Commercial lenders invited to apply to deploy Government's new €300m Brexit loan scheme
The Government today moved to advance its €300m Brexit loan scheme unveiled in last month’s budget, inviting applications from commercial lenders to deploy the funds.
The cash injection is aimed at alleviating the cost pressures on small businesses triggered by the UK's decision to exit the European Union in 2019.
Affordable loans, offered at rates of 4pc or less, will be provided by the Strategic Banking Corporation of Ireland, which recently came under fire from TD Michael Lowry for alleged anti-competitive practices. The accusations were rebuffed by the SBCI, which has funnelled €850m to over 21,000 SMEs since its launch in 2015.
In a statement An Tánaiste and Minister for Business, Enterprise and Innovation, Frances Fitzgerald, said the Brexit loan scheme "has been designed to help and support businesses affected by Brexit." She said "the maximum loan available under the scheme will be €1.5m and the minimum will be €25,000, providing much needed headroom to Irish businesses from the first quarter of 2018", confirming an earlier story on the loan threshold by this newspaper.
Close to 40pc of the emergency funds will be targeted at the agricultural sector, which has so far shouldered the brunt of the fallout from Brexit.
The Minister for Agriculture, Food and the Marine Michael Creed, said "the call for expressions of interest shows the SBCI is moving quickly to implement this scheme in the first quarter of2018. We want to ensure SMEs that need targeted low-cost, flexible finance for working capital purposes to deal with Brexit, can get this finance as a matter of urgency. "
Applications to become an on-lender to the Brexit loan scheme must be submitted by December 1.
Nick Asmore the head of the SBCI described the scheme as “good news for SMEs and good news for lenders that want to support new and existing SME customers”
He said “we’re expecting a very strong take-up from lenders to allow us to reach as many SMEs as we can”.
Since its launch the SBCI has struck funding deals with eight on-lenders, including three banks, AIB, Bank of Ireland, Ulster Bank, together with a handful of smaller financiers, such as Finance Ireland and First Citizen Finance.
The State-backed body has now invited expressions of interest from banks and other financial intermediaries.
Small businesses will be able to access the loans next year with the scheme scheduled to run for two years from its launch date.