SMEs to benefit from €300 million loans

Small and medium sized firms in Ireland will be able to benefit from loans totalling €300 million in the coming weeks, it was announced today.

The European Investment Bank (EIB) is finalising agreements to extend three new generation loans for small and SMEs in Ireland for a total of €300 million.

AIB, Ulster Bank and Bank of Ireland, will act as financial intermediaries for the funds, passing them onto SMEs with projects which further EU policy objectives.

These new loans are in addition to the €50 million of EIB funds which were made available to Bank of Scotland (Ireland) in December to finance investment projects by small businesses.

Minister for Finance Brian Lenihan welcomed today's announcement. He said provision of loans to SMEs was of critical importance to the European economy in general and to smaller economies such as Ireland’s in particular.

Welcoming the initiative, Chambers Ireland chief executive Ian Talbot said it would help restore confidence and liquidity in the wider Irish Economy.

Separately, the Small Firms Association (SFA) said the real test of success would be in the speedy delivery of the funding to ensure small business survival at the individual firm level.

"Cash flow is the life blood of any business and currently small businesses are facing financial pressures from all angles - restricted access to finance; extension of creditor days taken by customers and reduced spending. It is great news that the EIB and Irish financial institutions are reacting to the real problems which their small business customers are facing, and this specific funding will assist the small business sector with financial pressures to prevent business closures and job losses,” said SFA director Patricia Callan.

The EIB made its first loan in Ireland in 1973 and since then has lent almost €10 billion to support the Irish economy.