SBCI and GOVERNMENT SME LOANS

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Nigel Warner
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1 SBCI and GOVERNMENT SME LOANS Information Memorandum Make a Better Decision

SBCI OVERVIEW The SBCI (Strategic Banking Corporation of Ireland) is a SME funding company whose goal is to offer flexible products with longer maturity and capital repayment flexibility, lower cost

2 SBCI OVERVIEW The SBCI (Strategic Banking Corporation of Ireland) is a SME funding company whose goal is to offer flexible products with longer maturity and capital repayment flexibility, lower cost funding in contrast to financial instructions and enable new entrants to access SME lending market. The SBCI is funded by European Investment Bank (EIB), Kreditanstalt für Wiederaufbau (KFW the German promotional bank) and Ireland Strategic Investment Fund (ISIF).

3 Funders ISIF EIB KFW Other Potential Funders The Strategic Banking Corporation of Ireland Current Retail Banks in Ireland New Entrants to the SME Lending Market

4 1INVESTMENT and WORKING CAPITAL LOANS Background SBCI can provide short term finance at low interest rates up to 2 years, with maximum loan amounts reaching 5 million. SBCI can offer the following products, subject to the financial institutions own credit policies and procedures. Discounted Interest Rate Loan SBCI can offer loans at interest rates as low 5%. Repayment Flexibility SBCI can offer flexible repayment plans commencing 12 months after drawdown. Working Capital Loan SBCI can offer rates at 4.5%, as appose to typical overdraft rates of 7.85%. Investment Loan for SME Generation Change facilitate the transfer of shareholding on the retirement of business owner. Excluded Activities Finance for the establishment and operation of a distribution network outside of Ireland Finance of pure real estate development activity Finance of activities constituting pure financial transactions Loans to undertakings in difficulty Finance of activities forbidden by law Agriculture, aquaculture and fisheries loan Refinancing existing loans Aid the acquisition of road freight transport

2REFINANCE of EXISTING BANKS Background This product aims to facilitate SMEs who have existing bank loans with other providers, which are exiting the Irish market.

5 2REFINANCE of EXISTING BANKS Background This product aims to facilitate SMEs who have existing bank loans with other providers, which are exiting the Irish market. Examples can include: ACC Bank, Danske Bank, Lloyds / Bank of Scotland Ireland, Irish Nationwide / Anglo Irish Bank / IBRC. Lower interest rates Loan amounts up to 5m Minimum loan maturity of 2 years Loans may also cover investment and working capital purposes Excluded Activities See excluded activities for Investment and Working Capital Loans

6 3AGRICULTURE INVESTMENT LOANS Lower interest rates Loan amounts up to 5m Minimum loan maturity of 2 years Loans may also cover investment and working capital purposes Repayment schedule flexibility Loan maturity of up to 10 years Facility maturity tailored to correspond with investment life cycle Excluded Activities Finance of specific export operations, or finance contingent upon the use of domestic over imported products. In particular, it should not apply to financing the establishment and operation of a distribution network in other States, or current expenditure linked to the export activity. Loans to support investments required to comply with EU standards in force. Loans to an undertaking which is subject to an outstanding recovery order following a previous Commission Decision declaring an aid illegal and incompatible with the internal market. Loans to undertakings in difficulty. Loans to support the purchase of production rights, payment entitlements and annual plants. Loans to support the planting of annual plants. Loans to support drainage works. Loans to support the purchase of animals. Loans to acquire land.

4LEASING and HIRE PURCHASE Background SBCI offers flexible asset finance funding solutions for SMEs looking to finance non-current assets. Lease terms are usually between 2 to 5 years.

7 4LEASING and HIRE PURCHASE Background SBCI offers flexible asset finance funding solutions for SMEs looking to finance non-current assets. Lease terms are usually between 2 to 5 years. Lease terms over 2 5 years Fixed monthly / quarterly rental Maintenance package available V.A.T. deductible where applicable 5 INVOICE Background FINANCING Funding of up to 5m with minimum facility period of 24 months to avail of the lower SBCI rates.

8 6SBCI AGRICULTURE CASHFLOW SUPPORT LOAN SCHEME Background This scheme aims to support farmers experiencing short term financial pressure due to price volatility. Up to a maximum loan amount of 150,000 per farm enterprise Loan term of minimum 1 year up to a maximum of 6 years Loans are unsecured Optional interest only repayments provided at the start of the loans Interest rate of 2.95% fixed for the term of the loan Excluded Activities In financial difficulty (excluding short-term cashflow pressures caused by the current market conditions) Is bankrupt or being wound up or having its affairs administered by the courts in the last 5 years has entered into an arrangement with creditors, in the context of being bankrupt or wound-up or having its affairs administered by the courts Convicted of an offense concerning professional conduct by judgement, fraud, corruption, involvement in a criminal organisation, money laundering or any other illegal activity where such illegal activity is detrimental to the European Union s financial interests Engaged in solely forestry, aquaculture or equine related activities

9 7 BREXIT Overview LOAN SCHEME On the 10th of October 2017, Mr Paschal Donohoe announced the establishment of a BREXIT Loan Scheme for SMEs. This fund of circa 300m will aim to give SMEs time to put in place the necessary changes to help their business grow into the future. In addition to this the Minister announced the allocation of a further 25m to provide assistance to the agri-food sector in response to BREXIT. Further details in relation to this BREXIT Loan scheme will be published in the upcoming Finance Bill. SME CREDIT GUARANTEE SCHEME Overview The scheme was set up as government initiative to encourage lending to SMEs who fall below the parameters of normal bank lending criteria, and are unable to obtain new or additional facilities from their bank. The scheme facilitates new lending by providing banks with a guarantee for 75% of the facility value. Facilities from 10,000 up to 1m Terms of up to 7 years Term Loans, Demand Loans and Performance Bonds Who Qualifies Entities involved in a commercial activity Are a sole trader, partnership, franchise, co-operative or limited company In the lender s opinion the business has a viable business proposal

10 Cooney Carey The Courtyard, Carmanhall Road, Sandyford, Dublin 18, Ireland t +353 (0) f +353 (0) e info@cooneycarey.ie

SBCI Brexit Loan Scheme Funding Working Capital

SBCI Brexit Loan Scheme Funding Working Capital 1 SBCI Brexit Loan Scheme Supporting Brexit impacted SME s to innovate and adapt with low cost accessible funding. The SBCI Brexit Loan Scheme is offered