Poll: Will you apply for the low-cost loan scheme?

The Agri Cashflow Support Loan Scheme, which was announced in Budget 2017, is expected to open for applications this month.

Under the scheme, livestock farmers, tillage farmers, horticulture producers and others involved in primary agricultural production will be able to apply for funding once they meet certain criteria.

The low-cost loan scheme will be introduced by the Strategic Banking Corporation of Ireland (SBCI) and the funding is expected to be made available through a number of key banks.

The loans will be for amounts up to €150,000 for up to six years. The interest rate at 2.95% will represent a significant saving for farmers when compared with other forms of finance currently available.

The loans will be flexible with interest only facilities of up to three years and were designed to help farmers struggling with cash flow difficulties.

Normal lending assessment criteria will apply although the loans will be ‘unsecured’ in nature, thereby facilitating a more straightforward application process.

Will you be applying for the low-cost loan scheme?

Will you apply for funding under the low-cost loan scheme?

  • Yes (67%)
  • No (33%)

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How will you use this credit facility on your farm?

  • Working capital requirements (53%)
  • An alternative to short-term credit facilities (25%)
  • An alternative to merchant credit (21%)

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Do you think the low-cost loan scheme is an attractive option for farmers?

  • Yes (83%)
  • NO (17%)

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What can the loans be used for?

The low-cost loan fund 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.

What Can’t The Loans Be Used For?

The loans under the scheme cannot be used for any of the following:

  • Refinance of existing term loans.
  • The refinance of undertakings in financial difficulties (as opposed to cashflow difficulties; this is defined in EU guidelines.)
  • New investments.

However, by improving the cashflow position of their business through use of this facility, many farmers will be in a better position to negotiate and restructure existing loan commitments.

Also Read: Find out if you qualify for a low-cost loan here