- €275m increase to existing agri loan fund
Bank of Ireland today (13 September 2012) announced a number of new initiatives targeted at supporting and assisting the continued growth and expansion of the agri sector. In addition, the Bank announced a further €275m increase to its existing €200m Agri Farm Investment Fund. The increase, along with the €25m working capital fund, which was launched in July, adds up to a cash boost of €500m available to the sector since July 2011.
The Bank is launching these initiatives in advance of the National Ploughing Championships, which takes place in New Ross from 25-27 September, and of which the Bank is a key sponsor.
The new initiatives include;
Agri Development loan
A term loan facility ideally suited to funding farm expansion, whether that is investing in farm buildings, land or livestock. Farmers who are developing their farms to cater for increased dairy output post 2015 may avail of interest only repayment terms in certain circumstances. The bank aims to support these farmer’s cash flows until milk quotas are phased out, and believes that this expansion loan provides support for Irish farmers who want to invest in their business now.
Agri Credit Line
This credit line can provide seasonal funding to all farmers and allows customers to make multiple draw downs during the life of the loan. The Bank aims to help farmers fund seasonal costs over the loan period. As customers can make multiple draw-downs on the credit line during the term of the facility, they may also repay funds into the loan as desired during the term. Each drawdown will be a minimum of 25% of the loan amount.
As Bank of Ireland drives to become the number one farming bank, it wants to encourage new customers to move their business to the bank.
Commenting Sean Farrell, Head of Agriculture, Bank of Ireland said: “We know from speaking to the key industry stakeholders that there is an opportunity for us to grow our share of the agri lending market. We have the capital available and we want to lend. Our medium to long term view of the prospects for farmers in Ireland remains optimistic. We know there will be years in the future similar to 2012 when weather, prices and costs will provide challenges but we will continue to form our view of the sector based on average profitability across a number of years. Taking this approach and noting the opportunities which new and emerging markets provide, together with lifting of milk quota restrictions in 2015, we are committed to growing the agri lending book.
“In July 2012 the Bank launched a dedicated credit line 1890 354 454 and also a €25m fund for farmers to help with cashflow and to cover additional costs incurred as a result of the poor summer weather. While demand for this fund has been limited to date, we expect demand to increase over the remainder of this year The new suite of agri loan products announced today proves that we have ample capital to lend and that we want to stay at the heart of the sector and continue to play a vital role in stimulating growth in the Irish agri sector on a local and global level”.
Welcoming the Bank’s initiatives Simon Coveney, T.D., Minister for Agriculture, Food and the Marine said: I am delighted that Bank of Ireland is providing further funding for the agriculture sector. The package of measures unveiled shows that the Bank is listening to its farming customer base and has responded through preparation of a flexible suite of options that will suit the variable nature of many farming operations. Output in the sector is increasing and the dairy sector in particular has the potential to grow substantially over the coming years. The funding announced today will undoubtedly assist and facilitate this expansion”.
“In the year to date, Bank of Ireland Business Banking has received on average 400 agri loan applications a week. The approval rate is over 80% for these agri loans. In addition we approved funding for the purchase of over 12,000 acres of land during 2011”, added Sean Farrell.
“The Bank anticipates significant expansion of the agri sector in Ireland as the industry works towards realising the Government sponsored Food Harvest 2020 targets. The new agri loan products have been created to help our customers achieve their own personal expansion targets.
“We would ask new and existing farming customers to come and talk to us. A dedicated relationship manager will be available to discuss all of your financial and lending needs”, concluded Sean Farrell.