How is the MilkFlex loan scheme progressing?

Since we first launched MilkFlex in 2016, we’ve lent over €120m to 1,200 Irish dairy farmers.

We first partnered with Glanbia, Rabobank and Ireland Strategic Investment Fund, and we’re now working with 19 Irish co-ops.

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The first MilkFlex fund expired last April and we’re now a year into our second MilkFlex fund, which is already starting to surpass the first in terms of the volume of loan applications.

How does a MilkFlex loan work?

Any dairy farmer who has a milk supply agreement and whose co-op is participating in MilkFlex can apply for a MilkFlex loan.

The repayments on the loan will come from the farmer’s milk cheque eight months of the year. Farmers do not have to make repayments from December to March.

Loan repayments reduce by 50% for six months when milk prices fall below 28c/litre for three consecutive months, while repayments are suspended for six months when the milk price falls below 26c/l.

Repayments will accelerate if the milk price rises to 34c/l or higher. No surcharge interest is applied during these flex events.

What are the terms of MilkFlex loans?

The minimum loan amount is €25,000 and the maximum is €300,000.

The variable interest rate is 3.75%, (after setup costs are included the APR is 4.18%) which is very competitive, particularly for a long-term loan.

Loans can be used for working capital, fertiliser, feed, machinery, farmyard development, drainage and stock purchases and renewable energy projects on the farm such as solar panels.

The loans cannot be used to buy land.

Is security required?

No asset-based security is required for any MilkFlex loan. A personal guarantee is required if the borrower is a limited company.

How is the Twenty20 Beef Club pilot progressing?

In April this year, Glanbia, Kepak and Finance Ireland announced a new pilot dairy calf to beef programme called the Twenty20 Beef Club.

The pilot is oversubscribed, with 6,000 animals now in the scheme.

In time, we hope to expand the scheme to 50,000 calves each year.

We set aside funding for this pilot, which gives beef farmers the option to receive cashflow payments of either €25 or €35 per animal per month from months three to 24 of the animal’s life.

Once the animal goes to slaughter, Finance Ireland is repaid this money, including interest, and the farmer keeps the balance of the factory payment.

What is FundEquip?

FundEquip is another innovative scheme that Finance Ireland has developed with Glanbia and SBCI.

This is a finance option for smaller-ticket investments, such as bulk tanks and power generators on farms.

The minimum loan for equipment is €3,000 and the maximum is €75,000.