Farmers seek smaller Brexit loans

Farmers seek smaller Brexit loans

For the €300m SME Brexit Loan Scheme to work for farmers, they would need the minimum loan amount to be dropped from €50,000 to €20,000, said ICMSA farm business chairman Shane O’Loughlin.

While welcoming the loan package launched jointly by Business, Agriculture and Finance Ministers Heather Humphries, Michael Creed and Paschal Donohue, the ICMSA has also urged the Government to clarify the procedures for application.

Primary agri producers were excluded from the original SME Brexit Loan scheme. ICMSA says there is a lack of clarity in the information available on the SCBI’s website, managers of the scheme. The providers of the loans will be AIB, Bank of Ireland and KBC.

Shane O’Loughlin said: “If a farmer wants to consider applying, there is no obvious procedure to which he or she can refer or follow. Farmers are daily making their projections and financial plans in terms of investment and — against the background of historically unprecedented uncertainty — ICMSA doesn’t think that it was unreasonable to ask the Government to provide relevant information on the actual announcement of the scheme and there has been two years to sort this out”.

ICMSA noted that the minimum loan amount of €50,0000 would be higher than the €20,000 loans most farmers will need to respond to Brexit.

“We’d also be very disappointed at the decision to permit an interest rate of 4.5% given that the previous scheme had money available at 2.95% — a rate itself higher than would ordinarily be charged in similar circumstances in other EU states,” said Mr O’Loughlin.

ICMSA has welcomed the fact security will not have to be offered with their applications. SMEs and farmers can apply for loans from April 17.

The Department of Agriculture said at least 40% of the €300m fund will be made available to farmers. Small businesses are the other main target for the loans.

Minister for Agriculture, Michael Creed, said: “This is a long-awaited source of finance for young and new entrant farmers, especially the cohort who do not have high levels of security. It will also serve smaller-scale farmers, who often do not have the leverage to negotiate for more favourable terms with their banking institution.

“Along with products such as Milk Flex, this Scheme will form part of a comprehensive investment package for farmers. I am also delighted to be able to include the seafood sector in the scheme. Food companies have identified long term investment finance of up to ten years as a critical need which is currently unavailable in Ireland.”

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