In his Budget speech my colleague the Minister for Finance and Public Expenditure and Reform, Paschal Donohoe TD, formally announced progress in relation to the development of the “Future Growth Loan Scheme” for SMEs, including the primary agriculture and seafood sectors. As I announced on Budget day, this is the Scheme for which I had provided €25 million in funding in 2018. This is a key Government Brexit response that has been under consideration and development throughout 2018.
The Scheme, which will be administered by the SBCI and backed by a European Investment Fund counter-guarantee, will bring previously unavailable 8 to 10 year unsecured investment finance to the Irish market at competitive interest rates. I am working with colleagues, the Minister for Business, Enterprise and Innovation, Heather Humphreys TD, and Minister Donohoe, to bring up to €300 million of loans to the market.
My Department is providing 40% of the funding so an overall agri-food package of up to €120 million will be available. However, unlike previous similar Schemes, this can be reviewed and adjusted according to demand.
Loans will be available to farmers, the seafood sector and to agri-food businesses. This will be 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. Along with the likes of Milk Flex, this Scheme will form part of a comprehensive investment package for farmers.
Food companies have identified long term investment finance of up to ten years as a critical need which is currently unavailable in Ireland. I am pleased that the Government have been able to deliver this product and its effects will be felt all along the food production chain.
Further details will be provided in the coming months. The Scheme is expected to be in place in early 2019 and will run for three years from its launch date.