82% of funds drawn down under the low-cost loan scheme – Bank of Ireland
A total of 82%, or €54 million, has been drawn down to date under the low-cost loan scheme, according to the Bank of Ireland (BOI).
The BOI was allocated €65 million under the scheme, which is also known as the Strategic Banking Corporation of Ireland (SBCI) Agriculture Cashflow Support Loan Scheme.
There was very strong demand for the loans; this resulted in its allocation being fully utilised within four weeks.
Significant progress is being made by the bank in getting funding to its farming customers; over 80% of BOI’s SBCI fund has already been drawn down, Acting Head of Agriculture at Bank of Ireland, John Fitzgerald, said.
The average loan value drawn under the scheme is €29,000 and the average loan term is 34 months. [Some] 44% of the loans issued by Bank of Ireland were for terms of greater than four years.
“[A total of] 40% of funding was provided over two years or less. [Some] 56% of all funds drawn [down] by customers to date have been to the beef sector, where the funding is typically used to finance the purchase of trading stock,” he said.
‘The department wishes to have all the loans fully utilised’
However, there is still an outstanding number of customers – who have successfully applied for SBCI funding – who have yet to draw down their loan, Fitzgerald added.
“We are aware that the Department of Agriculture, Food and the Marine’s objective is to have all loans in the scheme fully utilised.
Therefore, we would encourage our customers to draw down their funding to ensure that they benefit from the attractive interest rate of 2.95%.
“In terms of the draw down process, eligible customers will have received an offer letter confirming that their application has been successful, and thereafter they should make contact with the bank to arrange draw down of the facility to ensure inclusion in the scheme,” he concluded.
The scheme was developed by the department in co-operation with the SBCI, making €150 million available to farmers at interest rates of 2.95%.
Distributed and administered through AIB, BOI and Ulster Bank, the scheme aimed to provide farmers with a low-cost, flexible source of working capital.
It was hoped this would allow them to pay down more expensive forms of short-term debt, ensuring the ongoing financial sustainability of viable farming enterprises.