Agri-Food Sector Accesses $200M in Guaranteed Loans
Castilla y León Invests €200 Million in Rural Development through Guaranteed Loans
Table of Contents
- Castilla y León Invests €200 Million in Rural Development through Guaranteed Loans
- Castilla y León Invests €200 Million in Rural advancement: Your Questions answered
- What is the Castilla y León Rural Development Loan Program?
- How Much Funding is Available?
- who is Eligible for These Loans?
- What Can the Loan Funds Be used For?
- What are the Key Loan Features?
- What are the Loan Limits?
- What are the specific benefits and limits for young Farmers?
- How Does the Request Process Work?
- Which Financial Institutions are Participating?
Castilla y león is set to bolster its agricultural sector with a €200 million investment in guaranteed loans. This initiative, managed under the strategic plan of the PAC 2023-27, aims to provide crucial financial support to farmers and agri-food businesses in the region.
Financial Instrument for Rural Development
María González Corral, Minister of Agriculture, Livestock and Rural Development of the Junta, formalized agreements with 12 credit entities to manage this financial instrument. The move builds upon the success of the 2014-22 Rural Development Program, where Castilla y León pioneered the initiative in Spain. During that period,1,225 loans were formalized,totaling over €200 million,representing 93% of all such loans granted nationwide.
Agriculture is of foremost importance to Castilla y León’s economy,providing jobs to 7.3% of the labor force. It is characterised by two major sub-sectors: arable crops and livestock which between them account for 94% of total agricultural production (46% for arable crops, 47% for livestock). Castilla y León is home to 98 300 farms.
The Board is reaffirming its commitment to facilitating investments in agricultural farms, agri-food industry companies, and ventures led by young farmers.
with the financial instrument we offer all public support for the strategic investments that the sector wishes to face, we benefit its professionals by facilitating access to credit and promoting the development and modernization of the rural areas of Castilla y León
loan Features and Accessibility
This initiative is tailored to the specific needs of the agricultural sector, offering financing for both circulating capital and investment projects. Notably, projects focused on farm modernization or the establishment of young farmer-led companies can be combined with non-refundable grants. The submission process remains open, allowing requests to be submitted at any time.
The Junta de Castilla y León will allocate €26 million to guarantee these loans, with co-financing from the General State Management and Feader in the 2023-2027 program.This allocation is expected to directly formalize €162 million in loans. Through the reuse of guarantees as loans are repaid, the total mobilized amount is projected to exceed €200 million.
Loan characteristics for Agricultural Businesses
Following the publication of the list of collaborating entities in the Official Gazette of Castilla y León, interested parties can submit their applications directly to the financial entities. This streamlined process aims to reduce credit granting times to approximately one month.Approval is contingent upon recognition of the right to a guaranteed loan from the ministry of Agriculture, Livestock and Rural Development, and a favorable credit assessment from the State Corporation of Agricultural Cauration (SAECA).
Key loan features include:
- Flexible amortization deadlines: 3, 5, 10, 12, 15, and 20 years.
- Grace periods: Varying between one and four years.
- preferential interest rate: Euribor plus 1%.
- Potential opening commission: No more than 1% of the granted amount.
Loans can be used for investments, financing circulating capital, or a combination of both.
Loan Limits
- Farming Modernization:
- Natural Person: €400,000
- Legal Entity: €1,000,000
- Circulating Capital: €200,000
Support for Young Farmers
Young farmers can access loans up to €400,000. A significant new feature allows them to receive 100% support for land purchases through the modernization line, even if not directly linked to incorporating into an agricultural company.
Agri-Food Industry Support
The food industry benefits from a maximum limit of €1,000,000 for both investment and circulating capital per application, with a total limit of €2,000,000 within a 24-month period.
Participating Financial Institutions
The financial institutions participating in this financial instrument include:
- Cajamar
- CaixaBank
- Unicaja
- Caja Viva
- Abanca
- BBVA
- Caja Rural de Salamanca
- Caja Rural de Soria
- Caja Rural de Zamora
- Banco Sabadell
- Eurocaja Rural
- Ibercaja
Castilla y León Invests €200 Million in Rural advancement: Your Questions answered
castilla y León is making a significant investment in its agricultural sector, with €200 million in guaranteed loans available to farmers and agri-food businesses. This initiative,managed under the PAC 2023-27 strategic plan,aims to provide crucial financial support for modernization,growth,and attracting young farmers. Here’s a breakdown of what you need to know.
What is the Castilla y León Rural Development Loan Program?
The Castilla y León Rural Development Loan Program is a financial initiative designed to support the agricultural sector in the region. It provides guaranteed loans to farmers, agri-food businesses, and young farmers, facilitating investments in modernization, expansion, and new ventures. This program is managed under the PAC 2023-2027 strategic plan and builds upon the success of the 2014-2022 Rural Development Program.
How Much Funding is Available?
The Junta de Castilla y León is allocating €26 million to guarantee these loans, with co-financing from the General State Management and Feader in the 2023-2027 program. this is expected to formalize €162 million in loans initially. Thru the reuse of guarantees as loans are repaid, the total mobilized amount is projected to exceed €200 million.
who is Eligible for These Loans?
The loans are available to:
Agricultural farms
Agri-food industry companies
Ventures led by young farmers
The program aims to support strategic investments that contribute to the development and modernization of rural areas.
What Can the Loan Funds Be used For?
Loans can be used for:
Investments in agricultural farms and agri-food businesses
Financing circulating capital (working capital)
Farm Modernization projects
Land purchases (specifically for young farmers)
Notably,projects focused on farm modernization or the establishment of young farmer-led companies can be combined with non-refundable grants.
What are the Key Loan Features?
Here are the key loan characteristics for agricultural businesses:
Amortization Deadlines: Flexible, with options for 3, 5, 10, 12, 15, and 20 years.
Grace Periods: Varying from one to four years.
Interest Rate: Preferential rate of Euribor plus 1%.
Opening Commission: No more then 1% of the granted amount.
What are the Loan Limits?
Loan limits vary based on the purpose and the applicant type:
modernization of farms:
Natural Person: €400,000
Legal entity: €1,000,000
Circulating capital(Working capital): €200,000
Agri-Food Industry: €1,000,000 (up to €2,000,000 within a 24-month period)
Table: Loan Limits at a Glance
| Loan Purpose | Applicant Type | Loan limit |
| ——————— | —————- | ———— |
| Farm Modernization | Natural Person | €400,000 |
| Farm Modernization | Legal Entity | €1,000,000 |
| circulating Capital | All | €200,000 |
| Agri-Food Industry | All | €1,000,000 |
| Agri-Food Industry Max| All | €2,000,000(within 24 months) |
What are the specific benefits and limits for young Farmers?
Young farmers have access to loans up to €400,000. A significant new feature allows them to receive 100% support for land purchases through the modernization line, even if not directly linked to incorporating into an agricultural company.
How Does the Request Process Work?
- Check the Official Gazette: Following the publication of the list of collaborating entities in the Official Gazette of Castilla y León, interested parties can submit their applications directly to the financial entities.
- Apply to Financial Entities: Submit your application directly to one of the participating financial institutions.
- Approval Process: Approval is contingent upon recognition of the right to a guaranteed loan from the Ministry of Agriculture, Livestock and Rural Development, and a favorable credit assessment from the State Corporation of Agricultural Cauration (SAECA).
The application process aims to be streamlined, with credit granting times reduced to approximately one month.
The submission process remains open, allowing requests to be submitted at any time
Which Financial Institutions are Participating?
The participating financial institutions include:
Cajamar
CaixaBank
Unicaja
Caja Viva
Abanca
BBVA
Caja Rural de Salamanca
Caja Rural de Soria
Caja Rural de Zamora
Banco Sabadell
Eurocaja Rural
Ibercaja