SMEs get €45m from Strategic Bank
The Strategic Banking Corporation of Ireland (SBCI) has revealed that €44.7m worth of loans has been drawn down by small and medium businesses since mid-March.
The SBCI, which was set up last year to provide low-cost loans to small businesses, said that since the first SBCI loans were made available from mid-March this year 1,626 SMEs have drawn down funding.
The SBCI works through third-party lenders, giving them money at low interest rates which are then passed on to SMEs.
Almost 90pc of all loans were for investment purposes. One third of loans were drawn down for the purposes of agriculture, the largest of any industry. Administration and support services saw the next highest take up, with 16pc, with accommodation and food services rounding out the top three with a 12pc take-up.
SBCI chief executive Nick Ashmore said: "The SBCI has made an excellent start [and] we are encouraged to see almost €45m of loans approved and drawn down by SMEs"
"It is early days but momentum is gathering and the SBCI team has been working hard to create awareness of these loans amongst the Irish SME community to support the growing appetite for business investment.
"This finance is appealing to SMEs who want to have the flexibility and cost efficiency. The fact that 90pc of the loans are for investment purposes and the average loan size is €27,500 indicates renewed confidence amongst smaller SMEs and a real sense of renewal across the business community who have suffered through some leaner years."
The SBCI has €800m to lend by the end of 2016 and the biggest loan it can give is €5m. Half of this amount has already been allocated to BoI and AIB. Its fund includes €250m from the former National Pension Reserve Fund, as well as money from the European Investment Bank and German national development bank KfW.
The next lender in line is Bibby Financial Services, an invoice finance group. It will receive between €25m and €100m in low-cost money which will then be passed on to small businesses. Bibby Financial Services is the Irish lending subsidiary of UK multinational Bibby Line Group.
The SBCI was created to address an acute shortage in lending for Ireland's small businesses, who cumulatively provide the majority of the country's jobs.