The Irish Farmers Journal has learned further details concerning the new low-cost loans which will be made available to farmers in the coming weeks.

A spokesperson for the SBCI, which developed the scheme by leveraging the €11m made available under the EU’s exceptional aid along with €14m from national funding, has confirmed to the Irish Farmers Journal that the scheme will be rolled out in the coming weeks by its lending partners.

Three banks, AIB, Bank of Ireland and Ulster Bank, have confirmed to us that they will be offering the unsecured loans at 2.95% interest for sums up to €150,000 for a term up to six years.

While the scheme has not set a minimum loan size, the rate is fixed for the period of the loan, therefore early repayment may incur a break cost.

The SBCI has also confirmed that all farmers including livestock, dairy, tillage and those involved in horticulture will be eligible to apply for the scheme.

According to the SBCI, there will be optional interest-only repayment periods available. Farmers can commence capital and interest repayments from day one if they wish or agree an interest-only period with the bank in question.

These loans are to enable farmers to improve the management of their cashflow and reduce the cost of their short-term borrowings.

Repayment ability

Although the loans will be unsecured in nature, the SBCI spokesperson said that applicants must demonstrate an ability to repay their loans and that normal lending assessment criteria will apply.

However, as they are unsecured, it should be a more straightforward application process.

The SBCI has also confirmed that the loans may be used to refinance existing overdraft, merchant credit facilities or investments made from day-to-day cashflows.

The loans may not be used for the refinancing of existing term loans or new investments and cannot be used in the purchase of land.

It is expected that there will be a high uptake of the €150m loan fund and further details will be made available by each of the banks in the coming weeks.

Read more