Enterprise Minister Heather Humphreys, Agriculture Minister Michael Creed and Finance Minister Paschal Donohoe met with representatives of the European Investment Bank Group and the Strategic Banking Corporation of Ireland for the formal agreement of a counter guarantee through the European Investment Fund to allow for the roll out of €300m in funding to Irish businesses under the Government’s Brexit Loan Scheme.
In last October’s budget, €14 million was secured by the then Minister for Business, Enterprise and Innovation, together with €9 million by the Minister for Agriculture, Food and the Marine, for the €23m for the Brexit Loan Scheme. The Department of Agriculture, Food and the Marine’s share of funding ensures that at least 40% of the fund will be available to food businesses. The scheme is supported by the European Investment Bank Group, the European Commission and the Strategic Banking Corporation of Ireland.
The signing of the counter guarantee agreement means that the total amount of €23m can be leveraged to provide €300m to Irish businesses affected by Brexit. The Scheme will be open to eligible businesses with up to 499 employees from March 2018, and has the potential to benefit over 5,000 companies.
At today’s signing, Minister Humphreys also released the findings of her Department’s second survey of SMEs about the impacts of Brexit on their businesses.
The Behaviours & Attitudes survey, which was conducted last autumn, found that while 75% of SMEs expect to be impacted by Brexit over the next 18 months, only 16% of SMEs have a formal Brexit contingency plan.
Speaking at the signing, Minister Humphreys asked businesses to start planning now.
The first step is to identify the lead person in your organisation who can assess potential impacts and scenarios and write your Brexit Contingency Plan.
My Department has a number of supports in place to help companies to develop their Plans, including the Enterprise Ireland Brexit SME Scorecard and the Be Prepared Grant of up to €5,000.
The B&A survey asked businesses about how they are responding to Brexit, and what financial supports they need in order to respond. The survey found that almost half of the firms were not investing in their businesses. When asked why, Brexit uncertainty is cited as a key reason. Furthermore, 21% of medium sized businesses have postponed at least one investment decision in reaction to Brexit.
Minister Humphreys said:
It’s time for Irish businesses to start planning and preparing for Brexit. The Brexit Loan Scheme will provide financing support at lower interest rates and with lower collateral requirements. I encourage businesses to use this financing to help improve their operational competitiveness, to innovate or to diversify their trade footprint as they prepare to face Brexit over the next year and beyond.
Minister Creed said:
I welcome the signing of the guarantee agreement today, which will facilitate the launch of the Brexit Loan Scheme. This will provide affordable, flexible working capital financing to Irish SMEs and mid-caps that are either currently impacted by Brexit or who will be in the coming period. It will give those businesses time and space to adapt and to grow into the future. Given their unique exposure to the UK market, my Department’s funding ensures that at least 40% of the €300 million Scheme will be available to food businesses.
Food businesses will need to focus on competitiveness and innovation in order to continue the growth in Irish agri-food exports, which reached a record €13.5 billion in 2017. I believe that supporting lower-cost flexible finance is a key Government response to assist the sector in this process.
Minister Donohoe said:
The announcement of the guarantee agreement today between the SBCI and the EIB is most welcome. This guarantee will provide essential support to the Brexit Loan Scheme, which I announced during Budget 2018. In order to remain competitive in a changing world, businesses will need to innovate and look to new markets to cope with the challenges of Brexit. This scheme will allow businesses to put in place the necessary changes to help them grow into the future. I look forward to continued collaboration with the EIB Group into the future and to seeing the value of this Scheme benefit thousands of companies across the country.
The new European Investment Fund support for business investment in Ireland is backed by the European Fund for Strategic Investments and the EU InnovFin Finance for Innovators programme.
See the full press release for further details.