The Irish Farmers Journal understands that the new low- cost loan scheme announced by Minister Creed in the budget will be available to farmers in the coming weeks.

Speaking to the participating banks, AIB, Bank of Ireland and Ulster Bank, they all expect to have products available to farmers in the first weeks of February.

The scheme was created by leveraging the €11m made available under the EU’s exceptional adjustment aid for milk and other livestock farmers, along with €14m in National funding.

The scheme will offer low-cost unsecured loans at 2.95% interest to farmers, up to €150,000 for up to six years, with an interest-only period of up to three years. This is at a 0.5% to 1% discount to what’s on offer at the moment.

More details will be announced in the coming weeks. As the loans are unsecured, it is expected to be a straightforward and relatively fast application and approval process. Once approved, funds will be available to farmers within two weeks.

The loans can be used to pay down expensive forms of credit, such as merchant credit and other short-term financing facilities. The loans may not be used for refinancing existing term loans or new investments or buildings. However, they can be used to retrospectively fund development that has taken place out of cashflow.

There has been significant interest in the new low-cost loans to date and it is expected that there will be a surge of applications in the first few weeks.