A €70m fund has been launched for SMEs to lease specialist gear and vehicles

THE STATE’S BUSINESS lender has partnered with a financial services firm to offer funding for SMEs to borrow for specialist equipment and vehicles.

The Strategic Banking Corporation of Ireland (SBCI) has partnered with Fexco Asset Finance to offer the €70 million fund.

Small- and medium-sized businesses can access this finance with a discount of 1.57%.

Fexco, an Ireland-founded multinational with operations in 29 countries, covers nearly 70 different asset types including production line equipment, medical apparatus as well as cars and vans.

The firm’s chief executive, Mike O’Halloran, said the multimillion-euro fund can “support growth while facilitating improved cash flow management” and promised a quick turnaround on loan applications.

SBCI’s boss Nick Ashmore said the Fexco partnership “will cover, in particular, asset types which have traditionally been more difficult for businesses to finance”.

“It has been a busy and exciting year for SBCI with the addition of four new lenders,” he said.

“Looking ahead to 2017, we will continue to play our part in supporting growth in Irish businesses through the management of the credit guarantee scheme, launching the new agri cash flow support loan for farmers, and driving awareness of our lower cost finance.”

SBCI chief Nick Ashmore

Lower cost

During 2016, SBCI has provided funding to four new lenders – Ulster Bank, First Citizen, Bibby Financial Services and now Fexco – and in July announced it had facilitated more than 8,600 loans since setting up in early 2015.

The SBCI recently released figures which showed its loans were an average of 1.5 percentage points below market rates. It offers a number of products to SMEs including working capital, investment, agri-finance, invoice finance and fleet finance.

Local SMEs have in recent years been paying the highest interest rates in the EU, with access to funding also highlighted as a major stumbling block for firms. Businesses in Ireland are also more dependent on bank finance than in most countries across the European.

SBCI has now committed €906 million in lower cost loans through eight institutions including five non-banks.

Today’s announcement was welcomed by Minister for Finance Michael Noonan who said the partnership was an example of the government’s promise to increase funding for small businesses through alternative sources of finance.