Helping SMEs access funding via the SBCI scheme - Crowe Ireland

Helping SMEs access funding via the SBCI scheme

25/03/2020
Helping SMEs access funding via the SBCI scheme - Crowe Ireland

The COVID-19 pandemic continues to cause unprecedented business interruption across Irish enterprise. As businesses across every industry shut their doors for the foreseeable future, short- to medium-term liquidity will be a key challenge. The capacity to generate revenue in the short-term will be extremely limited for the majority of these businesses.

The Government and Irish banks have put in place measures to assist cash flows by agreeing to a three-month freeze on loan repayments for struggling businesses whose income has been reduced due to the outbreak. While this is a welcome pro-active step, it is clearly a short-term measure and unsustainable beyond this immediate timeframe.

The Strategic Banking Corporation of Ireland (SBCI) have announced a €200m Working Capital Loan Scheme for businesses impacted by COVID-19. The SBCI is a government agency with the primary mandate of providing flexible funding solutions to Irish SMEs. Funding under this scheme is provided via SBCI’s on-lending partners: Bank of Ireland, AIB and Ulster Bank. 

The headline features are:

  • Loans of between €25,000 and €1.5m
  • Terms ranging from 1 to 3 years
  • Up to €500k lending is available on an unsecured basis
  • Flexible repayment profiles (interest-only options)
  • Interest rate is determined by the on-lender but is capped at 4%

To meet the eligibility criteria, you must:

  • Qualify as a micro, small or medium-size enterprise (SME) or Small Mid-Cap enterprise*
  • Have been a viable trading business prior to the current pandemic
  • Have been materially affected by the COVID-19 pandemic (turnover or profitability must be down a minimum 15%)
  • Meet one of a range of criteria to validate that your business is focused on growth and innovation (notwithstanding current challenges)
  • Have no previous bankruptcy or credit issues 

The process to successfully draw down a facility involves the following steps:

  1. Complete an online application form from the SBCI website to determine eligibility
  2. Your eligibility will be assessed by the SBCI and if successful, you will be issued with a letter of confirmation (or approval code) to present to your bank
  3. Engage with your bank who will begin your loan application process and submit your application for credit approval via their usual channels.

The process of obtaining credit approval will require the provision of a business plan to include (at a minimum) summary financials, cash flows and a business overview. Crowe is well placed to assist you in preparing and delivering this vital information which will ultimately determine the success or otherwise of your loan application. 

Our corporate finance advisory team have a long-established track record of helping SMEs secure funding lines. We have developed strong and long-lasting relationships with all major lending institutions and can guide you through the process to help ensure a positive outcome.

This government-backed scheme is an important measure which will enable businesses who will undoubtedly run into cash flow difficulties to survive and grow in the medium term. No timeframes have yet been advised in terms of the length of the application process. Given the time-sensitive nature of the funding needs, we would expect that all parties will be fully engaged with a keen eye on swift and accelerated drawdowns. 

* SMEs are defined by the Standard EU definition [Commission Regulation 2003/361/EC] as enterprises that:

  • have fewer than 250 employees and have a turnover of €50 million or less (or €43 million or less on their balance sheet)
  • are independent and autonomous i.e. not part of a wider group of enterprises
  • have less than 25% of their capital held by public bodies
  • is established and operating in the Republic of Ireland

A Small Mid-Cap is an enterprise that is not an SME but has fewer than 500 employees.

Businesses with up to 499 employees can apply for eligibility to the scheme.

Naoise Cosgrove, Managing partner - Crowe Ireland
Naoise Cosgrove    
Managing Partner
Corporate Finance
Gerard O'Reilly, Partner, Audit - Crowe Ireland
Gerard O'Reilly  
Partner, Audit
Colm Sheehan - Crowe Irelnad
Colm Sheehan
Associate Director, Corporate Finance
Conor Grimes, Associate Director, Corporate Finance - Crowe Ireland
Conor Grimes
Associate Director, Corporate Finance