‘Education apparent in finance applications’
Head of agriculture at Bank of Ireland Eoin Lowry.\ Donal O'Leary

Head of agriculture, Bank of Ireland, Eoin Lowry

“Most full-time young farmers seeking credit from us are dairying. There are some young farmers engaged in the tillage and drystock sectors and most of these applicants have off-farm employment.

“Most young farmers seeking credit are well educated. Many applicants today have a degree qualification, be it in agriculture or otherwise. This level of education is apparent in the quality of the plans and applications coming to us.

“The three notable characteristics of young farmers who are successful in obtaining loans are – having a good education, some travel experience and being a member of a discussion group.

“TAMS II has been a hugely successful scheme. Most of the loan applications we see for farm improvement have TAMS approval. The support needed to invest in stock or purchase land, areas outside TAMS funding eligibility, is why many young farmers seek credit.

“We encourage young farmers to engage with banks as early as possible in their careers. It is important to start building a track record to have something to stand over when applying. We recognise it is difficult for a young person to accumulate cash equity at an early stage of their career.

“We try to understand the person, the business plan and the farm when assessing applications. Education, experience, management skill and technical skill are all areas of importance to us when reviewing applications.

“Generally, applicants would be the son or daughter of an older farmer taking over the running of the business. This category of applicant might look for a loan to fund farm improvements and use the family farm as security for the loan.”

‘Time spent in the planning process is time well spent’

Donal Whelton, head of agriculture, AIB

“When a young farmer comes on board as a partner in the farm business or takes over full responsibility for the farm, they usually undertake some level of investment.

“In most instances farm investment tends to be relative to the scale of the enterprise, as ultimately repayment capacity in most instances will come from the farm. Relative to other sectors, dairy farmers tend to have higher debt levels, followed by tillage farmers.

“In the scenario of a young farmer from a non-farming background, they may not have the proven track record of the farm and as such a business plan would be important. We would also look at the experience and track record of the individual.

“Business plans are very important for young farmers, particularly where the farm is undertaking significant investment and the farm is planning to increase output or change direction.

“We cannot overstate the importance of the young farmer being involved in developing the plan and owning the plan themselves. Time spent in the planning process and preparation stage is time well spent.

“In the main, land is used by young farmers to secure agri-related loans. If the bank is doing some element of unsecured lending, it will very much depend on the planned investment, the repayment capacity of the farm and the management ability of the borrower.

“There have been a number of SBCI (Strategic Banking Corporation of Ireland) schemes recently, which were available to the farming sector, that have provided unsecured loans to customers.

“Our advice to any young farmer looking to start out in the sector would be to identify your personal and business goals and put a plan in place to achieve them.

“Look for opportunities to learn from top performing farmers or get some experience abroad. Start to build your network with the people who will be key to your business in the future such as agri–adviser, accountant, bank manager or merchant.”

‘Farm partnerships the preferred option’

Spokesperson, Ulster Bank

“Ulster Bank supports young farmers across all sectors and regions. Over the last few years, young farmers have availed of the SBCI Future Growth Loan Scheme with Ulster Bank, as it allowed them to borrow for long-term investment purposes without the need to provide security, up to €500,000, at very attractive interest rates.

“In general, farmers commencing a new farm enterprise or undertaking large scale expansion, prepare and present the bank with a business plan.

“The most important aspect of a farm plan for Ulster Bank is that the farmer has had a lot of input into the plan and understands the assumptions on which the plan is developed.

“We are currently experiencing a high volume of applications from farm partnerships, which is typically comprised of a young farmer and their parents.

“Farm partnerships present a number of benefits, they can lead to better decision making on the farm and where a young farmer has completed the appropriate training they may qualify for a higher grant under TAMS, which proved to be very popular among young farmers and farm partnerships.”