Strategic Banking Corporation of Ireland (SBCI) launches €400 million of low-cost, long-term funding for SMEs

  • low cost, longer term loans for investment and working capital
  • dedicated funding for SMEs whose bank has left the Irish market
  • specialised funding for agriculture investment loans

Thursday 19 February 2015 – The Strategic Banking Corporation of Ireland (SBCI) has today launched its initial product programme to provide €400 million of low-cost, long-term funding to Irish SMEs.

The first phase of SBCI measures includes new, SME-friendly loan products available from 9 March through AIB and Bank of Ireland which will act as On-Lenders of low-cost funding provided to them by the SBCI. Using existing lenders for the first phase allows the SBCI to reach the widest range of SMEs as quickly as possible.

Subsequent phases will see the SBCI supporting smaller existing bank and non-bank funding providers and bringing in new participants to the Irish market to act as On-Lenders, enabling them to compete and grow. The SBCI product range will also expand further to include more targeted funding solutions.

Today’s SBCI product launch was attended by An Taoiseach, Mr Enda Kenny TD; the Tánaiste, Ms Joan Burton TD; the Minister for Finance, Mr Michael Noonan TD; and the Minister for Public Expenditure and Reform, Mr Brendan Howlin TD.

The SBCI’s first product offering includes –

  • SBCI SME Investment and Working Capital Loan – Key features include a discounted interest rate and loan amounts up to €5 million for periods between 2 and 10 years.
  • Facilities to Re-finance Exiting Banks1 – Loans to refinance those SMEs whose current bank loan facilities originated with banks which are exiting the Irish market. Loans may also cover new lending for investment and working capital purposes.
  • SBCI Agriculture Investment Loan – Available to support investment by agriculture SMEs involved in primary agriculture production, the processing of agriculture products or the marketing of agriculture products.

Details on individual lending rates and specific product features will be available from AIB and Bank of Ireland – and other lenders as they begin to offer SBCI loans.

1All SBCI loans are for new lending not refinancing, with this exception.

The Taoiseach said:

“The mission of the Strategic Banking Corporation of Ireland is aligned to that of Government. Providing more credit for businesses to grow and create more jobs is key to securing Irish recovery. More jobs fund better services, reduce taxes on those already at work and provide opportunities for people who have left Ireland to come home. Improving credit availability for business was a feature of discussions I had with Chancellor Merkel on ways to reinforce Ireland’s economic recovery. As a result, KfW, the German development bank, was asked to work with the German and Irish authorities in order to deliver on funding to help create the SBCI.”

The Tánaiste said:

“Start-ups and other small businesses have a vital role to play in creating jobs, but access to credit is essential if our dynamic young enterprises are to survive and thrive. Too many SMEs still find it difficult to get the credit they need. The Strategic Bank will take a fresh approach, ensuring that a secure and sustainable credit line is available for high potential, high growth companies. Today we are making some €400 million available to that end. The Strategic Bank will help grow the recovery and place the economy on a sound and sustainable footing.”

SBCI Chief Executive Nick Ashmore said:

“Irish SMEs have been paying more to borrow than similar businesses across Europe. The SBCI products we are bringing to market are designed to address this in a simple and SME-friendly way. By bringing cheaper, longer-term funding supported by the EIB, KfW and the ISIF, the SBCI will help SMEs with their funding costs and make it easier for them to support jobs and grow their business. However, this is just the start of the SBCI’s work in filling a major gap in addressing the needs of SMEs. Today’s first phase is about using existing lenders to distribute new, SME-friendly loans as widely as possible.

“In the months ahead, we will make SBCI loans available through other banks that are already active here, as well as supporting existing and new specialist SME lenders in the Irish market thereby increasing competition. Beyond this the SBCI will look to leverage further support from Europe and address more specific market issues.”

The launch took place in the Liffey Trust Centre in Dublin’s North Docklands which has supported more than 200 enterprises creating employment for approximately 800 people. The event was attended by approximately 100 SME owners and representatives of the SME community.

Issued on behalf of the SBCI by
Gordon MRM
sbci@gordonmrm.ie
Contact:
Ray Gordon (087) 241 7373
David Clerkin (087) 830 1779