SBCI and Merrion Fleet announce new €25m fleet finance fund for Irish SMEs

  • New figures show 3,200 SMEs have borrowed €110m from SBCI to date
  • Merrion Fleet becomes fourth SBCI lending partner (after AIB, Bank of Ireland and Finance Ireland)
  • Total of €475 million now committed by SBCI for on-lending to Irish SMEs
  • SBCI loan drawdowns reach €110 million in its first seven months

Thursday 5 November 2015 – The Strategic Banking Corporation of Ireland (SBCI) today announced a new €25 million contract hire finance programme through Merrion Fleet, a professional fleet management service provider.

Merrion Fleet will provide specialist contract hire facilities with terms of 3-4 years to SMEs. Its facilities will include its fleet management services and also feature a guaranteed buy-back of the assets at the end of the term.

The Merrion Fleet offering is aimed at SMEs who want to buy new cars or upgrade their existing fleet without taking on the risks and maintenance costs of taking long-term ownership.

Merrion Fleet will pass on the benefit of low-cost funding provided by the SBCI to allow customers to borrow at a discounted rate.

Minister Michael Noonan said:

“This is another fantastic announcement by the SBCI. Just last week they announced the first non-bank finance partnership worth €50 million. This latest non-bank partnership with Merrion Fleet will provide an additional €25 million in funding to SMEs. Non-bank finance is a vital source of funding to a growing economy. Seventy-five percent of SME funding in developed economies such as the US comes from non-bank sources, in Ireland it is only about twenty-five percent. This latest announcement from the SBCI will provide greater options for SMEs to expand.

The SBCI has also reached another significant milestone as they have now surpassed €100 million in loan drawdowns. At the launch of the SBCI earlier this year I predicted that it would become a central element in SME funding in Ireland. I am delighted to see that it is already living up to this prediction”.

SBCI Chief Executive Nick Ashmore said:

“We want to drive down borrowing costs for SMEs by bringing more competition to the market and supporting types of finance that are tailored to the needs of SMEs.

Bringing Merrion Fleet on board as our fourth on-lender, and importantly our second non-bank lender, represents another major step towards achieving this goal. We are also delighted to be supporting such a strong emerging indigenous finance firm as it grows its business and extends its offering to SMEs.

As the economy picks up and businesses seek to expand, they can benefit both from the discounted interest rates and the tailored features and supports such as maintenance and risk management that this contract hire product from Merrion Fleet will provide.”

David Hurley, CEO of Merrion Fleet said:

“Merrion Fleet Management is delighted to partner with SBCI on this new low cost funding for SMEs. Access to competitive finance is one of the biggest challenges facing Irish SME’s today and this partnership will allow companies to outsource their fleet management requirements to Merrion Fleet at the most cost effective rates available in Ireland today.

Outsourcing their vehicle requirement enables SMEs to take their fleet off balance sheet allowing this capital to be put to work at the core of the business’s activity. Availing of all our other services (fuel cards, vehicle advice, health and safety and driver Apps) will further allow SMEs to further reduce the costs of running their fleet including freeing up time currently spent on the fleet to be used on more productive areas of the business.

This news is good for our existing SME customers and provides a great opportunity for Merrion Fleet Management to work with new SME customers”.

SBCI drawdowns exceed €100 million

Separately the SBCI today provided an update on loan drawdowns showing 3200 Irish SMEs are now putting close to €110 million in SBCI funding to work for their business.

Passing €100 million of lending in its first seven months of operation is a significant milestone for the SBCI as it seeks to deploy its first €800 million of finance to Irish SMEs.

Commenting on the SBCI’s performance, Nick Ashmore said:

“These figures highlight the very strong progress we are making in delivering low-cost, SME-friendly funding to businesses that need it to grow and support jobs. We look forward to building on this progress in the coming months by teaming up with more lenders and providing additional new funding”.

The SBCI ensures that the benefits of its low-cost funding are passed on to SMEs by on-lenders in the form of lower borrowing rates.

Last week, SBCI announced that Finance Ireland would deploy a further €50m in SBCI loans for leasing and hire purchase for SMEs. The SBCI is also working with other bank and non-bank funding providers and bringing in new participants to the Irish market to act as on-lenders. Further announcements of new on-lenders will be made in the coming months.

The SBCI has launched the first in a series of case studies showing how SMEs are accessing and deploying SBCI funds for their businesses. The case study video can be found on SBCI’s website here.