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 28th March 2018 and it will remain open until 31st March 2020.
At 29th March, there were 553 eligibility applications received, of which 497 are approved and 11 are ineligible. The total number of loans progressed to sanction at bank level is 99 to a value of €21.6m, 20 of which relate to food businesses with a total value of €6.4m. While the number of loans progressed to sanction level is relatively low, it reflects the current uncertainty regarding the outcome of Brexit. However, the number of eligibility applications approved indicates a good level of interest in the Scheme and is a good indicator of businesses engaging in Brexit preparedness. It was not possible to include primary agriculture because of the guarantee arrangements for the Scheme, which includes the EU/EIF InnovFin Programme.
I was pleased to launch the "Future Growth Loan Scheme" last week. It has been developed by my Department and the Department of Business, Enterprise and Innovation in partnership with the Department of Finance, the Strategic Banking Corporation of Ireland (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 agrifood & seafood sectors.
As I said in the announcement last week, 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.
I have had ongoing engagement with the banks with regard to access to finance needs in the agrifood sector. I am pleased to see that this engagement and the delivery of the 2017 “Agriculture Cashflow Support Loan Scheme” has acted as a catalyst to encourage financial institutions to improve existing offerings and to develop new products for the sector which serve its working capital needs. A Spending Review of the Agriculture Cash Flow Loan Scheme, published in Budget 2019, concluded that this was one of its main impacts.
In this context, the focus of the Government has been to address market gaps, the most critical of which has been identified as unsecured longer-term investment finance and this will now be addressed through the Future Growth Loan Scheme.
