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Dairy farmers continue to drive demand for the Future Growth Loan Scheme (FGLS), accounting for the highest proportion of loan approvals to date.
The low-cost loan scheme has been in place since April this year and some 126 dairy farmers have been approved for loans – almost triple the number of any other sector.
The next-highest sector was mixed farming with 44 approvals and beef finishers, with 37 approvals. Suckler farmers accounted for just 10. Poultry, sheep, equine and forestry collectively made up 21 approvals.
Farmers must pass through a two-stage process
“Our agri customers have successfully drawn funding including, but not limited to, dairy farm expansions, construction of farm buildings and funding relating to farm improvements and upgrades,” head of agriculture at Ulster Bank Dr Ailish Byrne said.
Farmers must pass through a two-stage process, first applying to the Strategic Banking Corporation of Ireland (SBCI) for pre-approval before continuing to either Bank of Ireland, Ulster Bank or AIB.
While €32.7m has been sanctioned by banks, only €18.4m has been drawn down to date
“The loans are competitively priced (an initial maximum loan interest rate of 4.5% for loans less than €250,000), are for terms of eight to 10 years and support strategic long-term investment in a post-Brexit environment,” the Department of Agriculture said.
The Irish Farmers Journal understands that the initial hot demand for the loan scheme has cooled slightly.
This is reflected in the slow take up of drawdowns. While €32.7m has been sanctioned by banks, only €18.4m has been drawn down to date.
The average amount that has been sanctioned is €113,877, while the average draw down is slightly higher at €116,000.
Amounts of up to €3m can be borrowed but amounts under €500,000 can be lent unsecured.
Despite fears for on-farm cashflow after a year of poor beef prices, both AIB and Ulster Bank reported that farm overdrafts levels were at a similar level to previous years.
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