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03 Jul 2022

MilkFlex - An Award Winning Loan for Dairy Farmers

MilkFlex - An Award Winning Loan for Dairy Farmers

MilkFlex - An Award Winning Loan for Dairy Farmers

What is MilkFlex?

MilkFlex is an award-winning competitively priced term loan of 8 to 10 years exclusively for dairy farmers and only available from Finance Ireland. It is designed to help protect farm incomes from the impact of dairy market volatility, seasonality, and the impact of any disease outbreak. 

The minimum loan amount is €25,000 and the maximum is €300,000. The variable interest rate is 3.75% (after setup costs are included the Annual Percentage Rate is 4.18%) which is very competitive, particularly for a long-term loan of eight to ten years. 

Unlike traditional lending, no asset-based security is required. A personal guarantee is needed if the borrower is a limited company.

MilkFlex is proving to be a real alternative for dairy farmers, particularly with the exit of KBC and Ulster from the Irish market and the closure of bank branches in key Agri. locations.

How is MilkFlex progressing?

Since its launch in 2016, approximately €250M in MilkFlex loans to nearly 2,500 Irish dairy farmers have been issued. Over 4,250 farm visits have been carried out, and 18 co-ops are participating. 

How does a MilkFlex loan work?

Repayments are automatically deducted from the supplier’s milk receipts by their participating co-op. 

The profile of repayments reflects the seasonal milk supply curve, with no loan repayments – interest or principal – during the low milk production months from December to March inclusive.

Loan repayments reduce by 50% for six months when the milk price has fallen below 28c/litre for three consecutive months and are suspended for six months when the milk price falls below 26c/l. Repayments will accelerate if the milk price rises to 34c/l or higher. 

No surcharge interest is applied during these flex events.

What can MilkFlex be used for?

Loans can be used for 100% of the cost of any investment in productive on farm dairy assets, including:

  • Farm infrastructure (milking parlours, animal housing, farm roadways, etc)
  • Land improvement, reclamation, drainage, re-seeding
  • Agri technologies including robotics and monitoring equipment
  • Farm machinery, bulk tanks
  • Working capital 
  • Dairy herd expansion (size and quality)
  • Refinancing existing debt relating to works carried out on the farm from 2014 onwards, and the restructuring of merchant debt

Availing of a MilkFlex loan will not affect your ability to apply for TAMS. Note loans cannot be used to buy land.

Is MilkFlex available for sustainability expenditure?

Yes, this is an important and popular feature. Up to 100% funding is available for a wide range of expenditure related to sustainability including additional slurry/water storage, solar panels, low emission slurry spreading equipment, energy efficient heating and cooling systems, etc.

How do I apply for a MilkFlex loan?

Any dairy farmer who has a milk supply agreement and whose co-op is participating in MilkFlex can apply. 

Simply call Finance Ireland Agri at 01 6470255. Application details will be taken over the phone and consent will be requested to carry out credit checks and to contact the co-op for milk data. 

Once the initial screening is completed, the name of the Agri-Business Manager who will visit the farm and take the application through credit assessment and to loan approval will be advised.

Loan drawdown is straightforward. Once documentation is returned and all loan conditions are satisfied the funds are paid directly to the farmer’s bank account.

See financeireland.ie/milkflex for more information or Call: 01 6470255 at any time

PIC: Conor Boyle, Managing Director, Finance Ireland Agri.

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