I guess no one doubts that running your own farm is not an easy task. Fewer and fewer young people decide to take up this challenge, which is why the state often tries to encourage them to do so. One of the ways is to prepare special offers for them regarding subsidies to loans taken to establish or develop their agricultural activity. Such loans with partial repayment of capital are becoming more and more popular among persons engaged in agriculture.
What is a loan with partial repayment of capital?
The Agency for Restructuring and Modernization of Agriculture annually announces the possibility of applying for the so-called preferential loans. As part of them, ARiMR declares repayment for the farmer of part of the capital of the loan taken by him. Of course, the Agency also specifies what may be the purpose of such obligations and what conditions must be met in order for the application for such a loan to be considered positively. It is then necessary to fulfill all types of formalities that are required both by the Agency itself and by the bank granting loans to the farmer.
Therefore, all farmers who run production departments specified by the SERNA in due time can benefit from this type of loan. Also the investments themselves, or rather their types, which can be covered by such financial support, must guarantee the achievement of the objectives set by the Agency. Usually, farmers can also count on a rather preferential interest rate on loans and a low commission. Of course, the farmer must also have his own funds, the share of which can be set at different levels. Each time SERNA sets a percentage of the amount of capital to which he can support the farmer, as well as his maximum amount.
Moreover, as a rule, the surcharge is divided into two tranches. The first of them and also the larger installment (it can be up to 80% of the total amount) is transferred to the loan after the investment is completed. The second installment, however, goes to the farmer at the end of his repayment period so that the debt can be finally settled. The loan period for this type of liabilities is usually set at a minimum of 5 years.
Loan with partial repayment of capital – purpose
As already mentioned, a loan with an additional payment from the Agency for Restructuring and Modernization of Agriculture can be used for various purposes. It all depends on which of them the Agency considers the most important in a given year. This type of financial support can even be intended for the construction, reconstruction or renovation of real estate necessary to run a farm, but also for the purchase of all types of equipment or machines and devices that a farmer needs to properly perform his work. Money from a loan with partial repayment of capital can often also be used to buy farmland or buildings or structures.
In many cases, the agency allows farmers to finance the establishment or equipment of orchards and perennial plantations, as well as pastures or enclosures for animals. With money from the bank, you can also ensure that the farm has access to running water. It can be about building water intakes, extending the installation or buying equipment that treats water. In addition, the Agency also supports projects aimed at improving the farm in terms of making it more environmentally friendly and allowing animals to have better living conditions.
Quite important for many farmers is also the fact that very often the purpose of the loan with partial repayment of capital by SERNA also includes investment in significant modernization of the farm. It is especially about the purchase of computers and software that can greatly facilitate farm management and agricultural activities in general. They can also be accounting programs that are very useful for farmers. Part of the loan can also be used to cover the costs associated with the preparation and implementation of investments, such as the creation of technical documentation, construction supervision or fees for all licenses.
Loan with ASDER surcharge – is it worth it?
Probably no farmer has any doubts that a loan with partial repayment of capital is a very attractive offer. There is a reason why every time the Agency for Restructuring and Modernization of Agriculture announces the possibility of applying for such financial support, people running agricultural activity so willingly fill in applications for this type of loan.
It is an ideal solution when we plan to carry out investments on our farm. First of all, we can count on repayment of part of the liability by the Agency, and secondly we get very preferential credit conditions. Of course, a lot depends in this case on the offer of the bank itself, but now almost every one of them is preparing an offer for farmers, thanks to which we can freely choose them.