European Investment Fund Agreement Bill 2018 [Seanad]: Second Stage

I move: "That the Bill be now read a Second Time."

I welcome this opportunity to present the European Investment Fund Agreement Bill 2018 to the House. This short technical Bill will enable the Minister for Business, Enterprise and Innovation and the Minister for Agriculture, Food and the Marine to enter into agreements with the European Investment Fund, known as the EIF, to facilitate access to finance for qualifying enterprises.

The new future growth loan scheme was announced in the budget as part of the Government's response to Brexit, and enactment of this Bill will allow us to launch the scheme in early 2019. The future growth loan scheme will be an important support for Irish businesses throughout the country that are facing challenges arising from Brexit. It will be available to SMEs, including those in the primary agriculture and the seafood sector.

To bring this loan scheme to the Irish market in early 2019, it is imperative that we as Ministers are granted the necessary powers to enter into the agreement with the EIF this year, which includes providing the necessary Exchequer funding. This scheme is an important component of the Government's Brexit mitigation measures for businesses as it will provide businesses with the opportunity to borrow for periods between eight to ten years to support long-term capital investment. The tenure of borrowing currently available on the market for SMEs is typically anywhere from three to seven years. The future growth loan scheme has been developed to address a gap in the market for longer-term loans up to ten years. It will support those enterprises that wish to invest and diversify their business by ensuring they have appropriate and affordable financing available to them. This in turn will fuel future economic growth in our important indigenous sectors by helping them to remain competitive. Given the particular exposure of the food sector to Brexit, the scheme, which will be 40% funded by the Minister for Agriculture, Food and the Marine, will also be available to primary producers.

To unlock the EIF counter-guarantee, which will be used to leverage funding of up to €300 million for the future growth loan scheme, the Department of Business, Enterprise and Innovation and the Department of Agriculture, Food and the Marine will collectively contribute €62 million in Exchequer funding over a five-year period. This counter-guarantee with the EIF is a bespoke agreement, which is wider in scope than those available through the European Commission and offers 64% risk cover rather than the standard 40%. It represents the first time that the Ministers have entered into such an agreement, although there is the potential for further such agreements in the future if needed. The Attorney General has advised that primary legislation is needed to provide the necessary powers to both Ministers to enter into such an agreement. The Department of Agriculture, Food and the Marine will contribute 40% of the loan fund on the basis that it is anticipated that at least 40% of the scheme will be used by food businesses and primary producers. The remaining 60% will be channelled through the Department of Business, Enterprise and Innovation's Vote in 2018 and subsequent years.

I will now go through the heads of the Bill. Section 1 defines the relevant Minister as the Minister for Business, Enterprise and Innovation or the Minister for Agriculture, Food and the Marine as they are the Ministers entering into the agreement with the EIF for the future growth loan scheme.

Section 2 provides the Minister for Business, Enterprise and Innovation and the Minister for Agriculture, Food and the Marine with the power to enter into agreements with the EIF with the consent of the Minister for Finance and the Minister for Public Expenditure and Reform. This includes providing the necessary financial contribution from the Irish Exchequer and limiting this to an aggregate total of €75 million should the Ministers wish to implement additional schemes concurrently. It also includes the discharge of any additional fees and expenses. Definitions of qualifying enterprise, SME and small mid-cap are also referenced here.

Section 3 provides for a review of the operation of the Act four years after its passage. Section 4 provides that expenses incurred in the administration of the Act be paid out of moneys provided by the Oireachtas. Section 5 provides for the Short Title and the commencement provision.

This short Bill is important as it will allow the Minister for Business, Enterprise and Innovation and the Minister for Agriculture, Food and the Marine to enter into an agreement with the EIF to implement the future growth loan scheme, which is a critical component of the Government's response to Brexit. Essentially, the future growth loan scheme is a longer-term Brexit loan scheme. If we want to ensure our businesses throughout the country succeed and prosper in the face of fundamental challenges like Brexit, it is essential that we take the necessary steps to ensure appropriate financial supports such as this scheme are in place for businesses. I look forward to hearing Deputies' contributions.

We will be supporting the Bill and will do everything to ensure it passes smoothly through the parliamentary process. We welcome the fact that we are putting in place funds for small and medium-sized businesses in both the business and agriculture sectors to allow them to access loans to fund working capital projects.

We all know that there is grave uncertainty, primarily as a result of Brexit, the America First policy, tariffs and potential trade wars and all that flows from them. Uncertainty is the barrier to investment. It diminishes people's business confidence and very quickly access to credit dries up. People cannot invest and there are difficulties in maintaining growth in individual companies and the broader economy. This fund, therefore, is very welcome.

In the coming months we will be trying to ensure we are as Brexit-proofed as possible. There are uncertainties beyond our control. We are waiting for Westminster to decide on the Prime Minister, Mrs. May's proposals. We do not know if they will be successful in the short or medium term, but what we do know is that there will not be many upsides to Brexit for Ireland. We can start planning and ensuring support for small and medium-sized businesses that are dependent on the export market, primarily to the United Kingdom but also farther afield.

Diversification is critically important. Companies need to be weaned off their dependence on the UK market because of proximity and language; they need to look farther afield into the eurozone and beyond. All of these things will take time, planning and effort. I know that Enterprise Ireland and others are continually supporting that process. Credit is a critically important component for any organisation that is trying to expand and open up new markets for its products. That is something about which I would be concerned. It seems that we have not been able to encourage enough companies to look beyond immediate markets and diversify, as is the policy. Providing supports for companies, through Enterprise Ireland and others, will be a necessary component in ensuring that process continues.

The European Investment Fund was established because of the credit crisis and the fact that small and medium sized businesses were unable to access credit in the traditional forms through banks. I am concerned that the risk has shifted from the pillar banks back to the use of these funds again. It should be additional funding, not replace what the pillar banks should be funding. We must be able to monitor what is happening in the short and medium term. The Minister for Agriculture, Food and the Marine and the Minister for Business, Enterprise and Innovation will have statutory powers to enter into agreements to draw down loans. The Strategic Banking Corporation of Ireland will assess individual applicants to see whether they are suitable and I assume they will then make an application through the pillar banks or the financial institutions participating in the scheme. That is the issue about which I have concerns. The participating lending institutions to which applicants will go are the same ones with which they would be doing business in the traditional manner. I do not want to see a situation where banks will start to lend money through this scheme but squeeze the credit they should be lending to their clients. It must be additional funding; it cannot be replacement funding.

We are subservient to the lending institutions and I am consistently critical of the pillar banks. They are simply not engaging meaningfully to try to address the credit challenges for small and medium-sized businesses and in the broader economy. I have continually referenced the fact that interest rates in Ireland are completely out of kilter with those charged across the eurozone. Interest rates are 5% and 6% to fund a small or medium-sized business in Ireland. Businesses in the eurozone can access loans for much less. The pillar banks are consistently gouging the economy, day in and day out, and we have done nothing about it. They will continue to gouge and profiteer on the backs of small and medium-sized businesses. They are also doing it in the mortgage market and we are subservient to them. We accept it, nod and gracefully allow them to continue. We then go to the established European Investment Fund to borrow from it and allow the pillar banks to disperse the funding, unless I am misreading the Bill. We must insist, through whatever mechanism is required, on this being additional funding. In other words, it is to fund the higher risk elements and the pillar banks should fund the lower risk elements, but I can guarantee that they will fund their clients through this fund. They will replace the funding, which is not good enough.

The Minister only needs to look at previous funds that were made available through the pillar banks to small and medium-sized businesses and the agriculture sector. That is what they did. They lent to people who were very low risk, their immediate clients and had a good client base. People who actually needed working capital and those with cashflow difficulties who needed short-term loans could not access funds. There has to be some independent assessment of a refusal. The Strategic Banking Corporation of Ireland states whether a client is suitable. The client then makes an application to the relevant financial institution, but if the client already has an application for funding through the pillar bank, I would be very disappointed if that funding was replaced. I hope the Minister will bring clarity to the matter and insist on it not being replacement funding.

How Brexit ready are we? In looking at the applications under the various schemes available we have to acknowledge that businesses have been slow enough in taking up some of them. For example, there were 307 applications received under the Brexit loan scheme, of which 270 were approved by the Strategic Banking Corporation of Ireland, while 54 progressed to sanction at bank level, to a value of €12.5 million. To say the very least, that is a fairly high refusal rate. Enterprise Ireland has an online platform for Irish companies to self-assess their level of exposure to Brexit - the Brexit scorecard. A total of 3,332 Brexit scorecards have been completed, including by 502 local enterprise office clients. That is a reasonable effort, but, when looked at in the overall context of the number of Enterprise Ireland clients, it could be a lot better.

The Enterprise Ireland Market Discovery Fund, a support for Enterprise Ireland clients to research new markets, has seen 166 projects approved. The fund was launched in 2018 and the level of expenditure to date is about €165,000. Again, in the overall context, 166 projects is a small number. We must acknowledge that we are an exporting nation. As we trade in open markets, we have to be lean, agile and responsive to market demands. With Brexit as the backdrop, we must be able to respond. Some of the application processes for the various schemes which are all good discourage people. The most feared words in the English language are: "I am from the Government and I am here to help." To a certain extent, it is a bit like that. The application forms discourage small and medium-sized businesses from applying. We should look to simplify them as much as possible, while ensuring the taxpayer is protected at all times. We need to ensure applicants are not discouraged by an avalanche of form-filling and administrative burdens.

When Brexit is finally decided over the coming months, regardless of whether the withdrawal agreement is accepted, we will have to contend with another major step when we enter into the next phase of our trading relationship with the UK and the EU. One thing we know for certain among the grave uncertainty of Brexit itself is that if the UK does not decide to retreat from its present pathway by staying within the EU, there will be a different trading arrangement between the UK and the EU and therefore between the UK and Ireland. We need to be conscious of that as well.

This issue might be slightly outside the scope of the Bill, but it needs to be considered anyway. I have been trying to explain it. Maybe I am not explaining it in a way that people can comprehend or understand. Our common travel area with the UK precedes our membership of the EU. It is part and parcel of the political, cultural and social set-up between the Republic of Ireland and the UK for many historical and political reasons. Many of these arrangements are ad hoc in the sense that they do not have any statutory underpinning. If and when the UK withdraws from the EU, free movement of people will become an issue for the UK and the EU. Our common travel area with the UK will remain. This means, in effect, that we will be in the same labour market as two entities. We will be in the same labour market as the EU by virtue of our membership of the Union. We will be in the same labour market as the UK by dint of having a common travel with the UK.

One of the areas in which this will be a matter of concern is the health system. Both Ireland and the UK have major shortages of skilled labour in their health services. When the UK withdraws from the EU, it will not have access to the EU labour market pool, but it will continue to have access to the Irish labour market pool. There needs to be a critique and an analysis of this issue over the next short period. We already have massive labour shortages across whole swathes of the economy in various sectors, including agriculture and high-end finance. Many parts of our public service are under pressure because we are unable to recruit consultants, doctors, psychologists, speech and language therapists and occupational therapists, etc. The labour market in the UK is facing the same challenges. Until recently, the UK was able to fill vacancies because it was part of the EU labour market. As that changes, the UK could very well look at the labour pool in the Republic of Ireland. We could be in direct competition with the UK as we try to retain workers in our economy. We are already under pressure. I would like the Government to look at that.

The changes I have mentioned could have a profound impact on SMEs. If we start to haemorrhage labour, the shortage of labour will undermine our competitiveness. In such circumstances, difficulties associated with the cost of exporting into a weaker sterling zone will arise immediately. All of these issues have the potential to have knock-on effects on the competitiveness of SMEs. While the loan scheme for working capital that is being proposed is welcome, we need to be able to assess the various potential risks that Brexit poses for the Irish economy, including the risks for the export market and internal risks like the impact on this country's labour market. For all of these reasons, I emphasise that everything we do should be done with potential risks very much to the fore of our minds.

I do not need to go through the technicalities of the Bill that have been outlined by the Minister of State. The Irish pillar banks were saved by acts of Dáil Éireann like the bank guarantee and the legislation that was passed here to underpin it. We threw them a lifeline. We saved AIB and we shored up Bank of Ireland at great cost to the taxpayers and people of the State. They are not repaying us in the way they conduct their daily affairs in almost every branch they occupy throughout the State. The variable mortgage rate is twice the European average. The interest rates available to SMEs are twice the European average, if not more. Even though we are in a common currency zone under the European Central Bank in Frankfurt, our banks are consistently pillaging us. The most amazing aspect of this is that the banks regularly announce to great fanfare that their profits have increased. It is easy for them to increase their profits when their customers are slaving away in the workplace morning, noon and night to pay for overpriced mortgages and business loans. If nothing else is done, this issue should be addressed, at least.

The ideal scenario, regardless of the arrangements that are put in place under the European Investment Fund, is for our banks to step up to the plate and be competitive. They need to be able to assess loans, make lending provisions and charge reasonable interest rates, rather than the extortionate rates they currently charge. I know that after I have spoken, I will get phone calls from representatives of the various banking organisations to tell me that I am wrong. Unfortunately, I am not wrong. That has been accepted by Mr. Draghi, who said when he attended an Oireachtas committee meeting some time ago that these organisations are operating a monopoly. Monopolies are, at the very least, very damaging to economies. Mr. Draghi said that a monopoly is being operated in this sector in this State. I remind the Minister of State that monopolies in many parts of the economy are illegal. We have a monopoly in this country's financial services sector.

I welcome the European Investment Fund Agreement Bill 2018 and hope it has the desired impact. SMEs need support. If the Government does nothing else, it should ensure our pillar banks are brought to heel and brought to book. They need to play their role in ensuring SMEs, family homes and the broader economy are funded through reasonable interest rates, rather than the extortionate rates that are being charged by most of our pillar banks at present. I commend the Bill to the House.

Sinn Féin will support this important Bill. It is important for us to do whatever we can to help SMEs to access credit. Many of those involved with such enterprises have told us that they are unable to access credit at the moment. They are getting the run-around from the banks. I agree with Deputy Kelleher that the funds which are approved and made available have to be additional funds. There is no point messing around with funds that are supposedly available already, but which SMEs cannot actually access. Representatives of SMEs have made this point to us in one-to-one meetings and when they have come before committees. As the Minister of State is probably aware, the Joint Committee on Business, Enterprise and Innovation has been preparing a report on the cost of doing business in Ireland. The inability of SMEs to access credit and the cost of insurance are the key issues that are arising during our deliberations. Maybe we should look at different banking systems and not just at the pillar banks we have here. Something like the German Sparkassen banking model should be of interest to us as a way of making loans and finance available to SMEs more quickly.

The main aim of this very short Bill is to give the Ministers for Business, Enterprise and Innovation and Agriculture, Food and the Marine the power to enter into certain agreements with the European Investment Fund. This power will allow the Ministers to set up a future loan growth scheme with the aim of providing financial support to Irish business in the run-up to and aftermath of Brexit. The role of the European Investment Fund, which was established in 1994 as a subsidiary of the European Investment Bank, is to support SMEs and help them to access finance. Access to credit, which is a massive issue, was raised by businesses and their representative bodies during the Joint Committee on Business, Enterprise and Innovation's hearings on the cost of doing business in Ireland. Small businesses are the engine of the economy. They exist in every local community. The 245,000 small firms in this country account for 98% of all businesses across the State. They employ 927,759 people and contribute €66.1 billion to the economy each year.

Therefore, the sector deserves the required attention from Government and we are very happy to see a new investment avenue opened up by the Bill. I hope the loan scheme is more successful than the previously announced €300 million Brexit loan scheme. Unfortunately, the previous scheme was not a success. The latest figures we received show just 38 loans to the value of €8.5 million had been sanctioned out of a pot of €300 million. The scheme simply has not worked. I hope this one will be much better.

I have a number of questions for the Minister of State. Has a review of the previous Brexit loan scheme been carried out to identify whether red tape, interest rates or strict criteria contributed to the poorer than expected uptake? It is important to ensure lessons are learned and that we move on from them. Is the amount of taxpayer money being leveraged similar to the amount that was leveraged for the Brexit loan scheme? Does the Government intend to establish any other schemes in addition to the future growth loan scheme that would be backed by the European Investment Fund in future?

Sinn Féin recognises the importance of supporting indigenous businesses across Ireland, especially given the significant challenge of Brexit and other outside external factors which may be thrown up for the country. We are very happy to support the Bill.

I am delighted to have a brief opportunity to speak in support of the European Investment Fund Agreement Bill 2018. The Minister of State wants to pass this Bill urgently and to have provisions in place to implement the scheme early in 2019. There is a sense of urgency every day as we see events taking place at Westminster.

The Bill gives the Ministers for Agriculture, Food and the Marine and Business, Enterprise and Innovation the power to enter into agreements with the European Investment Fund to facilitate the future growth loan scheme, which was announced in budget 2019. Initially I wondered why it was necessary. Why did the Attorney General state the Government could not establish the fund? When Mr. Andrew McDowell appeared before one of the finance committees - it may have been the Committee on Budgetary Oversight - he urged us to try to draw down more money from the European Investment Bank, of which he is our director, for infrastructural projects, small businesses and all types of business. Will the Minister of State comment on that?

A particularly important element of the Bill is that it will make longer term loans available to SMEs, in particular those in the seafood and primary agriculture sectors. As a large proportion of the agriculture sector is expected to avail of the loans, the Department of Agriculture, Food and the Marine will front 40% of the fund and the Department of Business, Enterprise and Innovation will resource the remaining 60%. Both Departments will contribute €62 million over five years. I welcome the Minister of State's assertion that the counter-guarantee with the European Investment Fund offers 64% of the risk cover, which is an improvement on the usual 40%. I mentioned Mr. McDowell and what he is doing on the European Investment Bank. The Bill fits in with the wider Juncker plan from 2015 whereby €315 billion was to be raised for investment in Europe by the end of this year. How is that plan progressing? The European Investment Fund previously committed €20 million of venture capital to Ireland alone.

I agree with Deputies Kelleher and Quinlivan. The banking sector has not been performed well enough in supporting households or small businesses. One has to wonder, even while the Minister of State is putting his best foot forward with the €12 million per annum and the possible leveraging of €300 million, whether it will be enough.

Major concern was expressed yesterday by the Irish Fiscal Advisory Council, IFAC, when Mr. Seamus Coffey and his team made a presentation to the Committee on Budgetary Oversight regarding the serious risks from Brexit, which seem to be increasing daily. IFAC’s fiscal assessment report on budget 2019 stated there was a reasonable probability that the transition agreement and final relationship assumed will not materialise. IFAC referred to critical estimates of the medium-term impacts on Irish output from Brexit - we are talking about small SMEs that are exporting - at levels of 1.1% to 2.8% for a soft Brexit and 3.1% to 7% for a hard Brexit. IFAC cautioned the figures may be an underestimate due to the intense economic connections between Britain and Ireland. An example cited by Mr. Coffey and his colleagues is the labour intensity of Irish exports to the UK. Our exports to Britain look smaller in monetary terms when people are making comparisons with our other export markets but they tend to have a higher number of workers' hours involved. This is particularly true of agriculture and the food sector. Brexit still has the potential to administer a very severe shock to the Irish economy, which may last for up to a decade. Hence the importance and urgency of the Bill.

Recently, the Governor of the Bank of England, Mr. Mark Carney, delivered possible statistics arising from a cliff-edge Brexit, which would be pretty terrifying for our country. It would seriously damage our exports as a result of the changes to the value of sterling and so on. People have said Mr. Carney has been wrong in the past. We have to hope our fellow parliamentarians in Westminster will somehow turn the bus away from the cliff it is heading for and not bring us with them.

Other Deputies have queried why there has been such poor drawdown so far from the Brexit loan scheme. Is awareness of the availability of loans lacking or is the application process too onerous for busy SMEs trying to get through day after day? In previous speeches, the Minister, Deputy Humphreys, spoke of the responsibility of businesses to know about what loans and finance schemes are available to them. As Deputies, our experience with community bodies and small SMEs is they do not have the resources to spend time researching Brexit loan packages. The Be Prepared Enterprise Ireland scheme, which provides a €5,000 grant, has a very low take-up, at just around six per month. InterTradeIreland is also offering a Start to Plan voucher which is also apparently being taken up at a rate of about six per month. These are disappointing returns, which suggest the Minister of State and his senior Minister need to get the roadshow going and get out there and try to convince people to come forward and look for supports.

The Brexit loan scheme of €300 million, which opened in March, has only had 3% sanctioning, with a value of around €8.5 million for 38 loans. These are disappointing statistics. I particularly welcome that the loans will be provided over the long term, for seven, eight or even ten years. That is a major step forward, one which is badly needed in this era of increasingly sustained unpredictability. Typically, SMEs can access borrowing for periods of between three and seven years so a term of ten years is welcome.

Are we remotely Brexit ready or just hoping for the best? Are we hoping it will turn out okay on the night? Are we doing enough? While this is another step forward, are there other areas in which we could improve? The British Government is in absolute turmoil. There have been a number of Getting Ireland Brexit Ready seminars which around 4,000 participants are reported to have attended. Enterprise Ireland is running Brexit advisory clinics. They are all very welcome but perhaps we need to do more. How accurate and reliable is the information given out at these clinics when we are not sure what we are heading into? I hope the position will change because the level of unpredictability is very bad for small business.

I have always been a strong supporter of small Irish businesses. Throughout my career, I have always supported startups in particular to encourage dynamic people to leave unemployment. In areas of the city with very high unemployment it has been very important to be able to set up small business centres to encourage people with innovative ideas and entrepreneurial skills to get out there and start on the road to market their skills and eventually employ other people.

As my colleague stated, we cannot underestimate the importance of SMEs and indigenous companies. There are almost 250,000 small businesses in the State, comprising 98% of all businesses and contributing more than €66 billion to the economy. They cover the whole budgetary expenditure of our country. Eligible business for this scheme include micro, small or medium-sized enterprises which employ 250 persons or fewer with a maximum annual turnover of €50 million or an annual balance sheet not exceeding €43 million. Small mid-cap businesses that employ 500 persons or fewer are also eligible.

The Bill is brief and to the point. I note the review of the Bill will be four years from commencement. It is not set out in the Bill, but the explanatory memorandum states there are no costs arising from the legislation. The cost to the Exchequer, of course, will be €62 million.

I welcome the news recently of the doubling of the European Angels Fund Ireland for Business Angels from €20 million to €40 million. The first €20 million of the fund for SMEs is now invested in 20 companies and up to 100 companies hope to be supported over the coming decade. That is another brilliant innovation. Last year, there were 43 investments worth over €12 million for Irish start-ups through the Halo Business Angel Network. Enterprise Ireland has stated that there has been good take-up of the €20 million available and welcomed this additional package also. These are positive steps but the challenge we face, as we celebrate after Christmas 100 years of Dáil Éireann, probably is the biggest challenge we have had to face, maybe, besides the Second World War, throughout our independence history.

The European Investment Bank may directly finance Irish companies also. I referenced earlier the visit of the director of the bank to the Oireachtas committees. Last week, we had the announcement that Nuritas, a biotechnology company based here, has received €30 million backing under the European Investment Fund's European growth finance facility. I note the vice-president of the European Investment Bank stated the bank was impressed by the innovative use of technology by that company - it has already achieved a number of global deals.

I warmly welcome and support the European Investment Fund Agreement Bill as another small step to help Irish business address the ferocious challenge of Brexit. Hopefully, if the worst Brexit scenarios, as feared by the Fiscal Advisory Council and other commentators, remotely came to pass, we will not be faced in this House, before or after 2020, with the dilemma we had ten years ago of introducing emergency legislation.

I thank all the Deputies who contributed and welcome the fact that they all indicated that they would support this Bill.

As I stated at the outset, this Bill is urgent as it will give both Ministers the power to sign an agreement with the European Investment Fund by the end of the year for the purposes of launching the future growth loan scheme in early 2019. The scheme is a key Brexit mitigation measure.

There have been a couple of overarching observations and concerns. In response to Deputy Broughan, the Government has been actively promoting relevant supports. The Deputy himself referenced some of them. Through the Getting Ireland Brexit Ready roadshow that has taken place at a number of locations, all relevant Government agencies were present to provide information and support. Over 3,000 businesses have completed the Enterprise Ireland, EI, Brexit scorecard at this stage.

Budget 2019 provided over €110 million for additional Brexit preparedness resources and initiatives across the Department. The Department of Agriculture, Food and the Marine is funding 98 additional staff for the agencies and regulatory bodies with the remit to date to prepare Irish businesses to be Brexit-ready. We are providing €8 million in 2019 for the Department as well as the agencies and regulatory bodies to continue in our work on a Brexit response in an increasing global footprint. In other words, we are funding extra resources across the globe for market diversification. Indeed, we have engaged extensively. Both the Minister for Business, Enterprise and Innovation, Deputy Heather Humphreys, and myself were in China recently and the Minister for Agriculture, Food and the Marine, Deputy Michael Creed, took a delegation to Malaysia and Indonesia, with Enterprise Ireland, IDA Ireland and Bord Bia accompanying us on those occasions.

On whether the application process is too onerous, I make the point that this scheme means up to €500,000 unsecured; up to €200,000 with no additional business plan; and from €200,000 to €500,000 with a business plan as part of the application. It is relatively easy. At the same time, one must make sure that we do not have the Committee of Public Accounts stating in a couple of years that we loaned money to somebody where due diligence was not done properly on the applicant and the funding went astray. One must achieve balance. The Strategic Banking Corporation of Ireland, SBCI, conducted one-to-one interviews with 22 applicants, all of whom had a positive opinion on the application process. It shows that the majority of applicants are receiving eligibility confirmation within 24 hours.

I refer to some of the other statistics. We have had 307 applications, 270 of which are eligible to apply for a loan. Thirty applications are still being processed. At the end of November, 55 companies had received sanction for loans of €13 million. Many more of the approved applications are going through the bank process currently. The Exchequer funding for this scheme is €62 million because the loans are for up to ten years.

On Deputy Kelleher's point about this not replacing existing credit that the banks would provide, I make the following points. Typically, the banks provide three-to-seven year financing for companies that would qualify for this. This scheme is about eight-to-ten year funding and it is a different product in the first instance. Up to €500,000, it does not involve the same security requirements as a conventional loan. In many ways, it might be competing with them but it is not allowed to replace an existing loan. It is important to bear those points in mind but I take the point that we must be careful.

I also point out that the interest rate typically will be lower than what is available on the market and, as I stated, no refinancing is allowed. Also, at the end of the day, the Credit Review Office is available to businesses which wish to have their application for a loan reviewed if it is refused by a bank.

We are asking people to do something different here. It is not business as usual. It is about allowing businesses the opportunity to borrow for periods of between eight and ten years for where they see their business needs to go to, with the aid and assistance of the various agencies, whether it is Bord Bia, which has put in a lot of extra resources in support of getting Brexit ready, EI or the local enterprise office. All of the statutory State agencies that are there to support businesses are available to mentor and continue to do so with the various SMEs, agrifood producers and businesses.

It is a scheme that will assist businesses that are trying to invest strategically in a post-Brexit environment by providing the opportunity to borrow, as I stated, for eight to ten years, to support long-term capital investment which is something that is not readily available currently. We want to provide businesses with the opportunity to invest to allow them to prosper and remain competitive by diversifying their business and it is important in this way. It is an effective use, as has been stated already, of Exchequer funding as it means €62 million can be leveraged using the EIF counter guarantee to unlock funding for businesses of up to €300 million with the 64% guarantee.

The Bill will give the Ministers the necessary powers to enter into the agreement with the ElF and implement the future growth loan scheme which is a key component of the Government's response, and together with other initiatives, such as the Brexit loan scheme and the many supports available through agencies, we are helping businesses to face their Brexit challenges and overcome them.

I have covered all queries on which I can see notes. The Minister for Finance is perhaps the more appropriate person to answer Deputy Broughan's final question.

I commend the Bill. I thank all the Members. My officials and I have taken notes and will reflect on the contributions of all the Members.

Question put and agreed to.