02 May 2020
CREDIT GUARANTEE SCHEME IMPORTANT FOR FARMERS’ CASHFLOWCOVID-19, Farm Business & Credit
IFA President Tim Cullinan has welcomed confirmation from Minister Michael Creed that farmers are included in the Government’s €2bn Credit Guarantee Scheme.
“Cashflow is key for farmers at the moment. It’s important that the fund is open to farmers, but we need the detail and the small print to ensure its farmer friendly,” he said.
“Farmers need access to working capital to cover their operating expenses during this unparalleled crisis. Agri-merchants and co-operatives are not in a position to provide increased/extended credit to farmers as they are experiencing their own cashflow problems as cash dries up.”
IFA Farm Business Chair Rose Mary McDonagh has also welcomed the decision by the Central Bank to allow commercial banks and asset finance houses to extend the COVID-19 loan capital and interest repayment breaks to six months.
“The three-month extension will give farmers some additional breathing space given the fallout from COVID-19 on markets and commodity prices. As part of the process Banking and Payment Federation Ireland (BPFI) members, which includes all the main Irish banks, have committed to actively contacting farmer customers who have already availed of the payment break about the possibility of extending the break for a further three months. Farmer customers currently availing of the break do not need to contact their lender,” he said.
For farmers applying for the first time, they will be offered a six-month payment break straight away.
“It’s important for farmers wishing to avail of the break for the first time that they apply and receive approval from their bank/finance house. Stopping repayments without lender approval will impact on your credit history as your loan technically will be classified as non-performing after 90 days of missed repayments.”