Dairy investment eligible for Lloyds TSB loan discount

Dairy farmers investing in facilities for NVZ compliance or new milking equipment could get a discount of up to 0.8% on loan interest rates from Lloyds TSB Agriculture, but only for a limited period.

"Lloyds TSB Agriculture has access to funds from the European Investment Bank which are available to encourage investment in small and medium sized enterprises (SMEs) including agriculture," says Gareth Oakley, Agriculture Director at Lloyds TSB.

"We are expecting a lot of interest in the discounted rates from dairy farmers who need to upgrade slurry systems to meet Nitrate Vulnerable Zone requirements or who are expanding production.

"The saving could be worth around £10,000 on a 10 year loan of £250,000, but funds are limited so we are urging farmers to act quickly if they want access to take advantage of the discount."

A wide range of investments are eligible to be considered for the funding including buildings, some equipment and machinery. Minimum loan amounts are £25,500 with the maximum at £11 million. No project should cost more than €25 million, including funding from other sources. Loans of between two and 10 years may be eligible for a 0.8% discount, whilst if the project requires funding over a longer term (up to 25 years) the discount may still be available in the slightly lower level of 0.6%. Loans can be on a fixed or variable term basis.

"Many farmers are in a position where ensuring they are compliant with the new rules - or investing in production - could be important considerations if they are to continue dairying in the future," adds Gareth Oakley. "The discount allied to continued low interest rates could offer a means of investing in necessary improvements cost effectively.