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.
With SBCI providing low cost funding to eligible SMEs, these products will deliver the following benefits:
In addition, subject to the financial institutions’ credit policies and procedures, the following features may also be available to qualifying SMEs:
A family-run SME which operates a small manufacturing facility needs to upgrade a key piece of machinery which is nearing the end of its useful life and requires frequent maintenance. The new machine will increase production efficiency and will benefit from a maintenance warranty for 2 years. The SME requires a loan of €400,000 to fund the investment, and will seek to repay over a term of 5 years.
In this scenario without SBCI funding, the SME’s bank may approve a loan for the full amount of €400,000 at its standard business rate of, say, 6.50% interest, over a 5-year repayment term. Alternatively, an asset leasing firm may provide a leasing facility for €400,000 at a rate of 7.50% over 5 years; however, the SME will not own the asset at the end of the period.
The SBCI loan, provided through its On-Lender, is approved at, say, 5.00% over the same 60-month repayment term. The reduced cost of the SBCI loan is illustrated below:
| Existing Loans | Existing Leasing | SBCI Product | |
| Facility Amount | €400,000 | €400,000 | €400,000 |
| Interest Rate | 6.50% | 7.50% | 5.00%* |
| Facility Term | 60 Months | 60 Months | 60 Months |
| Monthly Repayment | €7,826 | €8,015 | €7,548 |
| Total Cost of Credit | €69,588 | €80,911 | €52,910 |
* Estimated SBCI nominal rate. SBCI rates may vary by On-Lender and according to loan size and other factors. Repayments calculated on basis of constant payments and constant interest rate.
An event equipment hire business in Galway needs to invest in audio-visual equipment to expand its range of services. It requires an additional loan facility of €300,000 to fund the capital expenditure upfront, but given the lead time to securing new conference bookings, it does not expect a return on its investment for approximately 12 months. The business has secured advance bookings covering the period in 12-24 months’ time, which support the credit worthiness of the proposed loan.
The SBCI loan, provided through its On-Lender, is approved at a discounted rate of 6.35%, with repayments commencing 12 months after drawdown to correspond with the investment life cycle. The flexible terms of the SBCI loan are illustrated below:
| SBCI Product | |
| Facility Amount | €300,000 |
| Interest Rate | 6.35%* |
| Loan Term | 60 Months (repayments over 48 months) |
| Repayments Commence |
12 months post-drawdown |
* Estimated SBCI nominal rate. SBCI rates may vary by On-Lender and according to loan size and other factors.
A building supply company in west Dublin requires a working capital facility of €250,000 to finance increased stocking requirements. Traditionally the company used its overdraft facility to fund both its current and capital expenditure, however this has proven costly and has resulted in a hard core of residual debt remaining in the overdraft.
In this scenario without SBCI funding, the SME’s bank may approve a revolving overdraft facility of €250,000 at a standard business overdraft rate of, say, 7.85% interest.
The SBCI working capital loan, provided through its On-Lender, is approved at 4.50% over a 36-month repayment term. The reduced cost of the SBCI loan is illustrated below:
| Existing Products | SBCI Product | |
| Facility Amount | €250,000 | €250,000 |
| Interest Rate | 7.85% | 4.75%* |
| Loan Term | Revolving Annually | 36 Months |
| Monthly Repayment | €7,817 (36 months) | €7,465 |
| Total Cost of Credit | €31,405 | €18,729 |
* Estimated SBCI nominal rate. SBCI rates may vary by On-Lender and according to loan size and other factors. Repayments calculated on basis of constant payments and constant interest rate.
The owner of a furniture retailing business employing 14 people in Leitrim is due to retire in the coming months, and as part of her succession planning, is seeking to sell her shareholding and ensure the continued operation of the business.
The existing management team comprises 3 senior employees, each of whom has over 10 years’ service with the company, and they are interested in acquiring the business from the retiring owner. The transition of ownership will allow the existing SME to continue as a going concern and maintain local employment, and has the potential to bring fresh impetus to the development of the business.
The SME requires a loan of €600,000 to fund the acquisition, and will seek to repay over a term of 5 years, in line with the projected cashflows of the business.
SBCI loans specifically allow for investment to facilitate generation change, or staff-related SME transfer which ensures the continuation in economic activity of the affected SME. This financing applies only to cases where both the buyer and the SME to be sold are eligible SMEs.
The SME may therefore avail of the lower interest rates and longer-term funding afforded by SBCI loans relative to other lending products.