19 Feb 2018 | 02.30 pm
Big Plans For Your Small Business? SBCI Helps You Fund Them
SMEs have benefited from almost €1bn in SBCI-supported finance to date
19 Feb 2018 | 02.30 pm
The SBCI (Strategic Banking Corporation of Ireland) has been making a real difference to Irish SMEs for three years. When we were set up we had a clear mandate in the wake of the financial crisis to enable access to flexible funding for Irish SMEs, writes Nick Ashmore, CEO of the SBCI
Channelling Lower Cost, Flexible Finance
As Ireland’s first promotional institution, we are not a retail bank. Instead, we act as a conduit for lower cost finance from domestic and European sources to banks and non-bank providers servicing the Irish SME market. SMEs have benefited from almost €1bn in SBCI-supported finance to date and we plan to keep growing this.
The SBCI’s seven on-lender partners have so far provided over 23,000 Irish SMEs with lower-cost SBCI loans. The loans are appealing to almost every sector of the SME market and all across the country.
Currently, we offer the following range of loans via our lenders:
- Working capital
- Leasing & HP
- Invoice discounting.
2017 saw the hugely successful launch of our low-cost flexible agriculture loan, which provided cashflow support for farming enterprises at a special low rate of 2.95%. This was heavily oversubscribed.
SBCI loans deliver cash-flow advantages – lower cost and longer repayment periods. Businesses have benefited from an average of 1.15% reduction in interest rates for loans.
Bringing non-bank lenders into the market is a way of driving competition and has meant that we can provide more niche loan products based on market needs and addressing gaps for SMEs.
Promoting Sensible Borrowing
We continue to promote awareness of our loans and encourage all businesses to consider the value of availing of lower interest rates and greater flexibility. Businesses in Ireland are understandably either reluctant to borrow or have faced barriers to borrowing following the financial crisis. Essentially, our message has been that sensible borrowing (seeking out low costs and shopping around) can be a smart way to realise ambitious growth plans.
Through the conversations with SMEs we have at the many events we attend throughout the year, we hear about key business issues impacting the growth of our indigenous businesses, in particular concerns about the effects of Brexit. These conversations are crucial, as they serve to inform the future product development and support delivered by the SBCI.
In 2017, we enhanced our range of loans and lenders significantly and launched our first risk-sharing initiative.
This is hugely important because it allowed us to help a category of SMEs that was experiencing difficulty in accessing finance. Through risk-sharing, we made it easier for these SMEs to borrow.
Our recent new mandate in managing the Credit Guarantee Scheme, in addition to the roll-out of the recently announced Brexit Loan Scheme, will see us expand the role we play in supporting Irish SMEs to access credit in areas where it can help the most.
Photo: Nick Ashmore, CEO, Strategic Banking Corporation of Ireland (SBCI)