New €300m Future Growth Loan Scheme for SMEs
A new loan scheme for SMEs and farmers will see €300m being made available for them to support their strategic long-term investment plans after Brexit.
SMEs will be able to apply for loan eligibility through the Strategic Banking Corporation of Ireland from April 17.
Three finance providers – AIB, Bank of Ireland and KBC – are participating in the scheme, while negotiations are ongoing with another two.
The scheme, which is delivered in partnership with the EIB Group and the European Commission, was first announced in Budget 2019.
The Government said it was urging businesses to use the next three weeks to start preparing their proposals for long-term capital investment.
The loan scheme will make €300m available to eligible businesses with up to 249 employees at an interest rate of 4.5% or less for loans up to €249,999 and 3.5% and less for loans greater than or equal to €250,000.
Launching the scheme, the Minister for Business, Enterprise and Innovation, Heather Humphreys, said that with Brexit on the horizon, investment in innovation and diversification has never been more important.
“Even if firms are unsure if they will draw down a loan, it’s a good idea to have approval in place in case it’s something they need down the line. Notwithstanding the uncertainty that comes with Brexit, it’s better to be safe than sorry,” the Minister stated.
The Minister for Agriculture, Food and the Marine, Michael Creed, said the new scheme is a long-awaited source of finance for young and new farmers, especially those who do not have high levels of security.
Minister Creed also said it will also serve smaller-scale farmers, who often do not have the leverage to negotiate for more favourable terms with their bank.
He added that food companies have identified long term investment finance of up to ten years as a critical need which is currently unavailable in Ireland.
Food Drink Ireland, the Ibec group representing the food and drink sector, has welcomed news of the €300m loan scheme.
Paul Kelly, FDI Director, said that the lack of long-term investment financing has been a critical issue for food companies and farmers.
“This welcome development will make it more feasible for companies to invest in enabling technology, plant renewal and expansion, refinancing, market development and innovation, particularly in a post Brexit environment,” he added.
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