Speaking following the launch of a €400m low-cost loan fund by the Strategic Banking Corporation of Ireland this morning, IFA President Eddie Downey welcomed the new initiative and the fact that the farming and agri business sector will have access to this money through the pillar banks.
Eddie Downey said the farming sector would be looking for a number of elements in the funding package announced. “Specifically, farmers expect the loans to be flexible, allow for ease of access, offer lower rates than that currently available and be in a position to cater for variable scales of investment on farms.
The IFA President said farmers planning to invest in growing their farm business should ensure that they look to access this lower-cost finance from their local AIB or BOI branch. The funding will be available for between two and 10 years from early March. One of the pillar banks has confirmed to IFA that they will be offering money from the fund at 4.5%.
The SCBI will offer long-term working capital and capital investment finance through both the retail banks and other non-bank lending institutions. The purpose of the SCBI is to offer more flexible products to SMEs and farm enterprises with longer maturity and capital repayment flexibility than currently offered by the mainstream banks and to offer lower-cost funding to financial institutions, which will then be passed on to SMEs.
Eddie Downey said, “Significant investment is planned on farms with the abolition of milk quota and the rollout of the RDP TAMS programme. It is expected that there will be strong demand from the farming sector for matching funding via the banking system over the coming years”.