging. However, the bank's policy was to lend according to the viability of the business rather than a simple loan-to-value basis. O'Mahony said the bank was working closely with farmers facing difficulties to help them rebuild their businesses and made the point that short-term solutions were easier to implement if the longer-term prospects were favourable. He said: "For farming, even for those currently dealing with a weather-damaged year, the long term continues to look good. Agriculture's track record is also a major plus point, illustrating the impressive resilience of the farming community. Interest payments on borrowing by UK agriculture over the five years from 2007 to 2011 had fallen by half and many farmers had taken advantage of low interest rates to restructure and re-equip for the future. This had been helped in Scotland by the Scotland Rural Development Programme although many of those who had failed to secure SRDP funding had gone ahead with their investment anyway. "We are certainly happy to support the creation of new facilities and technology where they have the potential to improve margins and boost producer returns," he said.