During installation, young farmers, in addition to the young farmer’s allowance, can also benefit from special medium-term loans (MTS) which are subject to conditions. The amounts of these loans will vary depending on the geographic zone but they are all made at very favourable interest rates.
The State subsidises interest rates in order to reduce the financial costs to farmers of loans for certain areas which they wish to promote. The “subsidised” loans have lower interest rates than market loans as the State pays some of the interest in the form of a subsidy.
All loan applications will be examined and then a decision will be taken by the Prefect. The eligibility criteria is similar to that used in awarding young farmer’s allowances (DJA) (following a PPP, keeping of accounts, compliance with the minimum revenue in the ODP, compliance with minimum standards…). These loans are available from the date of receipt of the grant award and for 5 years from the date of installation.
Young farmers can avail themselves of these loans as well as EARLs (for all or part of the loan) or CAEC (for a part of the loan), as such, when the partners meet the conditions required for installation assistance.
The loans are designed to finance expenses (excluding tax) during the first year of agricultural activities:
• Assets associated with take-over:
- Take-over of equipment and buildings, but not land
- Working capital needs during the first year after installation
- Acquisition of land
- Acquisition of shares
- Take-over of pre-existing operating capital
• Renovation and adaptation investments:
- Refurbishment and fitting out buildings in order to change their usage or increase their size
- Compliance with regulations
- Construction of buildings and land development
- Livestock purchase
• Borrowing rate: 1% in less-favoured agricultural area and mountainous areas and 2.5% in agricultural plains. The rate applied during the subsidised phase is not regulated and is decided on at the time the loan is established.
• Loan term: maximum 15 years
• Subsidised period: 9 years in less-favoured and mountainous areas and 7 years in plain areas
• Equivalent subsidy ceiling (difference between the market rate and the subsidised rate, paid by the State): 11,800 € in plain areas and 22,000 € in other areas.
• There are no caps on the amounts of loans but there is a ceiling of 20,000 Euros for financing the acquisition of land and shares representing land. By way of derogation, the Prefect can authorise financing for the acquisition of land and shares up to a limit of 46,000 Euros. In all cases, the maximum amount for financing the acquisition of land and social shares representing land may not exceed 10% of the total cost of the installation procedure excluding land.
Subsidied loans : prêts bonifiés.