“The Cultivate loan made life much easier” – how Credit Unions’ innovative farming loan is helping farmers
Although many industries are on hold as a result of the pandemic, farming life never stands still and farmers across Ireland have been working away despite the disruption caused by Covid-19.
It’s a difficult time for everyone but farmers are constantly looking to improve their farms or to find new ways to adapt to the changing business landscape. The Cultivate farm loan from participating Credit Unions offers farmers unsecured loans of up to €50,000 that can be paid back over a period of up to seven years.
Operated by 26 Credit Unions, the Cultivate farm loan provides short to medium-term finance that is specifically designed to meet the needs of farmers. To find out more, we spoke to Finbarr O’Shea, Chair of the Cultivate Marketing Group and Manager of Bantry Credit Union.
What are the advantages of Cultivate loans for farmers?
Credit Unions have long been an established feature of communities throughout Ireland and that friendly, local service sets them apart from larger financial institutions. Finbarr says that farmers can now enjoy that same service when they want to secure agri-finance.
“You’re dealing with one person, whether it’s on the phone or in the office,” he explains.
“That person is from the locality. They talk your talk. You probably know them and if you don’t know them, you know their father or mother! Immediately, you’re just talking to somebody. You’re not being interviewed. You’re not being assessed. You’re talking to someone.”
Farmers can call into their local Credit Union, have face-to-face interactions, or give them a call and talk directly with a local person if they have a query. It’s a personal, community-based service.
“Also, from that farmer’s point of view, the decision is made locally. The decision is made in Bantry for a Bantry farmer. It’s made in Mullingar for a Mullingar farmer. It’s being made in Gort for a Gort farmer. That’s the key advantage and the key differentiator.”
With all Credit Unions insured for life insurance purposes at no charge to the borrower, that can also provide peace of mind for farmers.
Another benefit is the flexibility around repayments and the option to fix your repayments to suit your own circumstances.
“The Credit Union brings tremendous flexibility,” adds Finbarr. “So say a farmer takes a €30,000 stocking loan. There’s a payment structure underlying it but the farmer has total flexibility around how fast he wants to pay it off. As long as he meets his minimum repayment, he can do it as slow or as fast as he likes.”
A different kind of farming finance
With Cultivate, the farmer is a borrower but they are also a member of the Credit Union, so the Credit Union has their best interests at heart.
“Credit Unions are co-ops. My duty as the manager of a financial co-op is to do the right thing by our members, by the members of Bantry Credit Union. That’s the philosophy.
“My job is to do the right thing for the farmer. Therefore, if he needs finance, we make it available. If he has surplus cash and he can make extra payments to bring down the loan and as a result reduce his interest costs, then I’m going to encourage him to do that. That is who we are.”
In 2019, the average Cultivate loan amount was €23,554 over a five and a half year period, with stocking and working capital the most popular reason for borrowing among members.
“The market we’re in is unsecured loans up to €50,000 so it covers a whole range of purposes, such as farm improvement works, farm buildings, stocking loans, machinery, tractors. Whether you’re in beef, dairy or sheep you can do a lot with €50,000.”
Helping farmers make a real difference
Paul Crowe is a beef farmer in Kilrush, Co Clare, who needed to improve his calving facilities. His original set-up wasn’t fit for purpose and he was wasting a lot of time on herd management in Spring so he took out a Cultivate loan to build a shed extension for calving.
He called into his local Credit Union and was able to obtain the funding he needed and to arrange a repayment structure that worked for him.
“The Cultivate loan is a loan for farmers provided by people who understand farming,” says Paul. “Life is much easier on the farm now since I got my loan.”
John Finucane from Askeaton, Co Limerick, has a 250-acre dairy farm and is currently milking 135 cows. He wanted to install a new bulk tank to take the extra milk from his increased herd size and to extend the cubicle shed for the additional capacity.
When he applied for a Cultivate loan, he found the whole process to be a lot easier than he expected.
“I found working with Cultivate very easy,” John says. “No stress involved in it whatsoever”
Another benefit for him was the flexibility around repayments, allowing him to get the finance he needed and to pay the loan back when it suited him.
“The Cultivate loan has made life much easier,” John added.
Normal life may be on hold, but farming life continues.
Like farmers, Credit Unions are here for the long haul.