Irish farmers and contractors to get €50m in farm machinery funding
A €50m fund for small to medium-sized enterprises (SMEs) seeking to buy or lease farm machinery has confirmed a sixth on-lender.
The fund will cater for the buying or leasing of tractors, combine harvesters and balers, among other farm machinery.
The Strategic Banking Corporation of Ireland (SBCI) announced this morning that First Citizen Finance has become the sixth lending partner to finance the €50m fund.
It channels loans to Irish businesses from the European Investment Bank, the Ireland Strategic Investment Fund and the German Bank, KFW, among others.
The SBCI has now committed 99% of its original funding (€790m of €800m) to three banks (AIB, Bank of Ireland, Ulster Bank) and three non-bank lenders (First Citizen Finance, Finance Ireland and Merrion Fleet).
The announcement was made at an SBCI event for SMEs, which took place in Limerick this morning, attended by more than 100 small businesses.
EU Commissioner for Agriculture and Rural Development Phil Hogan was the keynote speaker at the event.
“The announcement today by SBCI and First Citizen Finance is a great example of how to drive investment in rural areas,” Hogan said.
“Investment, growth and jobs are the top priorities of the European Commission, and improved access to competitive finance is the catalyst to making this priority a reality.”
Acting Minister for Finance Michael Noonan said he was pleased with the announcement as it is a further example of how the SBCI is applying its funding to all branches of the economy.
“It is evidence of help being available to those SMEs who seek funding to grow and maintain their positive impact on Ireland’s national economic well-being,” Noonan said.
“We are delighted to extend our asset finance services to the agribusiness sector,” First Citizen Finance Managing Director Chris Hanlon said.
“We look forward to bringing the same high-quality service and nationwide reach to agribusinesses as we have to our existing customers.”
Hire Purchase Vs Leasing
The new lending products are available as of today. Here’s a breakdown of how it works:
|Repayment over 2 to 7 years||Repayment over 2 to 7 years|
|First Citizen buys equipment on behalf of SME and SME acquired ownership when Final Payment is made||First Citizen retains ownership and SME pays for the use of the asset|
|Fixed interest rate – fixed payments over a fixed term||Fixed interest rate – fixed payments over a fixed term|
|VAT can be reclaimed immediately (if SME is VAT registered)||Leasing rental payments may qualify for tax deductions|
|Interest can be offset against taxable profits||SME has the same use of the equipment as if it owned it outright|
|Capital allowance costs can be offset against tax over time||Initial capital outlay is minimised, helping SME’s cashflow|