Government Outlines New SME Loan Scheme

06 May 2021 | 02.43 pm

Government Outlines New SME Loan Scheme

Brexit Impact Loan Scheme set to launch in H2

06 May 2021 | 02.43 pm

The Strategic Banking Corporation of Ireland is to lend up to €330m to help businesses continue to respond to Brexit and its effects.

The Brexit Impact Loan Scheme has been approved by government, with enabling legislation to follow immediately. It will be open to SMEs and small to mid caps (businesses up to 500 employees), including those engaged in farming and fishing. Loans will range from €25,000 to €1.5m and will be available for liquidity or investment purposes, as well as for refinancing specific forms of existing debt.

Loans will be for terms of one to six years with a discounted interest rate, and loans of up to €500,000 will be available unsecured.

The SBCI has invited interest from 0n-lenders to participate in the scheme.

SBCI interim chief executive Ian Black said: “The scheme is designed to assist businesses in dealing with the challenges presented by Brexit and the need to change or adapt their business models as a result. Today’s open call confirms the SBCI’s continued commitment to supporting SMEs as they emerge from the Covid-19 pandemic and adjust to a post-Brexit trading environment.”

Key features of the loans will be:

  • Loans range from €25,000 to €1.5m
  • Loan terms from one to six years
  • Loans of up to €500,000 unsecured
  • Can be used for: liquidity/working capital; investment; 100% refinancing of existing Brexit Loan Scheme loans; refinancing of 30% of new loans to cover refinancing of existing short-term credit, e.g., as arising due to Covid-19 impacts.

Business minister Leo Varadkar (pictured) added: “The Brexit Impact Loan Scheme will provide longer loan terms of up to six years for the SME sector, who continue to face the significant challenges of not only Covid-19 but also adjusting to Brexit.

“I am encouraging banks and non-bank lenders to apply to participate as part of the scheme. It is my hope that we can make the scheme available to Brexit impacted businesses through as wide a range of channels as possible.”

The scheme will provide an 80% guarantee to participating lenders on loans to Brexit-impacted businesses and will be underpinned by a counter-guarantee through the European Commission’s pan-European Guarantee Fund, which is managed by the European Investment Bank.

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