- €544m lent to over 12,500 SMEs since inception
- Average loan size of €43,200
- 4 new lending partners during 2016, bringing total to 8
- Strong demand for Agriculture Cash Flow Support Loans
1 March 2017: The Strategic Banking Corporation of Ireland (SBCI) today published a progress update for 2016 which shows that more than 12,500 SMEs have now drawn down €544 million in lower cost SBCI loans.
SBCI lending performance to end December 2016
The results show that:
- 12,590 SMEs drew down SBCI loans from their launch in March 2015 to December 2016
- Drawdowns totalled €544 million
- The average SBCI loan size is €43,000
- SBCI loans are being used to support 67,000 jobs in SMEs throughout Ireland
- Loans have been drawn by a wide range of sectors with agricultural SMEs showing the highest take up at 22%. Wholesale and retail trade SMEs accounted for a further 18%.
- The vast majority (84%) of SMEs taking out SBCI loans did so for the purposes of investing in their business. A further (11%) borrowed for working capital purposes while (5%) refinanced loans from banks exiting the Irish market.
SBCI Chief Executive Nick Ashmore said:
“We are pleased to report today that we have put over half a billion euro to work in the Irish economy, supporting SMEs and supporting jobs. We have introduced a range of lower-cost funding options and greater competition in the market and our progress shows we are bringing real benefits to a greater number of SMEs in a variety of ways.”
SBCI’s role expanded during 2016
During 2016, the SBCI expanded its role in three significant ways:
- Risk sharing: It entered into a significant new business line involving its first risk-sharing arrangements with lenders with the launch of the Agricultural Cash Flow Support Scheme, supported by the Department of Agriculture, Food and the Marine and the European Investment Bank. This enabled the SBCI, for the first time, to share a portion of the credit risk taken on by banks – making it easier for lenders to provide unsecured low-cost loans to farmers and agri-business SMEs.
- Credit Guarantee Scheme: 2016 also saw the SBCI being appointed as the operator and manager of the Credit Guarantee Scheme (CGS) provided by the Minister for Jobs, Enterprise and Innovation. A new version of this scheme (CGS 2017) will be deployed in the coming months.
- New funding: In addition, the SBCI successfully secured €450 million in new low cost funding via the Council of Europe Development Bank and the NTMA’s funding and debt management unit. This money will be used to fund further new lending through both existing and new on-lending partners.
Update on new Agricultural Cash Flow Support Loan Scheme
The SBCI launched this scheme last month to allow farmers and agri-business SMEs to borrow up to €150,000 at a special low rate of 2.95% to address the difficult market conditions that they have faced recently. These loans are available through AIB, Bank of Ireland and Ulster Bank.
As the SBCI is experiencing very strong demand for these loans from borrowers and supply is strictly limited to €150 million, Mr Ashmore said any potential borrowers who have not yet applied for these loans should do so quickly.
“We are experiencing strong demand and are well ahead of schedule and therefore we would remind potential borrowers that it will not be possible to meet their requirements if they apply after the available supply has been used up”, he said.
Mr Ashmore concluded by saying: “Our business is evolving and making great progress but our focus remains squarely on powering SME growth. The SBCI will continue to source other European supports and funding to introduce new credit measures in the future to address existing and emerging market failures”.
During 2016, SBCI provided funding to four new lenders: Ulster Bank; First Citizen Finance; Bibby Financial Services and FEXCO. This built on existing partnerships with AIB, Bank of Ireland, Finance Ireland and Merrion Fleet.
You can view the results infographic here.
- SBCI continues to drive greater financing choice for SMEs and competition with first invoice finance partner
13 July 2016: The Strategic Banking Corporation of Ireland (SBCI) and Bibby Financial Services Ireland (BFSI) have today announced a new lower-cost invoice financing fund for Irish SMEs.
An extension of SBCI’s on-going efforts to drive competition and choice in the Irish lending market, today’s announcement sees €45 million in funding being made available to Irish businesses. The agreement enables businesses to access favourable rates for BFSIs invoice finance facilities and is available immediately.
Invoice financing frees up cash for businesses by providing upfront payment against the value of outstanding invoices. Leading independent funder, BFSI, becomes SBCI’s first invoice finance partner, fourth non-bank provider and seventh on-lending partner.
Speaking of the launch, Minister for Finance, Michael Noonan TD said: “I welcome Bibby Financial Services Ireland’s addition to the SBCI’s range of on-lenders. This latest partnership with BFSI will provide an additional €45 million in lower cost funding to Irish SMEs. Small and Medium Enterprises (SMEs) are the lifeblood of the Irish economy so ensuring the finance needs of these businesses are met in today’s economic environment is therefore a priority. Bibby Financial Services is the UK’s leading independent invoice finance specialist with a global presence and will now combine SBCI finance with its wealth of experience and expertise to the Irish market for the benefit of SMEs both domestic and those who serve the UK market and other markets further afield.
“This new €45 million package further diversifies the funding available to SMEs at a critical time for Irish businesses especially those who include exports to the UK as part of their sales. It is a welcome fact that Bibby Financial Services is a global business with a strong presence throughout the UK and Ireland. Irish SMEs are now in a position to benefit from SBCI funding available through an expert Invoice Finance provider.”
Steve Box, International CEO at BFS commented: “We are delighted to announce our partnership with SBCI and to become its first invoice finance partner. This agreement will act as stimulus to the Irish economy and forms part of our overall aim to support an increasing number of businesses in Ireland.
“At a time where there is some uncertainty in markets across Europe, the most basic support that SMEs need to grow and scale-up their businesses is access to finance. Our €45m facility agreed with SBCI will enable us to deliver lower cost, more flexible and competitive funding solutions to SMEs throughout Ireland. While there is still a high level of dependency on traditional banks amongst SMEs, we are seeing a growing appetite for alternative sources of finance and we look forward to helping Irish businesses to thrive and grow, both domestically and internationally.”
SBCI CEO Nick Ashmore said: “The SBCI is here to enable the delivery of better SME financing options and to drive greater competition and we are very pleased to welcome BFSI as our newest on-lender as we strive to broaden out the choices available to SMEs. BFSI is a global market leader in the provision of invoice finance and a high quality potential financing partner to Irish SMEs.
“This facility will considerably strengthen BFSI’s ability to serve the Irish market and provide a more competitive product. We are particularly excited to be working with BFSI, given the important support invoice finance offers businesses looking to grow.”
Bernard O’Hare, Managing Director for BFS Ireland said: “Fundamentally, we’re a relationship based funder and we pride ourselves on providing responsive and flexible funding. It’s here that we can add real value, particularly at a time where immediate access to finance is more important than ever for Irish SMEs.”
SBCI today published a report on the economic impact its lending activity had in the SME marketplace in 2015.
Key new findings include:
– SBCI lending supported 17,000 jobs in Irish SMEs
– SBCI’s loan rates were on average 1.5% lower than market rates
– The top 5 sectors in which lending occurred were: hotels & restaurants, agriculture, health, retail and other business services.
– 92% of SBCI loans are being used for growth and investment versus 53% of current SME lending market loans
Commenting on the report, CEO Nick Ashmore said: “These initial figures show that the more choice and competition generated in the SME lending sector, the more we can help our indigenous businesses grow and support jobs and so we hope to build on this initial impact and further support Irish economic activity with an active pipeline of new lenders and funders in 2016.”