Dáil Éireann Debate, Tuesday - 14 November 2023
132. Deputy Jackie Cahill asked the Minister for Finance if he would consider extending the duration of loans from the SBCI to ten years for certain categories; and if he will make a statement on the matter. [49925/23]
View answerIn its role as Ireland’s National Promotional Bank, the SBCI’s mandate is to deliver financial supports to Irish SMEs and address failures in the credit market. The SBCI began lending in March 2015. By the end of June 2023, the SBCI had succeeded in supported lending in excess of €3.6 billion to 54,448 SMEs from all sectors of the Irish economy and across a wide geographical spread.
I am pleased to advise the Deputy that SMEs can currently benefit from two loan guarantee schemes which feature lending terms of up to ten years. They are the Growth and Sustainability Loan Scheme and the SME Energy Efficiency Loan Scheme.
Growth and Sustainability Loan Scheme
The Growth and Sustainability Loan Scheme (GSLS) is a successor scheme to the highly successful Future Growth Loan Scheme. This original scheme also carried lending terms of up to ten years. That scheme was fully subscribed and closed in May 2022.
The GSLS, which launched on 19 September 2023, uses a counter guarantee from the European Investment Fund, to make €500 million in competitively priced loans available to SMEs, including primary producers.
Loans under this scheme, ranging from €25,000 to €3 million, can enable SMEs to make essential investments in their growth and resilience, and, in particular, climate action and environmental sustainability. At least 30% of the scheme’s lending capacity is directed towards these areas, which are crucial to Ireland’s sustainable transition, and benefit from a further ‘green’ interest rate discount.
SME Energy Efficiency Loan Scheme
As part of the Climate Action Plan, the SME Energy Efficiency Loan Scheme was launched in July 2022. With a lending capacity of €150 million, this scheme supports qualifying Irish SMEs, including primary producers, with long-term finance, enabling them to invest in upgrading the energy efficiency of their enterprises.
Specific investment measures under this scheme include heat pumps, solar panels, LED lighting, heating and cooling systems, electric vehicle charging points, lighting control systems and building upgrades.
Loan Guarantee Schemes with lending terms of less than ten years
The SBCI have delivered a number of State supported SME loan guarantee schemes in order to mitigate the effects of external economic shocks in recent years. These schemes provided loan terms of up to 6 years. From this category of schemes, the Ukraine Credit Guarantee Scheme is the sole scheme currently open for applications.
Legal contracts are in place regarding the amount, availability period and tenor of the scheme which are mirrored in the bank guarantee agreements. Funding agreements between the relevant Government Departments and the European Investment Bank Group are also in place. It is not possible to reopen these agreements to extend the loan duration.
