Farmers make most of cheaper loan scheme

Farmers are apparently making good use of reduced loan rates provided via the European Investment Bank, cutting interest rates by up to 0.8%.

The EIB’s discounted lending offer slashes eligible loan rates by 0.8% for two to 10-year loans, or by 0.6% for 11 to 25-year agreements. “It is proving very popular, as most agricultural projects are eligible,” said Bob Steventon, south-west agriculture manager for Lloyds TSB.

Speaking at a business conference organised by Clarke Wilmott in Taunton last week, he said agriculture remained a very attractive sector to lend to. “It has a very positive outlook, in contrast to property and commercial sectors at the moment.”

However, funding costs had soared, with borrowing now costing banks at least 3.4%. This meant lending discounts were extremely attractive, benefiting farmers seeking to build barns or purchase livestock and machinery, for example. However, land purchase, refinancing and working capital loans were not eligible, he added.