Bank loan break to ease disease effect
BARCLAYS has announced a "loan break" for its 20,000 farmer customers to help reduce cash flow problems caused by foot-and-mouth precautions.
Farmers can defer repayments for up to three months, says Barclays Agricultural Banking managing director Grant Phillips. "The scheme is available to all our customers, not just livestock producers, to ease pressure on short-term cash flow which may have been impacted by the foot-and-mouth outbreak.
"If they wish, farmers can then choose to extend the loan for three months to make up for the break." However, the agreed rate of interest will still accrue on the loan during the period.
HSBCs head of agriculture, Steve Ellwood, says the bank will be treating each customer individually. "We will be pleased to talk about loan breaks, but they are not the only or necessarily the best way to ease short-term cash flow problems."
Many farmers do not have any borrowings so an overdraft facility could be one possible solution, he adds. Other banks are taking a similar line and plan to tackle farmers problems on a case by case basis.
Another lifeline for beleaguered rural businesses has been suggested by the Royal Institution of Chartered Surveyors. It believes local authorities should use discretionary powers which allow for rates relief to businesses suffering hardship.
Rates demands will be due at the beginning of April and the organisations Ray Borrowdale says many rural businesses, including abattoirs and auction markets not covered by existing compensation payments, would benefit from such an exemption.
Although farming businesses are not liable for business rates, many farmers have diversified into non-agricultural enterprises which could also be helped, he adds.
The RICS estimates a 100% exemption for abattoirs and marts would cost the government £9m. *