A New Brexit Loan Scheme is set to be launched in the coming weeks, the government has announced.
The planned scheme was announced yesterday (Thursday, May 6) by Tánaiste and Minister for Enterprise Trade and Employment Leo Varadkar; Minister for Agriculture, Food and the Marine Charlie McConalogue; and Minister for Finance Paschal Donohoe.
The ministers are calling on financial providers to take part in the new Brexit loan scheme, which will be administered by the Strategic Banking Corporation of Ireland (SBCI).
The scheme will be funded up to €330 million, and will be open to small and medium enterprises (SMEs) and small ‘mid-caps’, including farmers.
The scheme is legislated for under the Loan Guarantee Schemes Agreements (Strategic Banking Corporation of Ireland) Bill 2021, which was published yesterday.
It is expected that loans under the scheme will range from €25,000 to €1.5 million and will be available for liquidity or investment purposes, as well as for refinancing of specific forms of existing debt.
Loans will be for terms of one to six years with a discounted interest rate, and loans of up to €500,000 will be available unsecured.
The scheme will provide an 80% guarantee to participating lenders on loans to Brexit-impacted businesses and will be underpinned by a counter-guarantee through the European Commission’s pan-European Guarantee Fund.
Speaking yesterday, Minister McConalogue said: “Access to finance is a critical need. This scheme will deliver important support to farmers, fishers, food businesses and to businesses generally as we seek to ensure that their ongoing viability will not be hindered by a lack of suitable finance.”
Minister Varadkar noted: “The pandemic has masked the effects of Brexit. We don’t really know yet how much of the trade impact has been caused by Brexit and how much by the virus.
He added: “Businesses will continue to need help as the situation unfolds and especially when Britain introduces its border and customs controls later this year.
“Today, through SBCI, we are inviting all financial providers, banks and credit unions to take part,” the Tánaiste said.