Farmers will be able to apply to a new €2bn COVID-19 Credit Guarantee Scheme, Minister for Agriculture Michael Creed has announced.
The scheme will support lending to small and medium enterprises, which includes farmers and fishers, for terms ranging from three months to six years, which will be below market interest rates.
This new scheme will provide an 80% guarantee on lending to small and medium enterprises (SMEs) until the end of this year.
Farmers and other SMEs will be able to go directly to the banks in the scheme, and the guarantee can be used for a wide range of lending products between €10,000 and €1m that have a maximum term of six years or less.
It is not clear whether the scheme will have ring-fenced funding for specific sectors or if specific sectors will have maximum and minimum loan amounts.
The COVID-19 Credit Guarantee Scheme is a further development of the existing Credit Guarantee Scheme which is available from AIB, BOI and Ulster Bank, and it will be possible for other lenders to get access to the scheme.
The Government has said that implementing this scheme will require legislation, the drafting of which has been approved.
“In parallel with the drafting of the legislation and its passage through the houses of the Oireachtas, the Department of Business, Enterprise and Innovation, the Department of Agriculture, Food and the Marine, the Departments of Finance and Public Expenditure and Reform, and the Strategic Banking Corporation of Ireland will work to put in place arrangements to ensure that the scheme can be implemented as soon as possible after the enactment of the legislation,” a statement from Government said.
Minister for Agriculture Michael Creed said: “I have worked with my colleagues to ensure that our primary producers (farmers and fishers) would be included in the new scheme and I am now happy to confirm that they will.
“Cashflow and liquidity is a key issue right along the food chain and this scheme will give confidence to all businesses that assistance will be available when required,” he said.
A range of new measures to support small, medium and larger business that are negatively affected by COVID-19 were announced by Government following a special meeting of the cabinet on Saturday.
The Government also said the Ireland Strategic Investment Fund (ISIF) is revising its investment strategy to establish a sub-portfolio within ISIF called the Pandemic Stabilisation and Recovery Fund.
This will invest up to €2bn of ISIF’s readily available capital in medium and large enterprises, which have more than €50m in annual revenue or more than 250 employees, to assist them meet the challenge of COVID-19.
The fund will act as an accelerator, investing on a commercial basis in businesses that can meet the investment requirements and can use ISIF investment to return to long-term viability.
Investments can be across the range of instruments from senior debt, hybrid instruments to equity, and can be tailored to take account of the particular circumstances of each investee. This will enable businesses to access the capital they need in the form that best suits their individual circumstances.
Reaction: cashflow is key
IFA president Tim Cullinan has welcomed confirmation from Minister Creed that farmers are included in the Government’s €2bn Credit Guarantee Scheme.
“Cashflow is key for farmers at the moment. It’s important that the fund is open to farmers, but we need the detail and the small print to ensure it’s farmer friendly.
“Farmers need access to working capital to cover their operating expenses during this unparalleled crisis. Agri-merchants and co-operatives are not in a position to provide increased/extended credit to farmers as they are experiencing their own cashflow problems as cash dries up,” he said.