SBCI Brexit Loan Scheme: Open for Applications
The uncertainty triggered by Brexit is a significant concern for SMEs. While the final outcome of the process remains unclear, it is likely that, in responding to the challenge, many firms will require extra resources, be that in the form of people, capital equipment, materials, or access to increased finance.
Enterprise Ireland has worked with the Department of Business, Enterprise and Innovation on the introduction of a €300 million Brexit Loan Scheme, to help eligible Irish companies secure the resources they need. The scheme, operated by the Strategic Banking Corporation of Ireland (SBCI), will provide SMEs with the support required to implement changes as they prepare for Brexit, enhancing overall business resilience, whatever developments may occur.
The fund can be used to support new working capital requirements and the development of business plans to mitigate Brexit-related risks. With Brexit preparations also presenting opportunities for Irish business, the fund can be used to, for example, assist companies to diversify into new markets.
Loans cannot, however, be used to refinance businesses in financial difficulty or for the refinancing of existing debt.
Brexit Loan Scheme Features
The fund offers SMEs access to affordable lending, with rates comparable to those available across Europe. Here, SMEs are defined as independent businesses with turnover of less than €50m, and fewer than 250 employees.
Loan amounts of between €25,000 and €1.5 million are available per eligible enterprise, with terms ranging from one to three years. Companies will be interested to learn that, for loans up to the value of €500,000, security and personal guarantees are no longer required, previously a barrier to accessing finance.
The maximum rate of interest on loans is 4%. In some cases, optional interest-only repayments are available in the early stages of the loan.
For an overview of the scheme, including details of all key features, visit the SBCI website.
How to Apply
The application process for the scheme involves two stages. During the first stage, the SBCI will perform an initial eligibility check. If deemed eligible, enterprises progress to the second stage, which involves a credit assessment by the participating lending institutions (currently Bank of Ireland, Ulster Bank, and AIB).
Companies must provide a separate business plan when applying for a loan under the scheme. The process is straightforward and the SBCI has a very useful template with tips on what should be included.
Interested companies should note that the eligibility application form requires a declaration on state aid. If you would like help in defining the state aid received from Enterprise Ireland, please contact your Development Advisor or the Brexit Unit can help you to find the right point of contact.
Enterprise Ireland encourages all interested companies to first undertake a thorough financial review of your funding needs and to prepare the business plan you will need to present to participating lending institutions. When considering choice of lenders, SMEs should review all of the options in the market to ensure that they get the best rate available, remembering that the interest rate offered cannot exceed 4%.