Q&A: Brexit Loans To Keep Food Exporters On Right Track

Minister for Jobs, Enterprise and Innovation, Heather Humphreys, has said the Brexit loan scheme launched last March is working, and people are applying for the funding.

She said that in the month to mid-October, the amount of loans sanctioned at bank level had increased from €6.5 million to €8.5m.

Of the 262 applications received at the time, 224 had been approved by the Strategic Banking Corporation of Ireland as being eligible and 38 had been sanctioned at bank level.

Minister for Business, Enterprise and Innovation, Heather Humphreys.

Minister for Business, Enterprise and Innovation, Heather Humphreys.

“There is, therefore, a good stream of applications coming in, and they are being dealt with,” said the Minister.

The scheme is available until March 31, 2020, or until the scheme has been fully subscribed.

At least 40% of the fund will be available to food businesses.

What is the Brexit Loan Scheme?

It is a loan guarantee scheme for eligible businesses that need relatively short-term credit to address working capital challenges brought about by Brexit. It helps businesses innovate, change or adapt, to mitigate the impact of Brexit. The scheme makes up to €300m available to eligible Irish businesses. The finance is easier to access, more competitively priced, and at more favourable terms than other similar offerings. The maximum interest rate is 4%.

This rate represents a significant saving compared with the prevailing rates offered for similar loans on the market. Loans will range from €25,000 to €1.5m per eligible business, with unsecured loans up to €500,000, and terms from one to three years.

Optional interest-only repayments are being provided at the start of the loans.

The Brexit Loan Scheme is offered by the Government, through the Department of Business, Enterprise and Innovation and the Department of Agriculture, Food and the Marine, supported by the EIB Group’s InnovFin SME Guarantee Facility. The scheme is operated by the Strategic Banking Corporation of Ireland (SBCI) through participating finance providers. Loans can be used for future working capital requirements, to fund innovation, change or adaptation of the business to mitigate the impact of Brexit.

What kind of businesses are eligible for the scheme?

It must be a viable business with up to 499 employees. It must be Brexit impacted, able to demonstrate that 15% of business turnover is exposed to potential negative impacts as a result of Brexit, whether through imports from the UK, exports to the UK, or a combination of both, or indirect exposure to the UK by transacting with an enterprise directly exposed to UK. Sole traders can also apply.

The purpose of the scheme is to support businesses who are responding to their Brexit challenges through innovating, changing or adapting to a Brexit/post-Brexit environment. These responses may include strengthening their product offerings, developing new markets to diversify their trade footprint, changing their organisational structure, or developing new capabilities.

What kind of businesses are not eligible for the scheme?

It does not apply to businesses in financial difficulty (excluding short-term cash flow pressures).

The scheme does not apply to those businesses which are bankrupt or being wound up, or those having their affairs administered by the courts.

It does not apply to businesses convicted of an offence concerning any professional conduct by judgment, fraud, corruption, involvement in a criminal organisation, money laundering or involvement in any other illegal activity detrimental to the EU’s financial interests. Due to State Aid rules, loans are not available to farmers and fishermen under this scheme. Some business sectors are not eligible due to EIF restrictions.

Are businesses required to be clients of State Agencies?

No, the scheme is open to all businesses that meet the eligibility criteria.

Are any of the loans aimed at particular sectors?

The Department of Agriculture, Food and the Marine contributed 40% of the State funding. As a result, at least 40% of the fund will be available to food businesses.

However, any businesses operating in primary agriculture are not eligible.

Brexit - Flags

Which finance providers are participating in the scheme?

The participating finance providers are AIB, Bank of Ireland and Ulster Bank.

Approval of all loans would be contingent on meeting the credit assessment criteria of the finance provider

How do I apply for the Scheme?

Use the guidelines provided to assess if your business is likely to meet the eligibility criteria.

If yes, complete the eligibility form and return to the SBCI by post/email. The SBCI will assess the application and determine if you are eligible/not eligible. Eligible applicants will be provided with an eligibility reference number, and can contact their preferred participating finance provider (AIB, Bank of Ireland and Ulster Bank).

Where can I get full info?

This is on the websites of Department of Agriculture, Food and the Marine, or the Department of Business, Enterprise and Innovation.

(Source – Irish Examiner – Farming – Stephen Cadogan – 01/11/2018)

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