At least €120m affordable loans for food businesses
At least 40% of the €300 million Brexit Loan Scheme opened by the Government this week will be available to food businesses.
The 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. Minister for Business, Enterprise and Innovation, Heather Humphreys said: “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”.
“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
What are the loan conditions? >> The loans are at an interest rate of 4% or less.
The loan amount is from €25,000 up to a maximum of €1,500,000, and the loan term is up to three years.
Loans less than €500,000 will be unsecured Loans can be used for future working capital requirements to fund innovation or change, or adapt the business to mitigate the impact of Brexit. Finance Minister Paschal Donohoe said the loan scheme is designed to assist small to medium enterprises (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.”
SBCI CEO Nick Ashmore said the scheme will help businesses impacted by Brexit to have the working capital needed to innovate and diversify, to find new markets, and to grow into the future.
How do businesses apply to take part?
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 Strategic Banking Corporation of Ireland (SBCI) website.
What businesses can take part?
>> The scheme is open to eligible businesses with up to 499 employees.
How did the scheme come about?
>> It is supported by the Government’s counter guarantee agreement backed by the European Commission through the European Investment Fund (EIF), which is part of the European Investment Bank Group, so that €14m secured by the then Minister for Business, Enterprise and Innovation in last October’s budget, and €9m by the Minister for Agriculture, Food and the Marine, can be leveraged to provide €300m to Irish businesses affected by Brexit. SBCI have signed up to support lending toward innovative SMEs) as well as small mid-caps, under InnovFin (EU finance for innovators supported by the European Commission).
This agreement allows SBCI to provide guarantees to lenders financing innovative companies in Ireland for a total of €300m 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 Scheme is administered for both Departments by SBCI.
Agriculture Minister Michael Creed said: “I am pleased to launch this important scheme today, for which my Department’s funding ensures that at least 40% of the €300m will be available to food businesses. The Food Wise 2025 strategy outlines the agrifood 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.”
At the Liffey Trust in Dublin’s inner city to launch the €300m Brexit Loan Scheme for businesses, from left, Gavin Prendergast, Urban Picnic; Nick Ashmore, CEO, SBCI; Agriculture Minister Michael Creed; Business Minister Heather Humphreys; and Finance Minister Paschal Donohoe.