AIB launches package for SMEs

AIB HAS become the fourth Irish bank to launch a specific funding package aimed at the credit-deprived small and medium sized enterprise (SMEs) sector.

Following on from packages announced by Bank of Ireland, Bank of Scotland and Anglo Irish Bank, AIB will adopt a two-pronged approach to meeting the concerns of SME customers, by focusing on ensuring the availability of loans and overdrafts to help cash-flow management and supporting business expansion and new investment.

The Small Firms Association welcomed the latest initiative, but association chair Pat Crotty said the real test of success will be in the “speedy delivery of the commitments to ensure small business survival at the individual firm level”.

As part of the package, AIB has committed to maintain its overall working capital support at least at the same level as 2008, which is €3 billion, while it will also restructure loan facilities over longer terms, and will make available immediately interest only options for up to two years.

The bank will provide another € 1 billion in funding for increased investment and working capital requirements, and put aside € 200 million for a start-up fund, with individual loans increased from € 60,000 to €100,000.

The bank will avail of the “maximum allocation” of European Investment Bank (EIB) funding and said it is “pressing for the release of these monies at the earliest possible opportunity”.

The EIB has put aside a € 15 billion fund which it will lend out to commercial banks across Europe to assist SMEs.