Farm Business

IFA Launches Guide to Covid-19 Low-cost Loans

IFA National Farm Business Committee Chairperson Rose Mary McDonagh has launched IFA’s Guide to the Covid-19 Credit Guarantee Scheme.

“Primary producers in agriculture, horticulture and aquaculture are included under the scheme. Sole traders, partnerships and private limited companies are eligible. The deadline for applications to the scheme is December 31st, so farmers must not put it on the long finger. The banks have this money at their disposal and are very keen to lend it out before the deadline.”

This €2bn fund is overseen by the Strategic Banking Corporation of Ireland (SBCI) and benefits from an 80% state guarantee. It facilitates low-cost lending to small businesses adversely impacted by the pandemic.

Borrowings can be used for working capital, investment or refinancing of Covid-19-related debt. Under this SBCI scheme, applications are made directly to the current participating lenders – AIB, Bank of Ireland and Ulster Bank.

“While an applicant’s business must be negatively impacted by Covid-19, the business does not need to be in a position of severe financial distress. With that in mind, farmers should not be turned off by the eligibility requirement of a 15% loss to their actual or projected turnover/profit as a result of the pandemic. Among other reasons, if you contracted the virus, suffered a drop in output prices, or were unable to sell livestock; you may meet the 15% eligibility threshold.”

Rose Mary McDonagh recommended that farmers should refer to the IFA Guide on the Covid-19 CGS for further detail and speak directly to one of the participating lenders.

The IFA Farm Business Chair concluded by renewing the call for the extension of the EU Temporary State Aid Framework into 2021 and an expanded Credit Guarantee Scheme to support farmers from the imminent economic fallout of an increasingly likely no-deal Brexit next year.

Click here to view the IFA Guide to The Covid-19 CGS.

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