The state is backing a new multi-million fund for Irish businesses

THE STATE IS one of the backers of a new fund that is looking to provide multi-million euro loans to Irish small and medium businesses.

Established by UK specialist finance company BMS Finance, the €30 million fund is called BMS Finance Ireland. It is targeting loans of between €1 million and €3 million, although it said loans from anywhere between €500,000 and €5 million will be considered.

It is backed by several investors, including the state’s investment vehicle the Irish Strategic Investment Fund (ISIF). The ISIF did not specify how much it invested in BMS Finance Ireland.

BMS, which also has a similar fund in the UK, concentrates on supporting entrepreneur- and owner-managed businesses, although it added that it will also look at venture capital or private equity-backed companies.

Double to €60 million

Shane Lanigan, a director of BMS Finance who will head up the fund, said that it will be looking to lend to companies from any sector except for property.

Speaking to Fora he said: “Given where the property sector is and where our pricing is, it is not appropriate (but) we have always looked at a broad range of sectors. Tech, media and financial services are core but we have also looked at everything from hospital operators to painting firms.”

Lanigan said that fund is looking to begin investing as quickly as possible, adding that there may be scope to double in size depending on demand.

“The UK fund doubled (from £30 million to £60 million) and for this fund the aim is in 15-18 months to get the initial funding out, bring in other investors and then increasing to €60 million.”

“We already have a number of deals deployed and hope to be announcing a few pretty soon.”

Irish Strategic Investment Fund Director Eugene O’Callaghan said that research has shown that early stage Irish SMEs often struggle to raise loans in the €1m to €3m range, adding that the BMS fund is targeted at “addresses this financing gap.”