The €300 million Brexit loan scheme was developed in co-operation with the Department of Business, Enterprise and Innovation and the Strategic Banking Corporation of Ireland, SBCI, to provide working capital support to enable eligible businesses to implement the necessary changes to address the challenges posed by Brexit. The scheme was opened for applications on 28 March 2018 and will remain open until 31 March 2020. It provides for loans of between €25,000 and €1.5 million per eligible enterprise at a maximum interest rate of 4%, ranging from one year to three 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 which, on approval, assigns an eligibility reference number. The reference number, along with the loan application, may be then provided to a participating lender.
On 15 March, 523 eligibility applications had been received, of which 472 were approved and 9 were ineligible. The total number of loans which had been progressed to sanction at bank level was 89, at a value of €19.34 million, 18 of which related to food businesses with a total value of €5.7 million. While the number of loans progressed to sanction level is relatively low, it reflects the current uncertainty regarding the outcome of Brexit. The number of eligibility applications approved, however, indicates a good level of interest in the scheme and is a good indicator of businesses engaging in Brexit preparedness.
In addition to the Brexit loan scheme, the future growth loan scheme has been developed by my Department and the Department of Business, Enterprise and Innovation in partnership with the Department of Finance, the SBCI and the European Investment Fund, EIF. It will be delivered through participating finance providers and will make up to €300 million of investment loans available to eligible businesses, including farmers and the agrifood and seafood sectors. The loans will be competitively priced, will be for terms of between eight and ten 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. Food companies have identified long-term investment finance of up to ten years as a critical need which is unavailable in Ireland. I am pleased that the Government has been able to deliver this product and its effects will be felt throughout the food production chain, from primary producer to processor.
The SBCI held an open call earlier this year inviting banks and other lenders to become lending partners. It advises that a period of due diligence, including by the EIF, is nearing completion. I have urged the SBCI to operationalise the scheme as soon as possible. It will run for three years from its launch date and I expect to make further announcements in this regard soon.