start up gathering - driving business forward, tssg & south east bic

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

http://www.microfinanceireland.ie/

http://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


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


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


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