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SBCI publishes 2020 progress update and new strategy for 2020-2025

News
18 May 2020

The Strategic Banking Corporation of Ireland (SBCI), set up by the Government to make it easier and cheaper for Irish SMEs to borrow, has today published a progress update for 2020 and its new strategy for the period 2020 to 2025.

Progress update to 2020 – key points:

New strategy for the period 2020 to 2025 – key points:

Comment by Paschal Donohoe TD, Minister for Finance and Public Expenditure and Reform:

“I welcome today’s progress update by the SBCI and the publication of its new strategy for the period 2020 to 2025.

The SBCI has been very effective in its first phase, delivering €1.5bn in support for over 30,000 Irish SMEs in need of low-cost, easy-to-access finance through 11 different on-lending partners.

The new strategy published today sets out a roadmap for the SBCI to continue to support SMEs, making a range of new loan and leasing products available by teaming up with the Government and European partners to channel EU supports to Irish SMEs.

At a time when Irish SMEs face unprecedented challenges, the SBCI has a clear strategy to build on its existing range of supports and help them to survive, recover and grow in the months and years ahead.”

Comment by Nick Ashmore, SBCI Chief Executive:

“The SBCI has grown and evolved substantially in its 6 years in operation, from an institution that started out focusing on sourcing lower cost funding to one that has shaped new, SME-friendly loan and leasing products and teamed up with both existing lenders and new market entrants and both banks and non-banks.

Our strategic plan demonstrates our commitment to continue innovating and developing new products that meet the changing needs of Irish SMEs throughout the economic cycle.

While we have been successful in promoting competition, enhancing SME access to finance and bringing down the cost of borrowing, Ireland’s SMEs need more and better forms of finance now more than ever to help them overcome the immense challenges posed by Covid-19. We will focus relentlessly on giving SMEs the financing tools they need.”

2020-2025 strategy:

Risk-sharing schemes:

The SBCI supports borrowers through 5 risk-sharing schemes tailored to meet specific challenges facing SMEs. Risk-sharing allows lending partners to provide loans without taking all of the credit risk, which facilitates easier access for SMEs to these loans through more attractive security requirements, lending criteria or loan pricing.

Risk-sharing scheme

Details

Government of Ireland Credit Guarantee Scheme

(SBCI took over operation of the scheme in 2016, amended scheme launched in 2018, 135 loans totalling €27m covered by scheme)

  • The Scheme aims to assist viable SMEs, which under normal lending criteria are unable to borrow from their bank, in accessing credit.
  • The scheme operates by providing an 80% guarantee from the Department for Business, Enterprise and Innovation to participating finance providers (currently AIB, Bank of Ireland and Ulster Bank) on qualifying loans to SMEs.
  • The scheme is currently being expanded to support €2bn of lending for Covid-19 impacted businesses.

Agriculture Cashflow Loan Scheme

(Launched in 2017, €150m capacity fully utilised)

  • The scheme was available through AIB, Bank of Ireland and Ulster Bank with a low-cost interest rate of 2.95%.

Government of Ireland Brexit Loan Scheme

(Launched in 2018, €300m capacity, €200m of which was diverted to set up the initial SBCI Covid-19 Working Capital Scheme). 260 loans totalling €53.5m approved to date

  • The scheme is available through AIB, Bank of Ireland and Ulster Bank.
  • Loan amounts of between €25,000 to €1.5m.
  • Maximum interest rate of 4%.
  • Loans unsecured up to €500,000.
  • Loan terms ranging from 1 year to 3 years.

Government of Ireland Future Growth Loan Scheme

(Launched in 2019, initial €300m, current capacity almost fully utilised, announcement to extend by €200m in 2020)

  • Loans available through AIB, Bank of Ireland, Ulster Bank and KBC Bank.
  • Loan amounts from €100,000 (€50,000 for Primary Agriculture) to a maximum of €3,000,000.
  • Initial maximum loan interest rate of 4.5% for loans < €250,000 and 3.5% for loans >= €250,000. Variable interest rates are subject to change.
  • Loan terms ranging from 8 to 10 years.

Government of Ireland Covid-19 Working Capital Loan Scheme

(Launched in March 2020, 2 weeks after Covid restrictions were introduced, €200m capacity, additional €200m announced in April 2020)

  • The scheme is available through AIB, Bank of Ireland and Ulster Bank.
  • Loan amounts of between €25,000 to €1.5m.
  • Maximum interest rate of 4%.
  • Loans unsecured up to €500,000.
  • Loan terms ranging from 1 year to 3 years.
  • 189 loans totalling €33m approved to date.