SBCI lending totals €45m

More than 1,600 small- and medium-sized businesses have drawn down a combined €45m from the Strategic Banking Corporation of Ireland in its first four months in operation.

The Government-backed fund, which also includes significant investment from the European Investment Bank and German promotional bank, KfW, has seen strong demand for its services since being launched to much fanfare in March.

Almost 90% of the loans, which are initially available through AIB and Bank of Ireland, have been drawn down for investment purposes while almost a third have gone to agricultural firms.

The remaining 10% of the funding is to be used for refinancing loans held with banks exiting the Irish market (€1.7m); and as working capital (€3.9m).

“The SBCI has made an excellent start. We are very encouraged to see almost €45m of loans approved and drawn down by SMEs since March, a third of which has been accessed by the agricultural sector,” said SBCIchief executive, Nick Ashmore.

The South-West of the country has seen the highest take-up, accounting for a fifth of loans, followed by Dublin and West (both 15%) and the Mid-West (13%). The SBCI’s product offerings include:

• SBCI SME Investment and Working Capital Loan which includes a discounted interest rate and loan amounts up to €5m for up to 10 years.
• Loans to refinance those SMEs whose current bank loan facilities originated with banks which are exiting the Irish market.
• SBCI Agriculture Investment Loan which supports SMEs involved in primary agriculture production; and the processing or marketing of agricultural products.

AIB distributes SBCI funds at a flat rate of 4.5% while Bank of Ireland also passes discounts onto customers, offering rates ranging from 3.7% to 6.34%.

Welcoming the figures, Finance Minister Michael Noonan said he was delighted with SBCI’s progress which is “underpinning and strengthening the economic recovery underway nationally”.He added that SBCI is actively developing relationships with other banks and non-bank finance providers to broaden range and profile of SME finance providers.