Some €300 million in funding is to be made available to Irish businesses under the Government's Brexit loan scheme following the signing of a counter guarantee.
In October’s budget, €14 million was allocated to the Department of Enterprise for the scheme, together with €9 million for the Department of Agriculture, which will ensure at least 40 per cent of the fund will be available to food businesses.
The scheme is supported by the European Investment Bank Group (EIB), the European Commission and the Strategic Banking Corporation of Ireland (SBCI).
Minister for Enterprise Heather Humphreys, Minister for Agriculture Michael Creed and Minister for Public Expenditure Paschal Donohoe met with the EIB and the SBCI for the formal agreement of a counter guarantee through the European Investment Fund.
Leveraged
The signing of the counter guarantee means the total of €23 million can be leveraged to provide €300 million to Irish businesses affected by Brexit. The scheme will be open to eligible businesses with up to 499 employees from March 2018.
Mr Creed said the loan scheme would provide “affordable, flexible working capital financing to Irish SMEs and mid-caps that are either currently impacted by Brexit or who will be in the coming period”.
“It will give those businesses time and space to adapt and to grow into the future,” he said. “Given their unique exposure to the UK market, my department’s funding ensures that at least 40 per cent of the €300 million scheme will be available to food businesses.
“Food businesses will need to focus on competitiveness and innovation in order to continue the growth in Irish agri-food exports, which reached a record €13.5 billion in 2017.”
Essential support
Mr Donohoe said the guarantee agreement would provide “essential support” to the loan scheme.
“In order to remain competitive in a changing world, businesses will need to innovate and look to new markets to cope with the challenges of Brexit,” he said.
“This scheme will allow businesses to put in place the necessary changes to help them grow into the future. I look forward to continued collaboration with the EIB Group into the future.”
Ms Humphreys said a survey by her department showed that while 75 per cent of SMEs expect to be impacted by Brexit over the next 18 months, just 16 per cent have a formal contingency plan.
Furthermore, 21 per cent of medium sized businesses have postponed at least one investment decision in reaction to Brexit.
EIB vice-president Andrew McDowell said the EIB “recognises the unique challenges facing Irish companies” from Brexit.
“This new scheme will support new investment by companies most vulnerable to future export and trade uncertainties and demonstrates the EIB’s enhanced support for private sector investment across the country.”
