Government opens €300 million Brexit Loan Scheme for Irish Businesses for applications
- Scheme open to eligible businesses with up to 499 employees
- Loans of up to €1.5 million at a rate of 4% or less
- Scheme has the potential to benefit over 5,000 companies impacted by Brexit
- Scheme administered for Ministers Humphreys’ and Creed’s Departments by SBCI, an agency of Minister Donohoe’s Department
- Scheme delivered in partnership with the EIB Group and European Commission
Minister for Business, Enterprise and Innovation, Heather Humphreys T.D., Minister for Agriculture, Food and the Marine Michael Creed T.D., and Minister for Finance and Public Expenditure and Reform Paschal Donohoe T.D. today (March 28) opened the Brexit Loan Scheme for applications to allow for the roll out of €300 million in funding to eligible Irish businesses. The Scheme was launched at the Liffey Trust in Dublin’s inner city.
Eligible businesses can now apply for the Scheme through the participating finance providers: the Scheme is open through Bank of Ireland and Ulster Bank, with AIB following in June. The first step for businesses will be to complete the eligibility criteria for the Scheme on the SBCI website.
Speaking at the launch, Minister Humphreys said “Coming from a business background, I am acutely aware of the challenges that Brexit poses to firms. This €300 million Brexit Loan Scheme is one of a number of supports that the Government has put in place to help companies prepare.”
“The Scheme will provide much-needed finance to eligible business impacted by the UK’s decision to leave the European Union. I am confident that it will make a real difference to firms, enabling them to adapt, change and innovate. This, in turn, will help them to become more competitive, a fundamental trait in any resilient business”, Minister Humphreys added.
In last October’s budget, €14 million was secured by the then Minister for Business, Enterprise and Innovation, together with €9 million by the Minister for Agriculture, Food and the Marine, for the Brexit Loan Scheme. The Department of Agriculture, Food and the Marine’s share of funding ensures that at least 40% of the fund will be available to food businesses.
Minister Creed said “The Food Wise 2025 strategy outlines the agri-food sector’s unique and special position within the Irish economy and its potential for future growth. Brexit is obviously a significant challenge given our unique exposure to the UK market. Food businesses will need to focus on competitiveness and innovation in order to continue the growth in Irish agri-food exports, which reached a record €13.6 billion in 2017. I am pleased to launch this important Scheme today, for which my Department’s funding ensures that at least 40% of the €300 million will be available to food businesses.”
The Scheme will be open to eligible businesses with up to 499 employees from today, and has the potential to benefit over 5,000 companies.
Minister Donohoe said “I welcome the launch of the Brexit Loan Scheme, which I announced in Budget 2018. The Government recognises the importance of the SME sector to the Irish economy and the potential risks that Brexit will bring to this sector. This Scheme is designed to assist SMEs with their short term working capital needs, supporting them in preparing for the challenges that may lie ahead. It will give SMEs time and the financial support to make the necessary changes to help ensure that their businesses remain competitive so that they can continue to grow into the future.”
Earlier this year Ministers Humphreys, Creed and Donohoe signed a counter guarantee agreement backed by the European Commission through the European Investment Fund (EIF), which is part of the European Investment Bank Group (EIB), so that the €23 million secured in Budget 2018 can be leveraged to provide €300 million to Irish businesses affected by Brexit.
EIB Vice President for Ireland, Andrew McDowell, said “The Brexit Loan Scheme today demonstrates the European Investment Bank’s commitment to the Irish SME market and we are delighted to be partnering with SBCI in Ireland to target innovative Irish SMEs. This €300 million joint scheme with SBCI to address Irish companies’ working capital challenges, bears testament to the EIB Group’s strengthened support to enable new investment by thousands of companies across Ireland at a time of uncertainty relating to Brexit.”
The Scheme will be delivered by the SBCI. It’s CEO Nick Ashmore said “Today’s launch in conjunction with the European Investment Fund (EIF), Minister for Business, Enterprise and Innovation and the Minister for Agriculture, Food and the Marine, will provide support to enable eligible businesses impacted by Brexit to have the working capital needed to innovate and diversify, to find new markets, and to grow into the future. This is an important next step for the SBCI as it deploys further risk sharing capacity by building on the success of last year’s Agri Cashflow Support Scheme and the Credit Guarantee Scheme to enhance access to finance for Irish businesses.”
The new EIF support for business investment in Ireland is backed by the European Fund for Strategic Investments and the EU InnovFin Finance for Innovators programme. This Scheme is supported by the InnovFin SME Guarantee Facility, with the financial backing of the European Union under Horizon 2020 Financial Instruments and the support of the European Fund for Strategic Investments (EFSI).
About the Brexit Loan Scheme
The Brexit Loan Scheme, which was announced in the 2018 budget will provide affordable financing to businesses that are either currently impacted by Brexit or will be in the future. The Scheme, which will be delivered by the Strategic Banking Corporation of Ireland (SBCI) through commercial lenders will make €300 million available to eligible businesses with up to 499 employees at an interest rate of 4% or less.
- Loan amount from €25,000 up to a maximum of €1,500,000
- Loan term of up to 3 years
- Loans less than €500,000 will be unsecured
- Interest rate of 4% or less.
Loans can be used for:
- Future working capital requirements to fund innovation, change or adaption the business to mitigate the impact of Brexit.
This Scheme is supported by an agreement with the EIF, and SBCI have signed to support lending toward innovative small and medium-sized enterprises (SMEs) as well as small Mid-caps under InnovFin – EU finance for innovators, an initiative supported by the European Commission. This agreement allows SBCI to provide guarantees to lenders financing innovative companies in Ireland for a total of €300 million over the next two years with the support of a counter-guarantee provided by the EIF and backed under Horizon 2020, the EU Framework Programme for Research and Innovation. This is the first InnovFin SME counter-guarantee agreement in Ireland, enabling SBCI to enhance innovative companies’ access to funding at favourable conditions.
The European Investment Fund (EIF) is part of the European Investment Bank Group. Its central mission is to support Europe’s micro, small and medium-sized businesses (SMEs) by helping them access finance. EIF designs and develops venture and growth capital, guarantees and microfinance instruments which specifically target this market segment. In this role, EIF fosters EU objectives in support of innovation, research and development, entrepreneurship, growth, and employment. More information on EIF’s work under EFSI is available here.
About the Strategic Banking Corporation of Ireland (SBCI)
As Ireland’s promotional financial institution, the SBCI’s goal is to ensure access to lower cost longer term funding for Irish SMEs by facilitating the provision of:
- Lower cost funding to finance providers, the benefit of which is passed on to SMEs and which enhances competition in the SME lending market
- Risk-sharing and guarantees that enhance access to finance for SMEs and farmers and that address specific market failures
- Sourcing and delivering EU funding.
All of these elements create a more competitive and dynamic environment for SME finance. The SBCI is a vital part of the country’s financial architecture. By taking a fresh approach to providing access to lower cost finance for SMEs in Ireland, the SBCI is actively supporting the long-term potential of the sector to drive economic growth and create jobs.
About the Juncker Plan
The Investment Plan for Europe, the so-called “Juncker Plan”, is one of the European Commission’s top priorities. It focuses on boosting investments to create jobs and growth by making smarter use of new and existing financial resources, removing obstacles to investment and providing visibility and technical assistance to investment projects.
The European Fund for Strategic Investments (EFSI) is the central pillar of the Juncker Plan. It provides a first loss guarantee, allowing the EIB to invest in more, often riskier, projects. The EFSI is already showing concrete results. The projects and agreements approved for financing under the EFSI so far are expected to mobilise more than €194 billion in investments and support over 426,000 SMEs across all 28 Member States.
The InnovFin SME Guarantee Facility is established under the “EU InnovFin Finance for Innovators” initiative developed under Horizon 2020, the EU Framework Programme for research and Innovation. It provides guarantees and counter-guarantees on debt financing of between €25,000 and €7.5 million in order to improve access to loan finance for innovative small and medium-sized enterprises and small mid-caps (up to 499 employees). The facility is managed by EIF and is rolled out through financial intermediaries – banks and other financial institutions – in EU Member States and Associated Countries. Under this facility, financial intermediaries are guaranteed by the EU and EIF against a proportion of their losses incurred on the debt financing covered under the facility.