Farmers urged to tackle vulture funds
WITH so-called ‘vulture funds’ seemingly becoming more and more prominent, farmers whose loans have been sold to such funds are being given the option to move them to high street/ pillar banks, while keeping their existing low rate of interest. The Irish Farms Accounts Co-operative are keen to publicise the way out of vulture funds for farmers.
Ashling Kavangh, Head of the Enniscorthy IFAC Office, says that negative connotations can often be associated with loans that are sold to vulture funds, when often it has nothing at all to do with the borrower and can simply be a matter of their lender leaving the Irish market or reducing their loan books.
While, she says, things in theory should continue as normal, problems can arise down the line after a vulture fund takes over the loan. ‘Problems arise with these loans if the farmer wishes to restructure, refinance or use the security on another loan,’ she said. ‘In order to make any changes to these loans the farmer will have to refinance with a high street/pillar bank, which unfortunately may result in a higher interest rate.’
However, Ashling says that recently high street/pillar banks have been offering a way out for farmers.
‘ They are willing to refinance the debt at the same terms and conditions as the original loan. This will give the farmer more options into the future if they wish to restructure, refinance or use the security on another loan. In addition the farmer will have the certainty of dealing with a bank that’s on the high street and regulated by the Central Bank of Ireland.’
IFAC are encouraging local farmers to move loans while the opportunity is available and say goodbye to vulture funds for good.