Plans for new longer-term Brexit loan scheme under discussion
News comes as Government’s €300m scheme officially opens for applications
The scheme, which will be managed by Bank of Ireland, Allied Irish Bank and Ulster Bank, can be used by companies to help mitigate the impact of Brexit. Photograph: iStock
The Government is in talks with the European Investment Bank (EIB) about a second loan scheme for Irish businesses affected by Brexit that would enable them to obtain funding for more than seven years.
Details of the plan were announced on the day a €300 million Brexit loan scheme officially opened for applications.
Speaking at the launch of the scheme in Dublin, which is aimed at helping Irish companies to introduce changes to their business ahead of Brexit, EIB vice president for Ireland Andrew McDowell revealed the bank is in talks with the Department of Finance about a second initiative, which he said would hopefully be agreed before year-end.
In comments made to journalists after the launch, the Minister for Business, Enterprise and Innovation Heather Humphreys said talks were focused on a scheme that would allow businesses to borrow over a longer period than is standard.
EIB, which last year provided €1 billion in financing for projects in the Republic, is a supporter of the Government’s first Brexit loan scheme as the key shareholder in the European Investment Fund (EIF).
That plan, which was unveiled in Budget 2018, officially opened for applications on Wednesday with Minister for Finance Paschal Donohoe saying he hoped it would encourage Irish companies to investigate new opportunities.
“The objective of this fund is to provide support for Irish companies to allow them to accelerate the diversification of their business and make changes to their business model,” said Mr Donohoe.
No business as usual
“This fund is not about funding business as usual. If it ends up being a support for things as they are then it will be a missed opportunity to make changes in their business model “ he added.
The scheme, which is to be delivered by Bank of Ireland, Allied Irish Bank and Ulster Bank, enables business with up to 499 employees to apply for loans from €25,000 to €1.5 million at an interest rate of 4 per cent or less.
Under the rules of the scheme, at least 40 per cent of the available funding is being made available to food businesses, which are particularly at risk from Brexit.
Bank of Ireland and Ulster Bank are taking applications for funding as of Wednesday with AIB to do so from June.
As well as the European Investment Bank Group (EIB), the European Commission and the Strategic Banking Corporation of Ireland (SBCI) are supporting the scheme.
Ms Humphreys said the initiative had the potential to help more than 5,000 Irish companies.
“We want to help businesses navigate through the difficulties of Brexit,” she said.
The Minister added that she believed the current scheme would be sufficient to assist companies despite report that Enterprise Ireland had previously voiced concerns that it would not be available to larger organisations.
“All-in-all, together with all the supports Enterprise Ireland are providing I think we are very well positioned to assist businesses in terms of supporting them with the challenges that Brexit will present,” said Ms Humphreys.