IFA President Tim Cullinan has welcomed the opening of the new €2bn COVID-19 Credit Guarantee Scheme to provide farmers with access to low cost loans as they respond to the impacts of COVID-19.
“The cash burn arising from COVID-19 is unsustainable and is a threat to the viability of many SMEs, including farming. The low-cost COVID-19 Credit Guarantee Scheme (CCGS) will help to address working capital needs in order to protect upstream and downstream employment as well as the productive capacity of the agri-sector,” he said.
“This €2bn fund benefits from an 80% State-backed guarantee and is the largest of its kind in the history of the State. Interest rates, while not decided yet, will be less than current market rates. However, the price of the loan must reflect the cost of the State guarantee,” he said.
IFA Farm Business Chairman Rose Mary McDonagh said, “The inclusion of primary agriculture, horticulture and aquaculture in the CCGS loan scheme is a welcome development as it will address the accelerated and growing demand for cash flow arising on many farms as a result of COVID-19. To qualify for the scheme, an applicant must declare a 15% loss to its actual or projected turnover as a consequence of COVID-19”.
Loan amounts will range from €10k to €1m and will be unsecured up to €250k. Initially, funds can only be used for term loans of up to six years. Overdraft facilities and working capital lending options need to be added immediately, not later in the year.
“The operation of the scheme will be overseen by the Strategic Banking Corporation of Ireland (SBCI) and applications can be made directly through AIB, Bank of Ireland and Ulster Bank. SBCI has launched an open call for the expression of interest among other lenders to participate in the scheme. According to SBCI, the deadline for applications to the scheme is the 31st December 2020,” concluded McDonagh.