Refinance of Exiting Banks

Facilities to Refinance Exiting Banks

This product aims to facilitate those SMEs whose current bank loan facilities originated with banks, which are exiting the Irish market. The following product features are available through the partner On-Lenders with SBCI’s support, subject to the financial institutions’ own credit policies and procedures.

Product Features

  • Available to eligible SMEs whose current facilities originated with a bank which is exiting or has exited the Irish market, i.e. ACC Bank, Danske Bank, Lloyds / Bank of Scotland Ireland, Irish Nationwide / IBRC, Anglo Irish Bank / IBRC.
  • Lower interest rates
  • Loan amounts up to €5m
  • Minimum loan maturity of 2 years
  • Loans may also cover investment and working capital purposes

Example – Refinance of Exiting Bank

An SME has an outstanding investment facility with Danske Bank which is due to mature in September 2015, with a final bullet repayment of €1,200,000 to be paid. The SME has been advised that the facility will not be renewed and therefore requires funding to refinance out of Danske Bank. In addition, the SME has a further requirement for a new investment facility of €400,000.

Existing Products

The SME’s existing bank is no longer offering funding facilities.

SBCI Loan

The SBCI has designated funding specifically to re-finance loans from the exiting banks, through its On-Lenders. A new loan of €1,600,000, provided through its On-Lender, is approved to refinance the existing debt and fund the new investment requirement over a 7-year repayment term in line with the projected cash flow of the business.

Summary of Eligibility & State Aid

  • Available to qualifying SMEs whose current finance originated with a bank which is exiting the Irish market, i.e. ACC Bank, Danske Bank, Lloyds / Bank of Scotland Ireland, Irish Nationwide and Anglo Irish Bank / IBRC.
  • Loans are eligible if the finance originated with an exiting bank even if those loans have been sold as part of a portfolio to another third party institution.
  • The provision of funding for these loans is being made under the De Minimis Regulations which permit the provision of State Aid – SMEs may avail of De Minimis State Aid provided it does not exceed €200,000 in any 3-year period. In the case of certain loans, State Aid may arise by virtue of the discounted interest rate received by the SME on SBCI loans, and if so, the SME will be advised. It is important to note that the Aid is not the amount of the loan.
  • Full details available at Regulations

Summary of Excluded Activities

  • Finance of specific export operations, or finance contingent upon the use of domestic over imported products. In particular, it should not apply to financing the establishment and operation of a distribution network in other States, or current expenditure linked to the export activity.
  • Finance of pure real estate development activity
  • Finance of activities constituting pure financial transactions (e.g. purchase of shares)
  • Loans to undertakings in difficulty
  • Finance of activities forbidden by national or EU law
  • Agriculture, aquaculture and fisheries loans.
  • Aid for the acquisition of road freight transport vehicles by undertakings performing road freight transport for hire or reward.
  • Please refer to the link above for comprehensive detail on specific exclusions.