Robert Troy
Ceist:293. Deputy Robert Troy asked the Minister for Business, Enterprise and Innovation the reason the Brexit loan scheme does not incorporate an interest rate subsidy. [46394/19]
Amharc ar fhreagraTuesday, 12 November 2019
Ceisteanna (293)
Freagraí scríofa
The Brexit Loan Scheme was launched in March of 2018. The Scheme, using a combination of Irish Exchequer and EU guarantees, leveraged up to €300 million of lending at a maximum interest rate of 4% at a cost to the Exchequer of €23 million - €14 million provided by my Department and €9 million provided by Department of Agriculture, Food and the Marine.
The Brexit Loan Scheme provides relatively short-term working capital, 1 to 3 years, to eligible businesses with up to 499 employees to help them to innovate, change or adapt to mitigate their Brexit challenges. Businesses can confirm their eligibility with the Strategic Banking Corporation of Ireland (SBCI) and, if deemed eligible, can apply to one of the participating finance providers for a loan under the scheme.
The effect of the guarantee is to lower the risk for the banks, which is passed through to the customer in the form of lower interest rates. Loans provided under the Brexit Loan Scheme are offered at a maximum interest rate of 4%. According to the Central Bank’s SME Market Report 2019, the average interest rate on similar loans to SMEs is 5.7%.
It should also be noted that loans of under €500,000 through the Brexit Loan Scheme are available on an unsecured basis, further reducing potential barriers to entry for Irish businesses.