Friday, 6 September 2019

Questions (1363)

Charlie McConalogue

Question:

1363. Deputy Charlie McConalogue asked the Minister for Agriculture, Food and the Marine the number of farmers and food businesses that have applied to the future growth loan scheme which opened in March 2019; the number of farmers and businesses sanctioned financing to date; and the value of same, in tabular form. [36822/19]

View answer

Written answers (Question to Agriculture)

The Future Growth Loan Scheme has been open for loan eligibility applications through the Strategic Banking Corporation of Ireland's (SBCI) website since 17th April. The Scheme was developed by my Department and the Department of Business, Enterprise, and Innovation, in partnership with the Department of Finance, the SBCI and the European Investment Fund (EIF).

It will be delivered through participating finance providers and make up to €300 million of investment loans available to eligible Irish businesses, including farmers and the agri-food & seafood sectors. The loans will be competitively priced with an initial maximum loan interest rate of 4.5% for loans less than €250,000. The loans are for terms of 8-10 years and unsecured up to €500,000. This type of innovative finance, which has been previously unavailable in the Irish market, will support strategic long-term investment in a post-Brexit environment.

A minimum loan amount of €100,000 applies up to a maximum of €3,000,000 per applicant. However, considering the needs of Irish farmers, a minimum of €50,000 was negotiated specifically for them. This is a long-awaited source of finance for young and new entrant farmers, especially the cohort who do not have high levels of security. It will also serve smaller-scale farmers, who often do not have the leverage to negotiate for more favourable terms with their banking institution. Food companies have identified long term investment finance of up to ten years as a critical need which is currently unavailable in Ireland. The effects of this innovative product will be felt all along the food production chain, from primary producer to processor.

There is a two-step application process. An eligibility application to the SBCI, which confirms the applicant is eligible for the unsecured finance as per the terms of the Scheme, and a loan application to the participating bank. At close of business on 30th of August 2019, SBCI had approved 987 eligibility applications. A breakdown of those progressed to sanction at bank level is as follows:

-

No.

Value

Total number of loans sanctioned at bank level

168

€27.4m

Loans sanctioned to Farmers

105

€12.1m

Loans to sanctioned to food businesses

12

€3.8m