Overview MilkFlex

MilkFlex Overview

Exclusive to Irish dairy farmers

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MilkFlex is an award winning loan product designed to provide dairy milk suppliers in the Republic of Ireland with an innovative loan product that helps protect farm incomes from the impact of dairy market volatility, seasonality and disease outbreak.

Following an announcement from the Minister of Agriculture on 8th May 2018, Finance Ireland Agri has launched MilkFlex as a national product, available through participating Co-ops.

The key feature of MilkFlex is that it has inbuilt ‘flex triggers’ that can adjust loan repayments in line with movements in milk price, thereby providing farmers with cash flow relief when most needed.

MilkFlex is designed to help dairy farmers increase efficient dairy production and can be used for a wide variety of purposes.

Purpose of the loan

  • Investment in productive dairy farm assets
  • Farm infrastructure (milking parlours, animal housing, farm roadways, etc.)
  • Dairy livestock purchases
  • Any work related to environmental schemes, low emissions slurry equipment (TAMS funded and non-TAMS funded) etc.
  • Grassland or land improvement, including reseeding and drainage works
  • Technological improvements, e.g. milking robots, monitoring equipment etc.
  • Refinancing of any loan, cash or cashflow used in / on dairy farm projects, which commenced on or after 1st March 2014
  • Working capital for dairy farming

Loan information booklet

Want to know more about MilkFlex?

Learn about the key features of a MilkFlex loan and the application process in this useful information booklet. Read our FAQs for more.

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So where do you start?

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Speak to our specialist team on:

(01) 647 0255

Or request a callback

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The Loan Application Process

1

Suitability Assessment

Before a farm visit can be conducted, the following is required to ensure meaningful engagement on the day of the visit and also the suitability of MilkFlex for your business:

  1. Loan Amount & Purpose details
  2. An Irish Credit Bureau/Central Credit Register check
  3. Contact with your accountant to provide financial information
  4. Obtain the most recent 3 years milk production data from your participating dairy Co-op

Note: A New Entrant to dairying will be required to hold a Green Cert or equivalent qualification.

You may contact Finance Ireland directly by phone, through a dedicated point of contact within your local Co-op, or by visiting the Finance Ireland Website on www.financeireland.ie.

On receipt of contact, we will provide you with our Privacy Notice outlining how your personal data will be processed.

2

Farm Visit Conducted

Following the receipt of your initial data, Finance Ireland will contact you to arrange a mutually beneficial time to meet. At the farm visit, the Agri Business Manager (ABM) will review all aspects of the farm enterprise. The ABM will ask the applicant to provide the following information at the farm visit:

  1. Application form (this will be completed in conjunction with the ABM)
  2. Most recent 12 months bank statements
  3. Farm insurance details
  4. Identification (copy of current passport or drivers licence for all applicants)
  5. Proof of address (copy of recent utility bill dated within the previous 6 months)

Once all the above information has been provided the ABM will write a comprehensive farm credit report, make a recommendation to our dedicated Agri Credit Team and revert with a decision within agreed timeframes.

3

Accept loan offer and loan drawdown procedure

Once approved, the successful applicant will receive a formal MilkFlex loan agreement. Where the applicant accepts the loan agreement they will be asked to provide the following as part of the loan drawdown process:

  1. A signed Milk Supply Agreement (MSA) between the participating Co-op and the applicant. The minimum term of this MSA will be 8 years but may increase to 10 years, to match the loan term, if the flex trigger events are exercised during the term of the loan.
  2. A signed Payment Instruction Letter authorising the participating Co-op to deduct loan repayments from milk receipts.
  3. In the case of limited companies, a signed letter of guarantee will need to be provided.

FIA will issue the loan directly to the applicant’s nominated bank account. Generally, the whole process, from initial contact to loan drawdown can be completed in less than 1 month. However, this timeframe is dependent on the information requested being provided by the applicant in a timely manner.

Key features of a MilkFlex loan Expand

  • Seasonality of Loan Repayments

    Loan repayments are automatically deducted from the milk receipts by the participating Co-op. No repayments are made from December to March. 10% of the annual repayment is made in each of the months of April, May, October, and November and 15% of the annual repayment is made in each of the peak milk production months of June, July, August and September.

  • Security

    No asset-based security is required (personal guarantees are required if lending to a limited company). Priority deduction will be from milk payments. A Milk Supply Agreement (MSA) is required for the duration of the loan.

  • Loan Approval Criteria

    The farm must be a viable business and certain credit underwriting criteria apply. An important point to note is that your Co-op is not involved in credit process and all information provided to Finance Ireland is fully confidential.

  • Flex Triggers

    Facilitates the reduction of principal and interest repayments by 50% for a 6 month period if the milk price is 28cpl including VAT or below for 3 consecutive months

    Facilitates the reduction of principal and interest repayments by 100% for a 6 month period if the milk price is 26cpl including VAT or below for 3 consecutive months

    Features repayments that are accelerated by 25% for a 6 month period when milk price is 34cpl including VAT or above for 3 consecutive months

  • Refinancing

    MilkFlex is available to refinance existing loans, credit and cash related to dairy activities. Usage confined to loans/projects commenced since March 2014.

  • New Entrants

    An amount is set aside within MilkFlex for New Entrants. A New Entrant is defined as someone in dairying for less than 36 months, has been in milk production supplying the Co-op for a minimum of 12 months at the time of the MilkFlex loan application. New Entrants can apply for loans of up to €300,000, subject to loan to value (all debt/ all assets) criteria. They must provide a 5-year business plan for their farm and also hold a Green Certificate of equivalent.

  • Loan Usage

    Any investment in productive on-farm dairy assets, including; Livestock purchases; Farm infrastructure (milking parlours, animal housing, farm roadways etc.); Grassland improvement – including re-seeding and drainage works; All environmental controls/enhancements, equipment, facilities and land improvement. Land purchase excluded. Funding can be sought for projects, which commenced on or after 1st March 2014.

  • Loan Amount and Term

    Loans are available for amounts of between €25,000 and €300,000 for a term of 8 years (can go to 10 years if flex triggers are used).

  • Interest Rate

    The interest rate charged on the MilkFlex loan is currently a variable rate of 3.75% above the monthly Euribor cost of funds with a Euribor floor of zero. There is also an arrangement fee of 1.25%. APR is 4.18%.

Some of our latest deals Expand

Examples of deals we have completed and drawn down:

Location: Kilkenny

Dairy herd size (est): 190

Asset financed and/or purpose of MilkFlex loan:
Slatted tank and site works, erection of shed, fittings and fixtures and purchase of stock.

Cost of Asset and/or total project spend: €200k

Amount of MilkFlex loan borrowed: €200k

Date Application Received: June 2016

Date of Drawdown: July 2016

Total Time taken from Application Received to Drawdown: 7 Weeks

Location: Laois

Dairy herd size (est): 70

Asset financed and/or purpose of MilkFlex loan:
Clear merchant debt, refinance cash flow, purchase 20 heifers, works on parlour, slurry storage.

Cost of Asset and/or total project spend: €75k

Amount of MilkFlex loan borrowed: €75k

Date Application Received: Jul 2017

Date of Drawdown: Aug 2017

Total Time taken from Application Received to Drawdown: 4 Weeks

Location: Waterford

Dairy herd size (est): 90

Asset financed and/or purpose of MilkFlex loan:
Purchase of dairy stock.

Cost of Asset and/or total project spend: €120k

Amount of MilkFlex loan borrowed: €120k

Date Application Received: Jan 2017

Date of Drawdown: Feb 2017

Total Time taken from Application Received to Drawdown: 6 Weeks

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