Farming

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Two new bank loans on offer for farmers

Bank of Ireland has added two new loan facilities aimed at farmers who want to expand their business, bringing the total agri-lending fund at Bank of Ireland to €500m.

The bank's new Agri Development Loan is a term loan facility aimed at funding farm expansion, whether that be investing in farm buildings, land or livestock.

Sean Farrell, head of agriculture at Bank of Ireland, said dairy farmers gearing up for increased dairy output post-2015 could avail of interest-only repayment terms in certain circumstances.

This option will only be available to farmers who have sufficient repayment capacity to repay full capital and interest over the remainder of the loan term when quotas no longer apply.

A second loan facility, called the Agri Credit Line, is aimed at providing seasonal funding to all farmers to fund seasonal costs.

The farmer can make multiple draw-downs (minimum 25pc of loan amount) during the life of the loan and repay funds during the term.

Interest rates charged on both the Agri Development Loan and the Agri Credit Line will range from 4.7pc to 6.7pc, depending on the individual farmer.

The amount of the loan, risk involved and availability of security will determine the interest rate charged.

Bank of Ireland says its 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," said Mr Farrell.

Indo Farming