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You are > Home > AIB launches new scheme to support small business
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Wednesday, July 07, 2010
AIB launches new scheme to support small business
AIB’s new Small Business Recovery Scheme is providing €500m in additional working capital and restructuring facilities, writes David Dwane.
The scheme is specifically targeted at its small business customers, including sole traders, partnerships, limited companies and farming enterprises.
Available from 1 June, across all of AIB’s 270 branches, the aim of the scheme, the first of its kind, is to support viable small businesses through the current economic conditions. The scheme will achieve this by restructuring existing AIB borrowings and providing additional working capital to meet their business needs.
This initiative is part of AIB’s recapitalisation commitment to the Government for an additional €3bn in new or additional SME lending in each of 2010 and 2011. The key features of the AIB Small Business Recovery Scheme are:
Small business customers with existing branch based current and loan commitments can be ‘restructured’ into a single recovery loan
This ‘restructured debt’ will be offered by way of a recovery loan over an agreed term with an interest only option for up to the first two years and (if required),
Additional working capital facilities.
This restructuring along with the provision of additional working capital aims to ease cash flow pressures for micro/small businesses that are currently experiencing trading difficulties, who may have had difficulty in accessing credit in the past, but have good prospects of recovery and are viable in the longer term.
Credit facilities can be provided on the basis that the small business can demonstrate its ability to trade through the current challenges and recover within a reasonable timeframe e.g. two year period. Small business customers applying to this scheme will be required to complete a viability plan and provide certain information to AIB to enable it to make an assessment and credit decision.
Denis O’Callaghan, General Manager, Retail Banking Ireland, AIB said:
“We are acutely aware that the significant deterioration in the business environment continues to create severe cash flow difficulties for many of our business customers. Micro and small businesses in particular are significantly impacted by the difficult trading conditions, falling sales and slower payment cycles.
“We know we have a role to play in supporting our customers and in the general economic recovery. This scheme provides us with a mechanism to provide much needed ‘breathing space’ that small businesses need to ease cash flow and improve their prospects for recovery.”
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