The opening of the low-cost loan or Agri Cashflow Loan Scheme for farmers’ applications appears to be drawing closer.
A spokesperson for the Strategic Banking Corporation of Ireland (SBCI) confirmed to Agriland that the target date for making these loans available is the end of the month.
And, he added the SBCI will be announcing details of participating institutions early next week.
It is understood that the institutions involved in the scheme will be revealed on Monday and it is likely to include a number of the major banks currently operating in the agri-financing sphere.
There is also a possibility that farmers will be able to apply for funding under the scheme before the month draws to close, but this could vary from lender to lender.
What is the low-cost loan scheme?
The low-cost loan scheme, which was announced in Budget 2017, will allow farmers to borrow funds at an interest rate of 2.95%, while farmers can access unsecured loans up to a maximum of €150,000.
This is a cashflow support facility to improve the working capital position of viable primary agriculture SMEs, including farmers.
The loans are primarily to pay down expensive forms of credit such as merchant credit and other short-term financing facilities.
The purposes for which the loans may be used include:
- Working capital requirements.
- As a more sustainable alternative to short-term credit facilities.
- As an alternative to merchant credit.
Low-cost loan scheme deliver welcomed
IFA Farm Business Chairman, Martin Stapleton has welcomed the delivery of the low-cost agri-cashflow loans, due to be available in banks in the coming week.
“IFA campaigned strongly throughout 2016 for lower cost credit to be made available to the farming sector, particularly where farms were under short-term cashflow pressures,” he said.
The announcement of the low-cost loan fund was met with a hugely positive response from the farming sector.
“It is my belief that there will be strong demand for these loans, with farmers using the funding available to restructure their financial commitments and to access low-cost working capital,” he said.
“I am encouraging farmers to look at the overall structure of their short term financing arrangements and to apply for this low cost finance, if appropriate for their farm enterprise needs,” he concluded.