****

In **Times of uncertainty, access to financial advice is essential for Irish farmers. However, securing funding has become increasingly difficult due to a combination of factors. At FDC Group, we’re here to help you navigate the regulation and risk to create a resilient future. **A downturn in lenders**

The number of lenders supporting farms in Ireland has significantly reduced over the past decade due to a combination of market exits, consolidation, and regulatory changes following the financial crisis and subsequent restructuring of the Irish banking system. * Market exits: Foreign-owned institutions such as Ulster Bank, KBC, Danske Bank, and Rabobank have exited the Irish market. * Consolidation: The remaining banks have consolidated their operations, reducing competition. * Regulatory changes: The Central Bank of Ireland and the European Central Bank have implemented stricter regulations, making the Irish market less attractive for foreign banks and new entrants. The exit of foreign-owned institutions has left AIB, Bank of Ireland, and Permanent TSB as the dominant players in supporting Irish farming, particularly in the provision of long-term borrowing requirements. However, this reduced competition has made accessing borrowing more difficult, leading to higher interest rates compared to the Eurozone average. **Alternative lenders**

Despite the reduced competition, there has been an increase in alternative lenders to Irish farms, including:

* **Government & EU-Supported Schemes:**

* SBCI (Strategic Banking Corporation of Ireland) Microfinance Ireland

* Credit Unions: Many credit unions across Ireland offer agricultural loans, with “Cultivate” being a loan product specifically designed for farmers. * **Asset Finance & Leasing Companies:** Used to finance equipment, machinery, or vehicles. * **Private & Non-Bank Lenders:**

* Finance Ireland Agri offers HP and leasing for agricultural machinery and Milk Flex for Dairy Farmers

* Online lending platforms that connect investors directly with borrowers, such as Linked Finance, Flender, and Rebuild Capital

**Loan Application Process**

The loan application landscape for Irish farmers has evolved significantly over the past decade. The process typically starts with a smaller loan being processed through an online processing center, while larger farm loan applications (typically over €500,000) are assessed through a dedicated account manager with the assistance of the bank’s specialist agri advisors. * **Key Underwriting Criteria:**

* A detailed position statement for the farm

* Personal details of the applicants

* Banking history

* Loan structure (personal borrowing or to a Limited Company)

* Current stock, current infrastructure, current labour, and current off-farm income

* A detailed business plan outlining the loan’s purpose, expected outcomes, and associated financial projections

* Explain how the loan funds will be applied

* Confirmation of any necessary planning permissions

* Financial documentation:

* Last three years’ accounts

* Current account and loan statements (usually the last 12 months)

* Tax clearance certificates

* Notice of Assessment or Form 11 for the last 2 years

* Repayment Capacity: Measures surplus cash available to cover debt obligations using a stressed interest rate

* Equity Contribution: Farmers are required to contribute 15–30% of the total investment (cash or existing assets)

* Security and Collateral: For larger loans, lenders may require security interests in land, buildings, personal guarantees, and loan duration aligns with the asset’s useful life

**New risks being assessed**

Banks and providers of finance now need to comprehensively assess how regulation and compliance factors will influence the future repayment capacity of a farming enterprise. Key areas requiring assessment or comment include:

* **EU Common Agricultural Policy (CAP) Reforms:** Eco-schemes

* **Climate Action Plan:** Greenhouse gas reduction and improved slurry management

* **Sustainability Credentials:** (ESG Standards, Carbon Footprinting and Emissions Reporting)

* **Access to Green Finance:** Land use and biodiversity

* **Reputational Risk:** Lenders may avoid farms with a history of pollution, animal welfare issues, or poor environmental compliance

With the changes in the market and lending process, access to finance remains a problematic issue for Irish farmers. The lack of banking competition has contributed to Irish farmers paying higher interest rates compared to European counterparts. To overcome these challenges, farmers often require the assistance of specialist financial advisors, particularly with larger propositions. We can help you at FDC Group. Contact us today. **FDC Financial Services** is regulated by the **Central Bank of Ireland**.

Navigating the Funding Landscape

The number of lenders supporting Irish farms has reduced significantly over the past decade. The exit of foreign-owned institutions, such as Ulster Bank, KBC, and Danske Bank, has left AIB, Bank of Ireland, and Permanent TSB as the dominant players in providing long-term borrowing requirements. However, the reduced competition has made accessing borrowing more difficult, leading to higher interest rates compared to the Eurozone average. Despite the reduced competition, there has been an increase in alternative lenders to Irish farms. Government and EU-supported schemes, asset finance and leasing companies, and private and non-bank lenders offer various options for farmers. The loan application process has evolved, and farmers now need to meet stricter underwriting criteria. The process typically starts with a smaller loan being processed through an online processing center, while larger farm loan applications are assessed through a dedicated account manager with the assistance of the bank’s specialist agri advisors. The key underwriting criteria for farm lending include a detailed position statement for the farm, personal details of the applicants, banking history, loan structure, and current stock, infrastructure, and off-farm income. A detailed business plan outlining the loan’s purpose, expected outcomes, and associated financial projections is also required. The loan funds will be applied in a specific manner, and confirmation of necessary planning permissions is necessary. Financial documentation, such as last three years’ accounts and current account and loan statements, is also required. The loan application process is lengthy, and farmers need to meet various requirements, including repayment capacity and equity contribution. Lenders may require security interests in land, buildings, personal guarantees, and loan duration aligns with the asset’s useful life. As a result, access to finance remains a challenging issue for Irish farmers, and banks and providers of finance need to assess new risks, such as regulation and compliance factors, and how they will influence the future repayment capacity of a farming enterprise. Examples of notable options for Irish farmers include:

* Government and EU-supported schemes, such as the SBCI Microfinance Ireland

* Credit unions, such as Cultivate

* Asset finance and leasing companies, such as those that finance equipment, machinery, or vehicles

* Private and non-bank lenders, such as Finance Ireland Agri and online lending platforms that connect investors directly with borrowers. In conclusion, securing funding for Irish farmers has become increasingly difficult due to the reduced competition in the lending market. Farmers now need to navigate a lengthy and complex loan application process, which involves meeting stricter underwriting criteria and providing various forms of documentation. To overcome these challenges, farmers often require the assistance of specialist financial advisors, particularly with larger propositions. We can help you at FDC Group. Contact us today. FDC Financial Services is regulated by the Central Bank of Ireland.