Monday 23 October 2017

One in three SME loan applications now from farmers, says AIB

AIB: Rising demand for farm loans
AIB: Rising demand for farm loans
Sarah McCabe

Sarah McCabe

A THIRD of all small business loan applications received by AIB now come from farmers, the bank has said.

Senior officials from the bank told the Irish Independent that there had been a steady rise in demand for loans among farmers in recent months.

"We are seeing very strong demand from the agri sector now we're getting closer to 2015, to the abolition of milk quotas," said AIB's head of business banking Ken Burke.

He added that the exodus of banks such as ACC and Danske from Ireland in the wake of the recession had also created opportunities.

"We are heavily involved in the refinancing of SMEs [small and medium enterprises] whose previous lenders are withdrawing or have withdrawn from Ireland," said Mr Burke.

A total of six retail banks have been wound down or have left Ireland since the start of the recession -- Irish Nationwide Building Society, Halifax, ACC Bank, Danske Bank and Postbank.

EBS was also merged into AIB.

Yesterday, AIB launched a new loan fund dedicated to SMEs seeking to upgrade their energy efficiency packages.

IMMEDIATELY

The €100m fund is available to borrowers immediately and, thanks to support from the European Investment Bank, charges a special interest rate -- 1.25pc below the bank's variable standard rate.

The bank said it would take into account the projected savings from energy-efficiency projects when calculating the borrower's repayment capacity.

It released a study into SME energy spending alongside the announcement, which estimated that SMEs spend an average of €114,000 on energy bills every year.

The research found that one in seven SMEs will look for bank finance to fund an energy project in the next 12 months, while the majority expect to need less than €25,000.

The typical savings payback period, it said, is less than three years.

Irish Independent

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