Considerations when providing finance to farmers
Farming has evolved rapidly in recent years and the rate of change in the sector is set to accelerate over the next decade. From Genomic evaluation of beef and dairy stock, to grass budgeting and the use of technology to measure and record output performance, farm management practices have become much more scientific and technical as a means to improving efficiency and bottom line profitability. These advancements are welcomed and are challenging farmers to constantly review and evaluate how they run their business prior to making any investment decisions.
In order to develop and grow a farming business, most farmers will turn to their bank to support them by way of term, seasonal, hire purchase, lease or overdraft funding. At Bank of Ireland, we can proudly say that we consistently provide more than 50% of all new lending to the sector. We believe that we understand farming and have the infrastructure and branch network in place to support our customers in Co. Sligo and throughout the country.
In order to progress a successful application for funding with Bank of Ireland, there are a number of standard information requests that we will require:
1. A completed loan application form is the starting point for most agricultural lending proposals. There is now a standardised agricultural lending application form which is similar to the form used by the main banks in Ireland. In addition to asking for details about the lending being sought, this form also captures the important farm information ( stock numbers, land details, direct payments, etc.) and additional family and financial information ( existing loans, savings, investments, available off farm income, etc.). You’ll get an application form in your local bank branch or www. bankofireland. com
2. Most recent 3 Years Farm accounts. Not all farmers will have multiple years’ farm accounts available, e. g. a young farmer starting out is unlikely to have their own accounts. In instances like this, industry average gross margins are used ( often in conjunction with projections supplied by the customer) to estimate the future income earning ability of the farm.
3. Confirmation of direct farm payments and any off farm income receivable.
4. Most recent 6 months Co- Op statement ( Dairy Only)
5. Most recent 3 Years ICBF Herd Performance Report ( Dairy Only)
6. 6 months bank current account statements and 12 months bank loan account statements ( new customers only)
7. In circumstances where you are looking to make significant changes to the farm ( i. e. significantly increase beef production or possibly convert to another enterprise e. g. poultry or dairying) we will ask that you document your plans with a farm business plan incorporating projected future cash- flow. It is important that projections are realistic and sustainable.
We would welcome the opportunity to talk to you and visit your farm. Please contact Tara @ 0862853832 to arrange a time that suits.