Future Growth Loan Scheme effectively closed for farmers
The Future Growth Loan Scheme (FGLS) is effectively full for farmer applicants, with no banks currently offering funding in the agricultural sector, according to the Strategic Banking Corporation of Ireland (SBCI).
Since its establishment last June, the corporation noted that there has been very strong demand from small and medium-sized enterprises (SMEs) and farmers for this longer term, lower cost finance.
This demand has resulted in a rapid take-up of the scheme and consequently there is limited remaining capacity, the SBCI noted.
Of loans approved to date, the majority of these have been sanctioned on an unsecured basis.
Unsecured lending, for terms of eight to 10 years, if available in the market would attract interest rates in the region of 7% to 9%.
Based on the figure of sanctioned loans to date, some €71 million, the annual interest savings on this portfolio will be in the region of €2.5 million, the SBCI says.
Based on the average loan of €136,000, the approximate annual interest saving will be in the region of €4,500 versus market rates for unsecured loans.
- In excess of 2,900 eligibility codes have been issued by the SBCI – with 34.5% of these issuing to the agricultural sector;
- There are 964 loans sanctioned under FGLS totalling €195.3 million; and
- Primary agriculture accounts for 524 of these loans – some 54.4%, totalling €71 million or 36.4% of the funding sanctioned.
Delivered to the market by the SBCI in June 2019, the FGLS initiative is supported by the Department of Business, Enterprise and Innovation and the Department of Agriculture, Food and the Marine.