AIB ‘assisting farm customers’
“In AIB we have had plenty of experience of working through such situations with clients, most recently pig farmers where incomes were severly impacted by high feed costs during 2008, and compounded by the dioxin scare at year end,” said AIB Agri Adviser Patrick Butterly.
Pig farmers were now back in profit and should stay there for the next 12 months, he said, in an article in AIB’s Agri Matters bulletin. “We are now seeing demand for credit returning to this sector to increase production capacity and improve production efficiencies.
“Where a viable farm business is experiencing cash flow difficulties the options may include increasing overdraft limits, negotiating a top-up on loan facilities, or indeed restructuring where apropriate for an agreed period to support cash flow,” Butterly said. “It must be noted that flexible repayment options whilst appearing cheaper in the short term could be more expensive over the life of the loan.
“Farmers looking to restructure their bank finances should provide a supporting cash flow projection.”
Mr Butterly said the Basel worldwide convention requires banks to increase capital holdings for accounts that go over agreed limits, and said: “If customers think they are going to go over agreed limits or miss a payment they should contact their bank in time to arrange short-term funding.”
