A layer of red tape will be added to the next low-cost loan scheme according to the Strategic Banking Corporation of Ireland (SBCI).

Any farmer applying will need to first apply directly to the SBCI for pre-clearance to ensure loan eligibility before approaching a bank for funds.

“The pre-clearance facility means that, in the future, applicants to SBCI loans will come to the SBCI first for pre-clearance,” chief executive of the SBCI Nick Ashmore told the Oireachtas Committee for Agriculture on Tuesday.

A costly year

After an extremely costly year on many farms, the news is likely to further frustrate farmers who have been waiting to hear news of the loan scheme which was promised in the last budget.

The SBCI also confirmed that they were only at the “early stages” of discussions with banks on detail of the scheme but it would differ in focus to the previous loan scheme which provided over €145m to 4,200 farmers at an interest rate of 2.95%.

“We’re into the early stages of working up and delivering the next scheme which as the Minister [Creed] said is focused on long-term capital investment and finance,” Ashmore said.

He assured the Oireachtas Committee that the pre-clearance system was currently in use for the Brexit loan scheme and worked very well.

“We have a form on our website which they can download and email in but we also have a full-time support line,” Ashmore said.

Minister for State for Agriculture Andrew Doyle previously told the Irish Farmers Journal that he had expected the scheme to rolled out this summer.

Ashmore attributed the delay in roll out to the inability of the SBCI to run two schemes concurrently, with priority given to the €300m Brexit loan scheme for SME’s announced in March.