AIB makes €200m fund available to SMEs at 4.5% through SBCI

AIB recently announced a partnership with the Strategic Banking Corporation of Ireland (SBCI) to offer €200m in new funding at a discounted rate to Irish SMEs. Minister for Finance Michael Noonan launched AIB’s commitment to the fund at an event in AIB’s Bank centre in Ballsbridge.

The SBCI is a new strategic SME funding company which is partnering with banks and other lending organisations to provide access to flexible funding for Irish SMEs and farmers. The SBCI’s three funding partners are the European Investment Bank (EIB), Kreditanstalt fur Wiederaufbau (KfW) the German promotional bank, and the Ireland Strategic Investment Fund (ISIF). It has an initial fund of €800m.

AIB is adding to the SBCI discount to provide our customers with access to credit at a rate of 4.5% variable – a 2% discount on our standard variable business loan rate. An SBCI Loan is available for terms between two and ten years, for working capital and investments and for funding up to €5m.

The initial product offering will include a refinancing facility for SMEs whose current bank loan facilities originated with banks that are exiting the Irish market. Also offered is the SBCI Agriculture Investment Loan, available to support investment by agriculture SMEs involved in primary agriculture production or the processing and/or marketing of agriculture products.

At the launch AIB’s Director of Retail and Business Banking, Bernard Byrne, said “Under the terms of the fund, AIB will lend to eligible SMEs at the highly competitive rate of 4.5 per cent per annum variable. This lower cost credit should be attractive to SMEs and allow them to borrow to invest in their businesses at this crucial turning point in our economy. Individual loans of up to €5 million will be available under the scheme,” Bernard Byrne said.

“The funding is available to SMEs for working capital loans and investment loan purposes. I would particularly like to thank the SBCI for its efforts in ensuring that many farmers are also eligible for this fund,’’ he continued.

The Minister for Finance, Michael Noonan, welcomed the decision by AIB to match the discount offered on the €200 million that the bank is drawing down from the SBCI.

“The core purpose of the SBCI is to enhance the supply of credit to SMEs by offering its €800 million in funding to institutions known as ‘on-lenders’. These on-lenders, which may be banks such as AIB or other organisations that have capital and the ability to assess SME loan proposals, can then lend the money on to businesses,’’ the Minister said. He said the fact that AIB is matching the discount offered by the SBCI should prove a welcome stimulus for businesses.

The new loan fund is available to SMEs in AIB branches, business centres and over the phone, subject to eligibility, normal lending criteria, terms and conditions.

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