Bank of Ireland (BoI) has established a €250 million fund to provide small and medium-sized businesses with access to working capital.
Damian Young, head of small business with BoI said the fund would be “no more expensive” than other lines of credit available to SMEs and was designed to support viable businesses finding it difficult to trade through the current downturn.
“The fund is there to tailor the supports to each institution. It may give longer moratoriums where required, it has that level of flexibility.” Loans can be repaid over a period of up to seven years.
Mr Young said the fund would not be open to every company as the bank was not in the “business of supporting weak firms”.
“Many businesses need a cash injection and this fund is designed to allow SMEs to extend their current financing requirements to meet their business needs. This fund will enable customers extend or restructure their existing facilities or introduce new facilities into the business,” he said.
Mr Young denied there had been any significant slowdown in lending to the sector by the bank, saying the rate of loan approvals over the first nine months of the year was only 2 per cent lower than the same period in 2007.
The fund is available to new and existing SME customers with the bank and has a variable interest rate of 7.5 per cent, although this is also flexible, Mr Young added.