The Strategic Banking Corporation of Ireland (SBCI) was set up in September 2014 to ensure that Irish SMEs have access to stable, lower-cost and longer-term funding options. Since the organisation started its lending activity, the SBCI has provided more than €1.4bn in funding support to more than 29,000 SMEs utilising a mix of low-cost liquidity and guarantees.
CEO Nick Ashmore states that access to finance is critical for SMEs during this time of uncertainty due to the challenges being presented by the Covid-19 pandemic. To assist small firms in dealing with these challenges, the SBCI, in conjunction with the Department of Enterprise, Trade and Employment and the Department of Agriculture, Food and the Marine, has developed the SBCI Covid-19 Working Capital Loan Scheme.
“This guarantee supports loans up to three years, with a fixed rate of 4%, loan amounts between €25,000 and €1.5m and with loans up to €500,000 being unsecured,” Ashmore informs. “This scheme can be used to help SMEs address their Covid-19 challenges and is designed to allow most sectors to access its benefits.”
The existing Credit Guarantee Scheme and Brexit Loan Scheme (BLS) are also available to support SMEs at this challenging time. Relaunched in 2018, the Credit Guarantee Scheme aims to assist viable SMEs, which under normal lending criteria are unable to borrow from their bank, in accessing credit. SMEs can avail of this support directly from AIB, Bank of Ireland and Ulster Bank.
The eligibility process for SBCI’s Covid-19 Working Capital Loan Scheme is a straightforward one, as Ashmore informs. “SMEs should visit the dedicated Covid-19 Scheme page on our website, complete the application form and email it to us. We will respond within 72 hours to confirm if you’re eligible for the scheme.”
The SME then takes the letter of eligibility, together with a simple business plan (there’s an easy-to-use template on the SBCI website) to their bank to commence the loan application.
Ashmore adds: “A number of businesses have queried whether they would meet the innovation criteria for the scheme. The scheme is designed to take a very broad interpretation of innovation and therefore most SMEs should be able to satisfy this requirement.”
The SBCI commitment is to continue developing products and on-lender relationships to deliver effective and innovative financial support to Irish firms. The immediate priority is to provide as much support as is possible to small firms over the coming months. Minister for Business, Enterprise and Innovation Heather Humphreys recently announced increased funding of €450m, with €250m being allocated to the Covid-19 Working Capital Loan Scheme with the remaining €200m to the Future Growth Loan Scheme (FGLS). The SBCI is working with its key stakeholders to bring this additional funding to market in the near future.
“The ability to access working capital will be critical in ensuring that SMEs can work their way through this current crisis,” says Ashmore. “We will continue to utilise government and European backing to provide finance to the SME market, including farming, when there is a policy requirement and when it supports economic development and enhanced competition.”
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The Strategic Banking Corporation of Ireland’s goal is to ensure access to flexible funding for Irish SMEs. For more information, visit www.sbci.gov.ie. Businesses can also call 1800 804 482 or email info@sbci.gov.ie if any questions arise.