Explainer: What is the Brexit Impact Loan Scheme?

A guide to the new SBCI Brexit Impact Loan Scheme for Irish businesses.

Ireland’s Brexit Impact Loan Scheme aims to provide affordable medium-term financing to Brexit-impacted Irish businesses, including those in sectors such as manufacturing, retail, hospitality, agriculture and seafood, to name a few.

Here’s what you need to know:

Who is delivering the Brexit Impact Loan Scheme?

The scheme is delivered by the Strategic Banking Corporation of Ireland (SBCI) through commercial lenders, including Bank of Ireland.

How much funding is available?

The fund will make up to €330m available to eligible SMEs, small mid caps and primary producers.

What are the terms of these loans?

The loans range from €25,000 up to €1.5m and each loan can range from one to six years in duration.

Okay, so what’s the key difference between these and traditional loans?

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 80pc 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, which is managed by the European Investment Bank Group.

Right, and what can these loans be used for?

You can use these loans to boost liquidity and working capital, to invest in new products and services and refinance existing Brexit Loan Scheme loans. In addition, 30pc of new loans can be used to cover the refinancing of other non Brexit Loan scheme debts.

A good example of potential use of such loans could be a farm or agribusiness looking to diversify their product offering to grow sales both locally as well as exports overseas.

What is the SBCI?

The SBCI was established in September 2014 following Ireland’s exit from the EU/IMF programme, to ensure that businesses could access funding when the private sector could not or would not provide funding. Today, the SBCI aims to help SMEs grow, innovate and prosper, leading to a better economy for all.

By taking a fresh approach to providing access to lower cost finance for SMEs in Ireland, the SBCI is actively supporting the long-term potential of the sector to drive economic growth and create jobs.

ThinkBusiness.ie, powered by Bank of Ireland, has been created for Irish business owners and managers who are seeking information, resources and help on a range of business topics. It provides practical, actionable information and guidance on starting, growing and running a business.