Farmers thinking of expanding their business should act quickly to take advantage of discounted farm lending rates.

The Agricultural Mortgage Corporation (AMC) has accessed multi-million pound funding from the European Investment Bank designed to promote growth and encourage jobs in small businesses.

The money effectively subsidises eligible loans, discounting 0.65% off a normal loan margin for business improvement and diversification projects, such as building work, machinery and equipment purchases, farm shops or farm energy projects.

The minimum amount borrowers can apply for in the scheme is £25,500 and the loans must be completed by December 2013. The discount is available on loans of up to 10 years for projects that have a definite start and end date.

“This scheme provides an opportunity for farmers who are considering expanding or investing in improving farm efficiency to access favourable loan rates at a time when interest rates are already historically low,” said AMC agent Alistair Cochrane from Strutt & Parker.

“I see it as an important tool to help reduce the effects of price fluctuations and input cost volatility and mitigate the likely reduction in single payment income.”

Farmers with a particular project in mind should contact their local AMC agent.