We understand that financial ups and downs are part and parcel of farming today.

The new AgriFlex features we have introduced to our farm loan products include the potential to avail of interest-only repayment periods in these situations and to accelerate repayments during times of surplus farm cash flow.

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Case Study:

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 €16,6001 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.

In Summary

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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1 The 12 month milk production cycle assumed in this example will vary from case to case depending on seasonality of production.

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