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Strategic Banking Corporation of Ireland“Reinforcing Irelands Economic Recovery”
StartUp Gathering Waterford6th October
What is the SBCI?
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The Strategic Banking
Corporation of Ireland (“SBCI”) is a limited company
Owned by the Minister of Finance
Governed by an independent Board
of Directors
Now backed by EIB, KfW and ISIF with €800 million of low cost long term
loans
Set up to source low cost long term
finance from multilateral finance
providers and State resources
Managed by its own dedicated
team
How is the SBCI supporting the recovery?
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The SBCI uses an on-
lending model
This means it does not
lend directly to
SMEs
It provides the low cost long term liquidity as raw
material to credit providers, who
then compete to deliver this to the
SME market
The SBCI works with banks and non-bank credit providers and
charges them all the same price for its funding.
This approach drives
competition as opposed to
setting out to be the competition.
SBCI on-lending model
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First SBCI products launched in February 2015
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Loan’s designed for working capital and investment purposes.
SME loans can be for terms of up to 10 years , lowering monthly repayments and positively impacting SME cash flow. Upper loan limit is €5m. SME working capital loans will be for a minimum 2 year term.
Agricultural investment loans are designed to support investment in the productive capacity of the farm enterprise.
€200 million of funding available to refinance facilities from banks exiting the Irish market.
Delivery of funding – two different approaches
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AIB€ 200 million facility
Single price for all SBCI loans up to € 5 million
Bank of Ireland
€ 200 million facilitySingle discount on pricing across all SBCI loans from
€25,000 up to €5 million
SBCI has made good progress to date
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Next steps: SBCI is set to support non-bank lenders to deliver
Invoice discounting – SBCI to boost
capacity of existing
providers
SME Vehicle Finance – SBCI to boost capacity and enable local small players to
compete effectively with
banks and international
providers with lower costs of
capital.
SME Asset Based Financing – SBCI to enable the entrance of
one or more international
platforms to the Irish market with
a competitive cost of capital.
SBCI is also ready to support
entry of new broad based SME lending
platforms to the market.
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Contact: Nick AshmoreTel: 01 238 [email protected]: @sbcireland
Microfinance Ireland
Who are Microfinance Ireland?
Set up by the government – not for profit
Loans to commercially viable businesses – outside banks risk criteria
Banks remain the primary supplier of finance to microenterprises
Co-funded loans with banks are also available
Fewer than 10 staff & turnover and/or Bal Sheet < €2m
Estimated to account for over 90% of businesses in Ireland & EU
May be a Start-Up or an Existing Business
Definition of a Microenterprise
Loan Size
Term
Interest Rate
Sectors
Loans between €2K - €25k
Maximum term of 5 years
8.8% APR fixed interest rate (discounted by 1% for LEO referrals)
All industry sectors including retail and services
Loan Features
Security
Flexible Terms
Borrowers
Purpose of Loans
Unsecured
Interest-only/phased drawdowns/bullet repayments
Sole trader/Partnership/Limited Company
Working capital/purchase of equipment/set-up costs/marketing
Loan Features
Microfinance IrelandSupporting the Governments Action Plan for Jobs
1500+ jobs supported
€10m+ approved to nearly 700 micro-enterprises
50% approval rate
60% start-up businesses /40% existing businesses
75% of loans outside Dublin
Business Activity To Date
Supporting Documentation
Start-Up Business Existing Business1. MFI Application Form
2. Business Plan to include -
- Cash flow projection (3-years) - Summary P&L (3-years)
3. 6-months personal Bank stmts* Tax Clearance Certificate required for drawdown
In addition to 1 – 3:
Recent Management A/Cs
Latest Certified Accounts
6-months business Bank stmts
Aged Debtors/Creditors List
Application forms & info available from:
www.microfinanceireland.ieor
www.localenterprise.ie
Access to Credit September 2015
Credit Review Office
1850 211 789 [email protected]
Service to SME / Farmer
Provides independent review of banks decision to refuse credit, restructure and refinance
Type of Credit Facility
Credit Facilities from €1k-€3m – loans, overdrafts, invoice discounting
Participating Banks AIB, Bank of Ireland, Ulster Bank – & PTSB next
Sectors All sectors - Small and Medium enterprises incl farmers (>250 employees, >€50m t/o )
Borrowers Sole trader/partnership/limited company
Apply Direct www.creditreview.ie Locall 1850211789
Credit Review Office – Process
1850 211 789 [email protected]
Application Rejected?
Internal Bank Appeal
Credit Review Office Appeal
• Timescale – 4 to 6 weeks: Has Internal Appeal been done?Is all necessary information available?
• Application Form and Consent Form – summary, tick boxes• Nominal Fee - €100-€250• Bank to provide information used in reaching the credit decision
(business plan, projections etc submitted)• Output: Opinion, 5-6 pages with Recommendations for Borrower and
Bank, and Agreed Next Actions from BankBANK MUST COMPLY OR EXPLAIN
1850 211 789 [email protected]
Case Assessment
Assessing viability / ability to repay
•What market is the enterprise involved in-growing or declining?•Promoters Experience/Capability•Past Performance - historic profit/cash flow
(past 2 years may not be indicative)•Future Potential - projected profit/cash flow
have steps been taken to improve situation•Performance against projections so far•Sales pipeline•Aged Debtors and Creditors•Statement of Assets and Liabilities of promoters
1850 211 789 [email protected]
Credit Review Office Statistics
Cases Concluded
Bank Decision Upheld
Bank Decision Disputed
Withdrawn % Overturned
Credit Recommended
Jobs Protected
Total 479 186 235 58 55% €33.5m 2299
Cases Reviewed
Bank Decision Upheld
Bank Decision Overturned
% Overturned
Total 1836 1361 475 26%
Credit Review Office Case Statistics mid-Sept 2015
Banks’ Internal Appeals Statistics June 2015
SUPPORTING SMES CAMPAIGN
Problem: • Supports = high, Awareness = low• Well over 34 Government websites for business supports
Solution: • Put all the possible supports in one interactive place• Make the language business-friendly
Online Tool
www.supportingsmes.ie