- Who can apply to the fund?
- Can farmers in Scotland and Wales apply for the fund?
- Does the fund cover AD plants that will be fed by energy crops?
- What size of AD plant is eligible for the fund?
- Can an AD developer/ operator leasing land from a farmer apply for funding?
- If I am awarded a grant will this affect my eligibility to claim FiTs, RHI, ROCs, or RTFO?
Stage 1 – Grants to develop business plans
- Why do you require a business plan for farm scale AD under the Loan Fund?
- How much money is available to develop my business plan?
- What does the grant for the development of the business plan cover?
- What do you mean by a qualified person?
- Is there a preferred list of consultants to carry out the business development plans?
- How do I apply for the business development grant?
- When will I hear from WRAP once the application form is submitted?
- If my application is successful, when will I receive payment of the grant?
- What will WRAP do with my completed business plan?
Stage 2 – Capital loans
- Do I need to have been awarded an On-farm business development grant before I can apply for the loan?
- What does the loan cover?
- How much capital is available through the loan?
- What is the interest charges for the loan?
- Will there be an arrangement fee?
- What are the repayment options?
- What security is required for the loan?
- What are the lending criteria for the loan?
- Will my eligibility to claim from incentive schemes e.g. RHI, FiTs be affected if I am awarded a loan?
- How does the process of applying for a loan work?
Only farm businesses in England can apply for the grant and loan.
One grant of £10,000 for the development of a business plan and a single loan of up to £400,000 (or maximum of 50% of the capital) is available per farm.(You may only apply for more than one grant or loan if the anticipated AD plants are located on different farms).
No. Only a farm business can apply for funding.
Stage 1 – Grants to develop business plans
You will need to demonstrate that the person you have chosen to deliver the work has the relevant AD and financial experience to carry out the business plan. We will require a copy of their CV and details on any similar work they have carried out previously. We will look for:
1. A demonstrable track record of experience and/ or qualifications in the relevant field. This may be demonstrated by their professional accreditation, CV, case studies, testimonials etc.
2. Professional indemnity insurance of over £1m to cover your business for the investment of time and money you will be making on the basis of their advice.
3. We will need to know whether your selected consultant has any personal or business relationships, for example with or is themselves a technology supplier, which might influence their advice.
4. Assurance that your selected consultant has appropriate financial experience to put together the required financial plans required for the project.
No. It will be up to the farmer to find an appropriately qualified consultant/agent to deliver the work. As part of the grant application you need to demonstrate that your chosen consultant delivers value for money. You therefore need to get a minimum of three quotes. Organisations such as the NFU and ADBA can provide a list of consultants.
Register online at www.wrap.org.uk/onfarm to access and download the application form and supporting guidance document. Complete the application form and send it to firstname.lastname@example.org. WRAP will review your application which may mean we will contact you to discuss your proposed project further.
WRAP will review applications for grants on a rolling basis. We may need to contact you to help us fully understand your application. Otherwise your application will go forward to the next review meeting. Review meetings are held at the end of every month. All applications that are received by the 15th of the month will be assessed at the end of that month. Applications received after the 15th will be assessed at the end of the following month. This may change, due to the volume of submissions received, in which case we will inform you on receipt of your application.
WRAP will aim to contact you within 10 working days of the review meeting with a decision.
Developing the business develop plan comprises of two stages. The first stage is an initial high level scoping study to determine whether or not an AD plant is an appropriate addition to the farm business. The second stage is the development of the business case using the business plan template and will only proceed if the outcome of the initial scoping study recommends the build of an AD plant of less than 250kW energy output fed predominantly on farm wastes.
The two payments of the grant therefore correspond to the completion of two stages described above. The first payment will be made once the scoping study report is completed and the second payment will be made once the business plan is completed. Both documents will need to be sufficiently detailed and received by WRAP along with proof of payment which is usually evidenced with a bank statement to the consultant who has delivered the work. Payment will be made to your account via BACs.
WRAP will treat the information in your business plan as confidential. If your business case highlights good practice from which other farm businesses could benefit we may publish a case study. The content of any case studies will be discussed with you before it is published. It will not contain any commercially sensitive information.
Stage 2 – Capital Loans
No. You do not need to have been awarded a business development grant, however we recommend that you refer to the business development plan template available on the WRAP website to ensure that your business plan includes all the required information needed by WRAP to assess your loan application.
The loan covers the capital expenditure for the AD development and costs associated with planning, permits and consultancy fees (unless already covered through the grant). It does not pay for the ongoing operational costs of the plant.
A maximum of £400,000 or up to 50% of the allowable capital cost of the AD build.
The farmer will need to match loan funding with finance from other sources.
Interest is charged at UK Reference Rate plus a margin based on the level of risk taken by WRAP. (http://ec.europa.eu/competition/state_aid/legislation/reference_rates.html)
The interest margin is likely to be in the rate of 3 – 12 % depending on the risk and the individual details of your project. A number of factors will be considered when assessing the risk including the nature of the project being undertaken.
An arrangement fee will be charged on each loan and this will be payable prior to the release of funds. In some circumstances, this fee can be added to the loan, however this will attract interest along with the principal. Security fee – the legal fee incurred to register the security associated with the loan will be payable prior to the release of funds. Valuation fee – the fee incurred to value to asset(s) will be payable on draw down.
If you satisfy our eligibility criteria and are able to demonstrate that your business can service the debt during the term of the loan, we will work with you to agree a suitable repayment arrangement based on the overall farm business. Both the principal and interest can be paid monthly; quarterly; half-annually or annually. In addition, it may be possible to defer payments for a period of up to 12 months during the term of the loan. Such payment holidays will be agreed in advance of the release of funds.
WRAP prefers to take priority charge over the assets being funded or other suitable assets, however, if it is not possible to grant a priority charge, or the assets are of insufficient value, we may consider alternative security. Assets must be insured for a minimum reinstatement value as advised by our valuer.
The farmer must have the ability to repay the loan, including interest and fees over the agreed term.
- P&L accounts for the last 3 years of trading are required where available.
- Cash flow projections and business plans are required.
- A credit check will be undertaken on the borrowing entity.
- Quality and value of the underlying asset(s).
The business must be able to demonstrate that they have applied for commercial funding, which has either been declined or offered on terms which questions the overall viability of the investment project. (Full details of the information required to assess creditworthiness are in the application pack issued on completion of the Eligibility Checklist.)
9.Will my eligibility to claim from incentive schemes e.g. RHI, FiTs be affected if I am awarded a loan?
The loan will be made available on a commercial basis and therefore it is not recognised as State Aid. Receipt of the loan does not conflict with incentives schemes.
WRAP has a finite loan pool and selects projects for funding through a competitive process, with those applications most strongly meeting our criteria being granted a loan.
1) Complete the initial eligibility checklist at www.wrap.org.uk/onfarm
2) If you meet the eligibility criteria a member of the WRAP team will contact you to discuss your project in more detail.
3) Following your discussion with WRAP a loan application form will be sent to you.
4) Complete the application form and submit to WRAP.
5) WRAP will review you application and if approved you will be sent an offer proposal which is subject to due diligence.
6) If no issues arise from the due diligence then terms can be finalised and the loan drawn down.