Low-cost Loan Schemes Must Be Rolled out Urgently

IFA Farm Business Chair Rose Mary McDonagh has called on the Government to roll out the new Future Growth Loan Scheme (FGLS) and the Covid Credit Guarantee Scheme (CCGS).

“Farmers need immediate access to flexible, low-interest credit. The Government needs to finalise the terms and conditions of these schemes and make them available to applicants,” she said.

The FGLS is guaranteed by the European Union and is intended for long-term investment purposes within SMEs.

On the other hand, the CCGS is aimed at SMEs that have been negatively impacted by COVID-19 and requires legislation from the Irish Government, which will guarantee 80% of the loans under the scheme.

“While these schemes are not ideal in that neither the FGLS nor CCGS allow for refinancing of projects paid for using cashflow, they will be an option for some farmers. Moreover, farmers are increasingly faced with the challenge of rising working capital needs as a consequence of COVID-19,” she said.

The payment break on loans has temporarily alleviated the pressure on farmers. However, it’s expected that more farmers across all sectors will need access to low-cost credit in the weeks and months to come. Regrettably, the details surrounding the latest version of FGLS and the CCGS continue to be developed and change constantly.

“Enough talking has been done about these schemes and we’re no closer to launching. It’s time for the Government to swiftly clarify the small print and promptly make the funds available,” concluded McDonagh.