Wednesday, 6 February 2019

Questions (30)

Charlie McConalogue


30. Deputy Charlie McConalogue asked the Minister for Agriculture, Food and the Marine the number of food companies that have been sanctioned funding under the Brexit working capital loan scheme; the value of same; when the long-term capital loan scheme announced in budget 2018 for farmers, fishermen and food businesses will open for applications in 2019; and if he will make a statement on the matter. [5723/19]

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Written answers (Question to Agriculture)

The €300 million Brexit Loan Scheme was developed in cooperation with the Department of Business, Enterprise and Innovation (DBEI) and the Strategic Banking Corporation of Ireland (SBCI), to provide working capital support to enable eligible Irish businesses to implement the necessary changes to address the challenges posed by Brexit. The Scheme opened for applications on 28 March 2018 and it will remain open until 31st March 2020.

It provides for loans of €25,000 to €1,500,000 per eligible enterprise at a maximum interest rate of 4%, ranging from 1 year to 3 years, with unsecured loans up to €500,000. The loans can be used for future working capital requirements or to fund innovation, change or adaptation of the business to mitigate the impact of Brexit.

Applications for eligibility assessment must be made to the SBCI who, on approval, assign an eligibility reference number. This reference number along with the loan application may then be provided to a participating lender.

At 1 February, there were 394 eligibility applications received, of which 350 are approved and 9 are ineligible. The total number of loans progressed to sanction at bank level is 69 to a value of €15.7m, 9 of which relate to food businesses with a total value of €3.9m.

The Future Growth Loan Scheme has been developed by my Department and DBEI in partnership with the Department of Finance, the SBCI and the European Investment Fund (EIF). It will be delivered through participating finance providers and make up to €300 million of investment loans available to eligible Irish businesses, including farmers and the agri-food & seafood sectors. The loans will be competitively priced and will be for terms of 8-10 years and will support strategic long-term investment in a post-Brexit environment.

This is a long-awaited source of finance for young and new entrant farmers, especially the cohort who do not have high levels of security. It will also serve smaller-scale farmers, who often do not have the leverage to negotiate for more favourable terms with their banking institution.

SBCI has just issued an open call inviting banks and other lenders to become lending partners and this call has a closing date of 11 February 2019. SBCI advise that a period of due diligence, which will include the EIF, will follow. I have urged SBCI to operationalise the Scheme as soon as possible. The Scheme will run for three years from its launch date and further announcements in this regard will be made shortly.