Dáil Éireann Debate, Thursday - 19 April 2018
212. Deputy Billy Kelleher asked the Minister for Business, Enterprise and Innovation if further Exchequer funding was allocated to the Brexit loan scheme and her views on whether it would reduce the interest rate further. [17318/18]
Amharc ar fhreagraThe Brexit Loan Scheme launched on 28 March provides affordable financing to eligible Irish businesses either currently impacted by Brexit or which will be in the future. The €300 million scheme is being delivered by the Strategic Banking Corporation of Ireland (SBCI) through participating finance providers (currently Bank of Ireland and Ulster Bank, with AIB to follow in June) to get much needed working capital into Irish businesses.
The finance is easier to access, more competitively priced and at more favourable terms than current offerings, with a maximum interest rate of 4%. This maximum rate of 4% represents a substantial discount for working capital loans compared to current market offerings. It is also likely to incentivise competition amongst on-lenders, which would yield long-term structural benefits for Irish businesses, by supporting the development of a functioning and competitive commercial market. If the financing provided by the scheme is at too low a rate, there is the potential of distorting the wider credit market and irresponsibly creating a dependence on artificially low interest rates. Further reductions in the rate could also give rise to State aid issues.
