March 2018 start date for new Brexit loan scheme - here's everything you need to know

The Minister for Agriculture, Food and the Marine, Michael Creed, in partnership with An Tánaiste and Minister for Business, Enterprise and Innovation, Frances Fitzgerald, has secured budget funding for a new Brexit loan scheme which will provide affordable financing to Irish businesses that are either currently impacted by Brexit or will be in the future.

Who will deliver the Brexit loan scheme?

The new scheme will be delivered by the Strategic Banking Corporation of Ireland (SBCI), through commercial lenders, to get much-needed working capital into Irish businesses.

How big is the scheme?

The new Brexit loan scheme aims to make up to €300m available to businesses with up to 499 employees at a proposed interest rate of 4%.

Who can apply?

The scheme is open both to state agency clients and those businesses that do not have any relationship with state agencies.

How does it compare with normal loans?

The finance will be easier to access, more competitively priced, and at more favourable terms than current offerings.

Why is the scheme of interest to the agri-food industry?

The Department of Agriculture, Food and the Marine share of funding ensures that at least 40% of the fund will be available to food businesses.

Both departments are also exploring the development of a longer-term “business investment scheme”, which would focus on business development to support enterprises in investing strategically for the post-Brexit environment.

Is the scheme open to primary producers?

Due to state aid rules, the scheme will not be available to farmers and fishermen. An alternative scheme for primary producers in the agriculture sector and fishermen is under consideration by the Department of Agriculture.

What will be the terms of the scheme?

Proposed terms include a 4% maximum interest rate (participating lenders may compete below this level). Terms and conditions will be designed to ensure the loans are accessible.

The loans will be for up to three years.

The fund will run for two years. Applications will be cleared for scheme eligibility through the SBCI.

To be eligible, applicants must:

  • Be exposed to the (current or potential) impacts of Brexit.
  • Submit a business sustainability plan which demonstrates that they plan to adapt/innovate/change in response to Brexit (further documents may also be required).
  • Loans must be for the purpose of supporting working capital or cashflow needs.

    Loans will then be provided by commercial lenders, subject to normal lending criteria.

    Where does the funding come from?

    The scheme, through a combination of State and EU guarantees, will leverage up to €300m of lending to Irish enterprises at a proposed interest rate of about 4%, at a cost to the exchequer of €23m.

    This includes €14m provided by the Department of Business, Enterprise and Innovation, and €9m provided by the Department of Agriculture, Food and the Marine.

    What is the timeline for the scheme?

    Further details of the loans will be provided over the coming weeks.

    The scheme is expected to be in place in March, 2018.

    It is anticipated that the scheme will remain open until March, 2020.

    Are other such schemes in place?

    The Department of Business, Enterprise and Innovation has a number of other finance for growth schemes in place, and applications can be made at any time to the existing Credit Guarantee Scheme and Micro Finance Ireland. Brexit Loan Scheme

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