Euro fund triples its loan pot for SMEs
The European Investment Fund (EIF) and Strategic Banking Corporation of Ireland (SBCI) have tripled the lending capacity of an Irish SME programme to €330m.
The EIF is part of the wider European Investment Bank (EIB), the EU's financing arm, which has ramped up lending here since the crash.
The latest enlarged lending means that from next year an expected 10,000 Irish companies in all sectors will have access to support under the Competitiveness of Enterprises and Small and Medium-sized Enterprises (COSME) project.
The additional €230m announced yesterday was agreed after 3,500 SMEs, primarily in the agri-sector, fully utilised an initial €100m of COSME funds.
The loans allowed SBCI to launch a three-year risk-sharing product last year which was fully utilised within six months.
The COSME Loan Guarantee Facility supports guarantees and counter-guarantees to financial institutions to help them provide more loans and lease finance to SMEs.
It means low-cost loans can be accessed by borrowers through existing banks that partner with the funds to administer the scheme.
The Tánaiste and Minister for Business, Enterprise and Innovation Frances Fitzgerald, pictured, said the Government is also looking for EIB support for a fund to help firms ride out the effects of Brexit.
"I welcome this announcement and I look forward to working with the EIB Group on further significant supports for Irish businesses. In addition to the Brexit Loan Scheme which I recently announced, I am also working with the EIB and the SBCI on the development of a Brexit Investment Loan Guarantee Scheme," she said.
On Thursday the EIB announced an €85m loan for Limerick City and Council's Twenty Thirty project, which is developing a major office scheme in the city on what is known as the Opera Site.
EIB vice president Andrew McDowell said the enlarged SME lending scheme is also expected to be followed by a €300m joint scheme with SBCI to address working capital challenges of Irish companies - as announced in last month's budget.
State-owned SBCI's CEO Nick Ashmore said the EU funding means the it can develop and deliver new programmes that address recognised market failures relating to SMEs' ability to obtain access to finance.