SBCI introduces €25m fleet finance fund for SMEs

The State-backed Strategic Banking Corporation of Ireland (SBCI) has announced a new €25 million fleet finance fund for small and medium-sized businesses.

The moves comes just a week after the SBCI introduced a €50 million equpiment, machinery and vehicle finance programme, which is being managed by specialist lender Finance Ireland.

The new fleet finance fund provides specialist contract hire facilities with terms of 3 to 4 years for SMEs. Its facilities include fleet management services and it features a guaranteed buy-back of assets at the end of the term.

Merrion Fleet, which will manage the fund, said the offering is aimed at SMEs who want to buy new vehicles or upgrade their existing fleet without the high maintenance costs associated with ownership.

"Outsourcing their vehicle requirement enables SMEs to take their fleet off balance sheet allowing this capital to be put to work at the core of the business's activity. Availing of all our other services will further allow SMEs to further reduce the costs of running their fleet including freeing up time currently spent on the fleet to be used on more productive areas of the business," said Merrion Fleet chief executive David Hurley.

Overall, the SBCI is to provide a minimum of €800 million in low-cost funding to Irish SMEs. These funds have been sourced by the body from the European Investment Bank, German promotional bank KfW and the Ireland Strategic Investment Fund (ISIF).

As part of the first phase of its programme the SBCI is channelling €400 million of funds into the SME sector via low-cost, long-term loans from AIB and Bank of Ireland.

SBCI said that in its first seven months of operation, some 3,200 Irish SMEs had received close to €110 million in funding.