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IFA welcomes the opening of applications for loans

Chair of IFA’s Farm Business Committee Rose Mary McDonagh has welcomed the opening of applications for the Future Growth Loan Scheme (FGLS). An additional €500m has been made available under the scheme.

“This announcement is welcomed by the farming sector, with 40% of the additional funds ring-fenced for agriculture.”

The FGLS benefits from a guarantee from the European Union under the European Fund for Strategic Investments (EFSI). Previously, the minimum loan amount was €50,000 but this has been reduced to €25,000; with a maximum amount of €3m.

According to the Strategic Banking Corporation of Ireland (SBCI), interest rates remain unchanged from the original rates: 4.5% for loans less than €250,000 and 3.5% for loans equal to and greater than €250,000.

“Loans are available for terms of between seven to ten years and are unsecured up to €500,000,” added McDonagh. Loans under the scheme are for investment purposes only. The funds can be used for long-term investment in tangible or intangible assets on agricultural holdings linked to primary agricultural production.

“The FGLS will not suit all farmers because the scheme does not cater for refinancing or working capital facilities. There is an urgent need for the government to open applications for the 80% state-backed Covid Credit Guarantee Scheme, which will be available to farmers who have been negatively impacted by Covid-19.”

There is a two-stage process to apply for loans under the FGLS. Applicants must first attain approval from the SBCI before applying to their chosen bank. The loans will be supplied by AIB, Bank of Ireland and Ulster Bank. The SBCI is actively engaged with three other financial providers who responded to the open call and hopes to announce them as scheme partners in the coming weeks.

McDonagh advised that farmers interested in the scheme should commence their application immediately.