• New €50m SBCI package for equipment, machinery and vehicles through Finance Ireland, a specialist SME lender
• Builds on €400m SBCI loans already available through AIB and Bank of Ireland
• “Supporting non-bank finance will help drive competition in Irish SME lending” CEO Nick Ashmore

Thursday 29 October 2015 – The Strategic Banking Corporation of Ireland (SBCI) has today launched its second phase of new funding for Irish SMEs with a €50 million equipment, machinery and vehicle finance programme through specialist SME lender Finance Ireland.

The new phase builds on the successful €400 million lower-cost, longer-term loan programme for SMEs set up with AIB and Bank of Ireland earlier this year.

Finance Ireland will act as on-lender of €50 million provided by the SBCI to provide Irish SMEs with lower-cost funding for equipment, machinery and vehicles. Finance Ireland will provide flexible financing at competitive market rates.

The new products announced today are:

The new products are available immediately, with further details available at www.sbci.gov.ie and www.financeireland.ie.

Minister Michael Noonan said:

“The SBCI has been a huge success since its launch earlier this year with €400 million already made available to SMEs before today’s announcement. The new €50 million package is hugely significant as it provides additional targeted funding to SMEs for investment in machinery and vehicles required for small business to meet the demands of the growing economy.

A modern growing economy requires funding through bank and non-bank sources and Finance Ireland represents the first non-bank on-lender for SBCI. I look forward to seeing the SBCI continuing to thrive as it moves to this new phase of lending”.

SBCI Chief Executive Nick Ashmore said:

“The SBCI is here to help solve problems in the SME lending market and help SMEs to support jobs and grow their businesses.

Today we are bringing our first non-bank finance provider on-board which will help drive competition in Irish SME lending. Greater competition will make it easier and cheaper for Irish SMEs to borrow.

Finance Ireland will bring lower cost, longer term finance for SMEs who plan to invest in equipment, machinery or vehicles.

Our first phase of new SME loans, launched earlier this year through AIB and Bank of Ireland, has been a real success in addressing the needs of SMEs. We are confident that our second phase, starting today, will be equally successful.”

Finance Ireland Executive Chairman Billy Kane said:

“Most importantly, this deal will make more funding available to the SME sector which has been suffering due to a lack of available credit with so few competitors in the market.  It will also do so at a lower cost which is an additional benefit for SMEs.

Finance Ireland is delighted to be the first non-bank to be approved by the SBCI for SME funding and through our established distribution channels we will ensure that the advantage of lower cost funding is passed on in full to SMEs.  Our Direct Sales team will be interacting directly with SMEs to ensure their requirements for highly competitive loans for cars, vans, forklifts and specialist equipment are met with these funds.”

SBCI – progress so far

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

The SBCI ensures that the benefits of its low-cost funding are passed on to SMEs by On-Lenders in the form of lower borrowing rates.

Over 1,600 Irish SMEs benefited from SBCI loans in the SBCI’s first four months in operation (March to June 2015), borrowing €45 million in total through AIB and Bank of Ireland.

The SBCI is also working with other bank and non-bank funding providers and bringing in new participants to the Irish market to act as On-Lenders. Further announcements of new On-Lenders will be made in the coming weeks and months.

Issued on behalf of the SBCI by
Gordon MRM
Contact:
David Clerkin (087) 830 1779
david@gordonmrm.ie

Contact for Finance Ireland queries:
Kieran Garry (087) 236 8366
kieran@gordonmrm.ie

Notes to editors
SMEs which are eligible for SBCI loans are defined as “independent enterprises which employ fewer than 250 persons and which have an annual turnover not exceeding €50m and/or an annual balance sheet total not exceeding €43m”.

Together with the supports already being provided by the Credit Guarantee Scheme, Microfinance Ireland and the Credit Review Office, the SBCI’s products will be easy to access through the online tool for SMEs.

The SBCI’s initial funding partners are:

• the European Investment Bank (EIB);
• Kreditanstalt für Wiederaufbau (KfW, the German promotional bank); and
• the Ireland Strategic Investment Fund (ISIF).

These partners are providing long-term funding at attractive rates to the SBCI to support Irish SMEs.

Background to the SBCI

• Unlike many European countries, Ireland did not have a state development bank to sustain funding to businesses throughout the financial crisis.
• During Ireland’s exit from the EU/IMF programme in late 2013, the Taoiseach and German Chancellor Ms Angela Merkel agreed that the German promotional bank KfW would help finance the Irish SME sector.
• It was this European agreement that led to the creation of the Strategic Banking Corporation of Ireland (SBCI), ensuring that in future, Irish businesses have access to long-term, patient funding.
• The Department of Finance and the National Treasury Management Agency worked throughout 2014 to create the necessary mechanisms to establish the SBCI.
• Building on the initial funding offer from the KfW, the project team added funding from the European Investment Bank (EIB) and the Ireland Strategic Investment Fund, a new fund to which the assets of the National Pensions Reserve Fund were transferred.
• The Government approved this approach and legislation enabling the establishment of the SBCI was passed by the Oireachtas in July 2014.
• The SBCI was formally launched in October 2014 by the Minister for Finance and Minister for Public Expenditure and Reform, together with the German Minister for Finance, Dr Wolfgang Schäuble , President Werner Hoyer of the EIB and Dr Ulrich Schröder of the KfW.

Finance Ireland

Finance Ireland Ltd is a privately owned diversified financial services group. Established in 2002, the Group has businesses that specialise in Motor Finance, Finance & Leasing (incorporating Hire Purchase, Contract Hire, Vehicle & LCV leasing, Short-term Car Rental), Commercial Mortgages and Asset Management (primarily debt purchase and recovery). The company’s headquarters are in Ballsbridge in Dublin 4 and it employs over 90 people. The group has net assets in excess of €16 million. For further information go to www.financeireland.ie.

The group’s new website gives visitors easy access to, amongst other things, the groups background, operations and people. At the same time the group chose to rebrand its corporate image with a new clean and focused logo which highlights its clarity and aspiration of purpose.

Kane’s Everyday Finance has joined up with CarVal Investors, a subsidiary of Cargill group, to buy the loan book at a steep discount, possibly up to 90%.

The book comprises commercial vehicles, including heavy-duty quarrying equipment, and a small amount of car finance. The deal was concluded last week for an undisclosed sum.

CarVal is managed as an independent subsidiary of Cargill, which has revenues of $134bn (€102bn). Cargill is still 85%-owned by the descendants of its founder, William Cargill, and is the largest privately held company in America.

CarVal has already been active in the market for distressed Irish loans. Last month, it teamed up with Centrebridge Partners, a US private equity firm, to buy a €350m portfolio of non-performing loans, known as Project Pittsburgh, from Lloyds, the parent of the now defunct Bank of Scotland (Ireland). It bought those loans at a 90% discount, suggesting it may have sought a similar discount on the Lombard loans.

Everyday Finance is the debt purchase and recovery arm of Kane’s Finance Ireland group, which controls assets of €300m. Everyday Finance has facilities in Dublin and Galway, where it employs 50 staff at its operations centre.
Finance Ireland also runs a motor finance arm called First Auto Finance, which Kane set up last year with British backing.

Kane was chief executive of the forerunner of Permanent TSB from 1999 until 2001.