How AgriFlex works…
Two years ago, John borrowed €200,000 over 12 years to fund a new milking parlour and to upgrade farm roadways.
Monthly repayments were agreed at €1,850 and currently, all repayments are up to date, at a variable interest rate of 5%.
On average, the milk price for the last three years was €0.34 /litre. In this scenario the milk price falls by 25% to an average of €0.26 / litre for a 6 month period, resulting in a €16,600 decrease in income for John.
With AgriFlex, John can be approved to convert his monthly repayments to interest only for a period of six months, reducing repayments from €1,850 to €727 per month, a reduction of €6,738 over the 6 months.
By the end of the 6 month AgriFlex period, milk price has increased to €0.30 / litre and in line with John’s increased cashflow, his repayments (capital and interest) recommence at €1,850 per month with the loan period extended by 6 months.
By using AgriFlex, John was able to reduce his monthly loan repayments by €1,123 for six months, a total reduction of €6,738. This flexibility allows John to conserve his farm cash flow during a time of unexpectedly low milk prices.
AgriFlex can be applied for in a number of scenarios. For further details please contact your local branch or Agri Development Manager.
Please note that the overall cost of credit and loan repayment term will increase by €4,362 and 6 months respectively as a result of John availing of this option.
Talk to Bank of Ireland, Ireland’s Enterprise Bank today about taking your farm business to the next level.
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