Death By Hire Purchase Agreements

• Published date: 01 November 2021
• Subject Matter: Finance and Banking, Real Estate and Construction, Financial Services, Land Law & Agriculture
• Law Firm: Albert Goodman
• Author: Tom Stone

As well as talking through the profit and loss account of each farming client, we also focus on the cash flow statement.

Cashflow management is important for most farming businesses, due to the amount of capital invested in stock, machinery, and land.

Given the day to day investment required, most farming businesses have a significant amount of loans, working overdrafts and/or hire purchase arrangements.

The latter is often a less well-managed source of finance. Hire purchases arrangements are a useful and essential source of finance for machinery and tractor purchases. We do also see them used to purchase livestock and fund short-term cash requirements when other financial providers will not.

In recent years we have seen a vast increase in the cost of machinery and tractors and therefore an increase in the hire purchase liability and the monthly payments due. This, coupled with the demand for having new...