Lower rates needed on Brexit loan scheme - FF
Fianna Fáil is pushing the Government to get the interest rate on money under the Brexit loan guarantee scheme for small and medium-sized businesses lowered, claiming it is still higher than in other European countries.
The Government officially launched its €300m loan scheme on Wednesday.
The aim of the scheme is to provide working capital at cheaper rates than normal of around 4pc to small and medium-sized businesses that are either affected by Brexit, or believe they will be in the future.
Fianna Fáil's Stephen Donnelly, the party's former Brexit spokesman (he was replaced in a frontbench reshuffle yesterday by Lisa Chambers) welcomed the scheme, but warned it doesn't go far enough.
"The Brexit loan scheme is the right idea, but to make it useful to SMEs the interest rate should be lower, at least comparable to French and German SME interest rates," Mr Donnelly told the Irish Independent.
"The lending criteria also needs to be lengthened to seven or eight years."
Irish SME loans are the most expensive in Europe from an interest-rate perspective.
According to the Central Bank, interest rates here are "substantially" above the eurozone average.
In its SME market report published in January, the regulator said the interest rate in Ireland in July 2017 was 5pc, about 2.2 or 2.3 percentage points higher than the average across the eurozone.
That means the 4pc rate in the Brexit loan scheme is still high compared with elsewhere, Mr Donnelly said.
The loan scheme is being operated via the Strategic Banking Corporation of Ireland (SBCI), through AIB, Bank of Ireland and Ulster Bank.
The State, in conjunction with the European Investment Bank, will provide the guarantee for the loans, rather than liquidity.
At the launch of the scheme on Wednesday, Business, Enterprise and Innovation Minister Heather Humphreys said that the Government is working with the European Investment Bank on a longer-term loan scheme - of around seven years - for businesses affected by Brexit.
Mr Donnelly said the scheme should already be in place.
"Brexit happened nearly two years ago. Irish firms need to be reacting now, not waiting for the Government to get the loan scheme right. If that's what they're talking about, do it now."
Meanwhile, in response to a parliamentary question from Mr Donnelly's party colleague Niall Collins, Ms Humphreys said the scheme will be operated within De Minimis State aid regulation.
De Minimis aid is small amounts of State aid given to an enterprise, which cannot exceed €200,000 over any three fiscal years to any company irrespective of size or location.