AIB, Bank of Ireland and Ulster Bank will make €150mn available to farmers throughout Ireland at a 2.95% interest rate, in the Agriculture Cashflow Support Loan Scheme launched on Tuesday by Agriculture Minister Michael Creed.
The scheme will operate to September 30, or until it has been fully subscribed, if earlier.
Loans can be used for future working capital requirements (for example, feed, fertiliser, trading stock, tax, other costs); as an alternative to merchant credit, and to replenish working capital used up to December 31 , 2016.
Loans cannot be used for refinance of undertakings in financial difficulties; refinance of existing debt (such as terms loans, leases, hire purchase etc; nor for new investment.
Loans for the purchase of breeding stock are excluded.
The scheme aims to support farmers experiencing short-term financial pressure due to price and income volatility, enabling them plan and budget more effectively by providing an attractive cash flow support loan product as an alternative to more expensive forms of credit.
The loans are available with support from the Strategic Banking Corporation of Ireland (SBCI), subject to the three financial institutions’ own credit policies and procedures.
A single loan per farm enterprise up to a maximum loan amount of €150,000 is available for a loan term of minimum one year to a maximum of six years.
Loans are unsecured, and the option of interest only repayments is available at the start of the loans.
The interest rate of 2.95% is fixed for the loan term.
Farmers in financial difficulty cannot apply for loans; instead they are primarily aimed at those under short-term cash flow pressures caused by recent difficult market conditions. Nor can farmers apply who in the last five years entered into an arrangement with creditors, in the context of being bankrupt or wound-up or having their affairs administered by the courts.
Also ruled out are farmers engaged solely in forestry, aquaculture or equine-related activities.
The Scheme is being made available to dairy and other livestock farmers under and subject to the conditions of the 2016 exceptional EU adjustment aid. In other farming sectors, the scheme is subject to the EU’s de minimis state aid regulations.
According to SBCI, farmers availing of the loans must be participating in an agri- environment scheme or a Bord Bia quality assurance scheme or a quality assurance scheme run by a co-op, processor or producer representative body.
Alternatively, they can be a member of a DAFM-registered farm partnership, or have completed or are participating in the financial management elements of the Knowledge Transfer Programme, or previous programmes such as the Beef or Sheep Technology Adoption Programmes.
Farmers can also qualify by having a certificate (or other evidence) of participation in financial training from Teagasc or another body relating to eligible agricultural sectors.
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