AIB has confirmed that many farmers are eligible for its 4.5% interest rate new funding of €200m for Ireland’s small and medium enterprises .
The bank is cutting 2% off its standard variable business loan rate, for this Strategic Banking Corporation of Ireland (SBCI) credit support for the SME market.
AIB has secured funding from the SBCI, which will provide a discount of up to 1%, which will be matched by AIB.
“The funding is available to SMEs for working capital loans and investment loan purposes. I would particularly like to thank the SBCI for its efforts in ensuring that many farmers are also eligible for this fund,’’ said AIB’s director of retail and business banking, Bernard Byrne.
“Individual loans of up to €5m will be available under the scheme.”
The new loan fund will be available in AIB branches, business centres, and over the phone, from March 9, subject to eligibility, normal lending criteria, terms and conditions. Loans from the fund will have a minimum term of two years and a maximum term of ten years.
The Government approved the establishment of the SBCI in May 2014 to enhance the supply of credit, via on-lenders such as Ireland’s main banks.
The SBCI is financed by Kreditanstalt für Wiederaufbau (KfW) of Germany, the European Investment Bank, and the Irish Strategic Investment Fund, with an initial fund of €800m.
Finance Minister Michael Noonan welcomed the decision by AIB to match the discount offered on the €200m that the bank is drawing down from the SBCI.
“The core purpose of the SBCI is to enhance the supply of credit to SMEs by offering its €800m in funding to institutions known as ‘on-lenders’. These on-lenders, which may be banks such as AIB or other organisations that have capital and the ability to assess SME loan proposals, can then lend the money on to businesses,’’ the minister said.
© Irish Examiner Ltd. All rights reserved