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Suite of AIB Cash Flow Options to Meet your Business Needs
If you are currently experiencing, or expect to experience farm cash flow pressure, AIB have a number of options available to support your business. Every case is different and will be looked at on an individual basis. In most instances there will be no single solution, rather a combination of options will be available to support customers.
1) Increase in working capital facilities.
In many cases this is the most appropriate starting point where additional cash flow support is required as it provides an immediate cash injection to the farm business to meet increased costs and expenditure. It can take the form of an increased overdraft or other similar 12-month loan facilities. Working capital facilities typically will need to meet 30 days credit in any 12-month period.
2) Replenish spend from cash flow.
Where receipts are available for farm investments funded from cash flow during 2017, this can be refinanced over a more appropriate period, with the loan used to fill the expected cash deficit in 2018. The same applies for those who increased their breeding stock herds organically.
3) Spread tax liability over a longer term.
2017 was good income year for some sectors which will result in an increased tax liability falling due this October. AIB offers short term facilities which can be used to pay tax liabilities and other fees such as accountancy fees over the following 11 months period.
4) Defer capital repayments.
In some cases people seek interest-only to help with a cash flow difficulties. In some cases it is a good solution, however in other instances, as per example below, it does not offer the same benefits as some of the other options.
Example: A farmer has loan repayments of €20,000/year including capital and interest with seasonal repayments between May and October. If the farmer applies to commence interest only from September the farmer will not receive any cash flow benefit between November and April, a key cash flow period on most farms.
Talk to us today - in branch; online: www.aib.ie/farming; or at 1890 47 88 33 to discuss the most appropriate solution for your individual needs.
Please be aware that all of the views expressed in this Blog are purely the personal views of the authors and commentators (including those working for AIB as members of the AIB website team or in any other capacity) and are based on their personal experiences and knowledge at the time of writing.
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