Equestrian arena finance for arenas, indoor schools and stables

A riding school does and a pure livery yard does not. In England any business that hires out horses for riding or for riding lessons needs a licence from the local council under the Animal Welfare (Licensing of Activities Involving Animals) (England) Regulations 2018, which covers riding schools, trekking centres, pony parties and pony rides. A yard that only keeps and cares for horses owned by its clients is not hiring out horses, so the VOA's own guidance notes that a livery only operation needs no licence. Once you start offering lessons on horses you provide, or letting riders pay to ride your horses in a new arena, the licence applies. Before granting it the council inspects the premises with a vet registered with the Royal College of Veterinary Surgeons to carry out these inspections.

How long does a licence to hire out horses last?

One, two or three years. Councils give each business a star rating from one to five based on its compliance and risk, and the rating sets the length, with a three year licence reserved for five star businesses. A new business can only get a one or two year licence. Lenders funding a riding school arena read the rating and the renewal date as part of the income case, because a lapsed licence would stop lessons straight away.

• Licence. The current licence, its star rating and its expiry date.
• Inspection report. Any requirements the council or vet set at the last visit.
• Horses. Numbers used for lessons and hire against the licence.
• Insurance. Public liability and employers' liability cover.

GOV.UK sets out the licence to hire out horses in England. Arena surfaces and drainage often need a secured business loan against the yard, and our equestrian finance hub covers the wider business. Instant Quotes shows which panel lenders could look at an arena for a licensed riding school.

Usually yes. The VOA treats riding schools and livery stables as rateable business premises, even where the owner's house is on the same site, in which case the whole is assessed as a composite property. Horses kept for riding are not livestock for rating purposes, so stables, tack rooms and loose boxes are not agricultural buildings and do not get the agricultural exemption. Stables are valued box by box from local rents, and indoor and outdoor arenas are added to the valuation, so building a new arena can raise the rateable value. Small business rate relief and other reliefs can reduce or remove the bill for a small yard, and the VOA says reliefs mean many private stables pay no business rates at all. Ask a rating adviser to estimate the effect before you build, and include the result in the cash flow you show a lender.

Is grazing land for horses exempt from business rates?

Generally yes. The VOA's rating manual says land used only for grazing horses should be treated as agricultural land, which is exempt. Land used mainly or permanently as an outdoor exercise area does not meet that definition and is rateable. Buildings used solely for an exempt purpose, such as a separate hay barn, can still be exempt even on a rated yard.

• Stable count. Boxes let for livery and boxes used for school horses.
• Arenas. Size of each indoor and outdoor arena, measured by the VOA.
• Grazing. Fields used only for grazing, kept separate from exercise areas.
• Reliefs. Small business rate relief or other reliefs the council applies.

The VOA's rating manual covers riding schools and livery stables. Buying a yard that already has an arena is covered on commercial mortgages, and farm diversification finance suits farms adding livery. Instant Quotes helps a yard owner see which panel lenders fund equestrian property.

Facilities decide what a yard can charge and who it can attract. A good all-weather arena keeps lessons and schooling going through winter, when grass is unusable and clients look elsewhere. An indoor school lets a riding school run its timetable in any weather and lets a centre host clinics, dressage and show jumping all year. Better stables and a horse walker can support full and competition livery, which usually carries higher fees than DIY. Facility hire to outside riders can add income from an arena that would otherwise sit empty during the day.

The question for a lender, and for you, is whether the new facility adds enough income, or protects enough existing income, to cover the repayments in a cautious year.

Arenas, indoor schools, stable blocks and floodlights usually need planning permission, and the council may set conditions on lighting hours, the surface, drainage and commercial use. Lenders check that what they are funding is authorised, so have the permission and its conditions ready before you apply. Keeping horses for commercial livery or lessons is generally treated as a different use from agriculture, so a farm adding an arena for a new equestrian business should also read our farm diversification finance page.

Who owns the land matters. A yard on rented land needs a lease that runs longer than the finance and allows the works, and the lender may want the landlord's consent. Many yards sit next to a house. If borrowing would be secured on a house that you or a relative live in, it is likely to be a regulated residential mortgage, which we do not arrange. We arrange business borrowing secured on commercial yards, land and buildings that are separate from any dwelling, and can point you towards a regulated adviser for the rest.

A cheap arena can cost more in the end: poor drainage or the wrong surface can mean rebuilding within a few years while you are still repaying the first build. Surfaces need topping up and maintenance, which belongs in the budget. Secured borrowing puts the yard at risk if the income does not arrive, and building delays can push back the date the facility starts earning. Phasing the work, for example building the arena first and an indoor school once it has proved demand, can reduce both risk and borrowing. Borrowing of £25,000 or less by sole traders and small partnerships can be regulated consumer credit, which brings additional protections.

Capital allowances such as the Annual Investment Allowance may apply to some equipment, such as a horse walker, but not usually to groundworks; ask your accountant how the rules apply to your project.