ICMSA welcomes loan scheme but calls for minimum amount to drop

The announcement made today (Wednesday, March 27) of the launch of the Future Growth Loan Scheme has been welcomed by a dairy farmers’ lobby group.

However, Shane O’Loughlin, chairperson of the Irish Creamery Milk Suppliers’ Association’s (ICMSA’s) Farm Business Committee, has said that there is a “lack of clarity” on the loan package.

He said: “If a farmer wants to consider applying, there is no obvious procedure to which he or she can refer or follow.

Our first reaction is that the minimum amount of €50,000 will actually be in excess of many requirements.

He explained that while the ICMSA appreciates there must be a cut-off at a particular point, it suggests that the minimum amount available should be lowered to €20,000.

O’Loughlin described the decision to permit an interest rate of 4.5% as “disappointing”.

He said: “The previous scheme had money available at 2.95%, a rate that is higher than would ordinarily be charged in similar circumstances in other European states.”

O’Loughlin welcomed the fact that security will not have to be offered for the loan application to be considered.

The scheme was unveiled by Ministers Heather Humphreys, Michael Creed and Paschal Donohoe; it was announced that businesses will be able to apply for loan eligibility through the Strategic Banking Corporation of Ireland (SBCI) from April 17.

Three finance providers – AIB, Bank of Ireland and KBC – have agreed to participate in the scheme and negotiations are ongoing with another two.

The Government is urging businesses to use the coming three weeks to start preparing their proposals for long-term capital investment.

The funding allocations for the Future Growth Loan Scheme are €37 million from the Department of Business, Enterprise and Innovation and €25 million from the Department of Agriculture, Food and the Marine.

The Department of Agriculture, Food and the Marine’s share of funding ensures that at least 40% of the fund will be available to farmers and agri-food businesses.

Of the total budget, €42 million relates to expenditure in 2018 with a further €6 million allocated in 2019 and the remaining €14 million over a third tranche.