merrion street

Latest figures from the Strategic Banking Corporation of Ireland (SBCI) show that 3,200 Irish SMEs are now putting close to €110 million in SBCI funding to work for their business. Passing €100 million of lending in its first seven months of operation is a significant milestone for the SBCI as it seeks to deploy its first €800 million of finance to Irish SMEs.

New non-bank finance partnerships

This comes as the SBCI yesterday announced the second of its new non-bank finance partnership in two weeks, which plans to offer a new €25 million contract hire finance programme through Merrion Fleet, a professional fleet management service provider. Merrion Fleet will provide specialist contract hire facilities with terms of 3-4 years to SMEs. Its facilities will include its fleet management services and also feature a guaranteed buy-back of the assets at the end of the term. The Merrion Fleet offering is aimed at SMEs who want to buy new cars or upgrade their existing fleet without taking on the risks and maintenance costs of taking long-term ownership. Merrion Fleet will pass on the benefit of low-cost funding provided by the SBCI to allow customers to borrow at a discounted rate.

Speaking about yesterday’s announcement SBCI chief executive Nick Ashmore said, “These figures highlight the very strong progress we are making in delivering low-cost, SME-friendly funding to businesses that need it to grow and support jobs. We look forward to building on this progress in the coming months by teaming up with more lenders and providing additional new funding”.

This follows on from last week’s announcement of the first non-bank finance partnership worth €50 million with Finance Ireland. Finance Ireland will act as on-lender of €50 million provided by the SBCI to provide Irish SMEs with lower-cost funding for equipment, machinery and vehicles, providing flexible financing at competitive market rates.

Interested in finding out a bit more about SBCI? Read on...

What is SBCI?

SBCI aims to provide Irish small and medium businesses with flexible funding by offering: 

• Lower cost funding to financial institutions which is passed on to SMEs
• Flexible products with longer maturity and capital repayment flexibility, subject to credit approval
• Market access for new entrants to the SME lending market, creating real competition

All of these elements create a more competitive and dynamic environment for SME funding. 

How does it work?

SBCI loans are made available to businesses through bank and non-bank financial institutions. SBCI now works with four on-lenders: AIB and Bank of Ireland, and now Merrion Fleet and Finance Ireland. An SME can borrow up to €5m, which is likely to cover the needs of most Irish SMEs.  SBCI’s goal is to facilitate the delivery of lower cost, innovative and accessible funding to Irish SMEs, through a suite of flexible products offered by a wider range of financial institutions than is currently available in the Irish market. 

What is SBCI’s progress so far?

• The SBCI will provide a minimum of €800 million in low-cost funding to Irish SMEs. These funds have been sourced by the SBCI from the European Investment Bank, German promotional bank KfW and the Ireland Strategic Investment Fund (ISIF).
• The SBCI ensures that the benefits of its low-cost funding are passed on to SMEs by On-Lenders in the form of lower borrowing rates.
• Over 1,600 Irish SMEs benefited from SBCI loans in the SBCI’s first four months in operation (March to June 2015), borrowing €45 million in total through AIB and Bank of Ireland.

The SBCI is also working with other bank and non-bank funding providers and bringing in new participants to the Irish market to act as On-Lenders. Further announcements of new On-Lenders will be made in the coming months.

For more information

Check out SBCI's website.