24 Nov 2016
LOW COST LOAN FUND – YOUR QUESTIONS ANSWEREDFarm Business & Credit
The €150m low-cost loan fund for farmers secured by IFA in Budget 2017 is now open, providing cashflow support loans for farmers at 2.95% interest.
The Agriculture Cashflow Support Loan Scheme makes €150 million available to farmers at low-cost interest rate of 2.95%.
How much can I borrow?
The loans will be for amounts up to €150,000 for up to six years.
What can I use these loans for?
The Agriculture Cash Flow Support Loan Scheme is a cash flow support facility, providing farmers with a flexible source of working capital and allowing them to pay down more expensive forms of short-term debt (e.g. merchant credit and overdrafts).
The loans may not be used for refinancing of existing term loans or new investments. However, by using this facility and improving the cash flow position of their business, many will be in a better position to negotiate and restructure existing loan commitments.
What interest rate applies?
The interest rate on these loans is set at 2.95%.
The loans will be flexible with interest only facilities of up to three years (minimum of 18 months) available at the start of the loan.
How do I apply for a loan?
Loans are available through AIB, Ulster Bank and Bank of Ireland. Normal lending criteria applies.
Further details are available in local branches and through their websites. Normal lending assessment criteria will apply although the loans will be ‘unsecured’ in nature, thereby facilitating a more straightforward application process.
The loans will be dispersed on a “first come, first served” basis and will need to be allocated by late summer 2017 to comply with the requirements attaching to the EU funding.
Who can apply?
The loans are available to all livestock farmers, tillage farmers, horticulture producers (including mushroom growers) and others involved in primary agricultural production (including poultry producers).
Applicants will also need to satisfy at least one of the following eligibility criteria:
- currently participating in an agri-environment scheme under the RDP
- be a certified member of a Bord Bia Quality Assurance Scheme
- be a certified member of a Quality Assurance Scheme run by a co-operative, processor or producer representative body
- be a member of a DAFM-registered Farm Partnership.
- have successfully completed or be participating in DAFM’s Knowledge Transfer Programme or previous programmes such as BTAP and STAP (and specifically, the financial management elements of those programmes)
- have participated in financial training given by Teagasc (including the Cash Flow module included in recent farm walks), and can produce a certificate to this effect.
- have participated in financial training from another body relating to the eligible agricultural sectors, and can produce a certificate to this effect.
What is the SBCI?
The Strategic Banking Corporation of Ireland is the Government backed agency charged with sourcing lower cost funding (through the European Investment Bank for example) which can then be lent on to SMEs and farm businesses at lower rates than the banks are charging. In operation for about 2 years, the purpose of the SBCI is to increase competition in the Irish banking sector.
Get more details on the measures announced for farmers and agriculture in Budget 2017