SBCI Brexit Loan Scheme

Eligibility Criteria

 

Additional Borrower Eligibility Criteria” means, in respect of a Borrower and a Borrower Transaction covered by a Financing:

(a) each of the following has occurred:

    (i) the Borrower has been deemed eligible to participate in the SBCI Scheme by the SBCI; and

    (ii) the Borrower has been issued with a unique eligibility code which is verified by AIB; and

(b) the Borrower has provided a business plan to AIB.

 

Brexit Eligibility Criteria” means the following criteria:

(a) the Borrower exports products, services or raw materials to the United Kingdom equating to at least 15% of its turnover;

(b) the Borrower imports products, services or raw materials from the United Kingdom equating to at least 15% of its turnover;

(c) the Borrower’s combined exposure under paragraphs (a) and (b) above equates to at least 15% of its turnover; or

(d) the Borrower is indirectly exposed to the United Kingdom by transacting business in products, services or raw materials with an enterprise that is itself directly exposed to the United Kingdom equating to 15% of its turnover (where “indirectly exposed” means indirect exposure by virtue of conducting business with an enterprise directly exposed to the United Kingdom).

 

Borrower Eligibility Criteria” means that the Borrower under the Borrower Transaction covered by a Financing:

(a) is an SME or Small Mid-cap;

(b) has complied with at least one of the Innovation Eligibility Criteria and at least one of the Brexit Eligibility Criteria;

(c) is not an “undertaking in difficulty”* (within the meaning of the Commission Regulation (EU) No C(2014) 651/2014 of 17 June 2014 declaring certain categories of aid compatible with the internal market in application of Articles 107 and 108 of the Treaty as amended, restated, supplemented and/or substituted from time to time);

(d) does not have a substantial focus on one or more Restricted Sectors (which determination shall be made by the SBCI in its discretion based, without limitation, on the proportionate importance of such sector on revenues, turnover or client base of the relevant Borrower);

(e) is not delinquent[1] or in default under any agreement with AIB or another financial institution to the extent that such delinquency or default would dissuade AIB (entirely at its discretion) from lending to that Borrower, pursuant to checks made in accordance with the AIB’s internal guidelines and credit and collection policy;

(f) is not established in a Non-Cooperative Jurisdiction;

(g) is established and operating in Ireland;

(h) is not bankrupt or being wound up or having its affairs administered by the courts;

(i) in the last 5 years has not entered into an arrangement with creditors, in the context of being bankrupt or wound-up or having its affairs administered by the courts; and

 

[1] Delinquent means in arrears < 90 days (90 days or greater is therefore in default).

 

Borrower Transaction Eligibility Criteria” means the following criteria:

(a) the Borrower Transaction is entered into as a new Borrower Transaction with AIB during the Inclusion Period (provided that the refinancing of an existing transaction before the maturity date of such existing transaction shall not be eligible);

(b) AIB has verified the unique eligibility code issued to the Borrower by the SBCI and the Borrower presenting itself to AIB is the same Borrower and legal entity to whom the code has been issued; 

(c) the Borrower Transaction at the date of uploading the Borrower and the Borrower Transaction details as specified in the Operating Model to the Designated Portal complies with any criteria set down in the Operating Model from time to time, and;

(d) is not a Borrower to which the AIB has assigned an internal credit rating worse than the AIB’s credit grade equivalent of Moody’s grade “Caa1”.

 

 “Innovation Eligibility Criteria” means the following criteria:

(a) the Borrower is an SME or a Small Mid-cap that intends to use the loan proceeds to invest in producing, developing or implementing new or substantially improved products, processes or services that are innovative (as defined in the paragraphs 15(y) and 15 (bb) of 1.3 Definitions of the Communication from the Commission C(2014) 3282 of 21 May 2014 on the Framework for state aid for research and development and innovation) and where there is a risk of technological or industrial failure as evidenced by an evaluation carried out by an external expert;

(b) the Borrower is a “fast-growing enterprise” which is an entity operating in a market for less than 12 years with an average annualised organic[1] growth greater than 20% a year in employees or in turnover, over a three-year period, and with ten or more employees at the beginning of the observation period;

(c) the Borrower has been operating in a market for less than 7 years following its first commercial sale and its R&I Costs represent at least 5% of its total operating costs in at least one of the immediately preceding three years, or in the case of an enterprise (and particularly a start-up) without any financial history, according to its current financial statements;

(d) the Borrower is an SME or Small Mid-cap that shall have a significant innovation potential or be an “R&I-intensive enterprise”, by satisfying at least one of the following conditions:

    (i) the Borrower undertakes to spend an amount at least equal to 80% of the Borrower Transaction amount on R&I activities as indicated in its business plan and the remainder on costs necessary to enable such activities;

    (ii) the Borrower has been formally awarded grants, loans or guarantees from European R&I support schemes (e.g. Horizon 2020 or FP7) or through their funding instruments (e.g. Joint Technology Initiatives or “Eurostars”) or regional, national research or innovation support schemes over the last thirty-six (36) months, under the condition that the Borrower Transaction is not covering the same expense the subject of such grant, loan or guarantee;

    (iii) the Borrower has been awarded over the last twenty-four (24) months an R&D prize or Innovation prize provided by an EU institution or an EU body;

    (iv) the Borrower has registered at least one technology right (such as patent, utility model, design right, topography of semiconductor products, supplementary protection certificate for medicinal products or other products for which such supplementary protection certificates may be obtained, plant breeder’s certificate or software copyright) in the last twenty-four (24) months, and the Borrower Transaction purpose is to enable, directly or indirectly, the use of this technology right;

    (v) the Borrower is an early stage SME and has received an investment over the last twenty-four (24) months from a venture capital investor or from a business angel being a member of a business angels network; or such venture capital investor or business angel is a shareholder of the Borrower at the time of the Borrower’s application for the Borrower Transaction;

    (vi) the Borrower is an SME and its R&I Costs represent at least 10% of its total operating costs in at least one of the three years preceding the Borrower’s application for the Borrower Transaction, or in the case of an enterprise without any financial history, as per its current financial statements;

    (vii) the Borrower is a Small Mid-cap and its R&I Costs represent:

        (A) at least 15% of its total operating costs in at least one of the three years preceding the Borrower’s application for the Borrower Transaction; or

        (B) at least 10% per year of its total operating costs in the three years preceding the Borrower’s application for the Borrower Transaction; or

    (viii) the Borrower intends to enter a new product or geographical market and the required investment is more than 50% of its average annual turnover in the five years preceding the Borrower’s application for the Borrower Transaction.

 

[1] Organic growth – i.e. not through acquisition or takeover.

 

Ongoing Eligibility Criteria

 

Borrower Eligibility Criteria” means that the Borrower under the Borrower Transaction covered by a Financing:

(a) is not performing illegal activities according to applicable legislation in the country of the SBCI, AIB or the Borrower (including national, Union and international legislation, including the Charter of Fundamental Rights of the European Union and the European Convention on Human Rights and its Supplementary Protocols);

(b) it, or any corporate entity connected with it (where “connected” has the meaning given to it in Section 10 of the Taxes Consolidation Act, 1997 (as amended)), is not active in any sector in Ireland outside the scope of the SBCI Scheme being:

    (i) any of the Restricted Sectors as set out below; and

    (ii) the Borrower is not involved or active in:

        (A) the primary agricultural sector; and/or

        (B) the fishery and/or aqua-cultural sector;

(c) has not received loans under the SBCI Scheme of more than €1,500,000 (which includes, for the avoidance of doubt, the proposed loan), in aggregate per Borrower; 

(d) has not received, including under the applicable Financing, Aid in excess of what is permitted under the De Minimis Regulation;

(e) has not been convicted of an offense or subject to a ruling concerning professional conduct, fraud, corruption, involvement in a criminal organisation, money laundering or any other illegal activity where such illegal activity is detrimental to the European Union’s financial interests.

 

Borrower Transaction Eligibility Criteria” means the following criteria:

(a) the purpose of the Borrower Transaction Documents state that the purpose of the Borrower Transaction is to provide funding for:

    (i) working capital requirements; and

    (ii) innovation, change or adaption of the Borrower’s business to mitigate the impact of Brexit (subject to any conditions imposed on the purpose of the Borrower Transaction by the SBCI Scheme),

which for the avoidance of doubt does not include any of the following:

        (A) financing of an “undertaking in difficulty” (within the meaning of the Commission Regulation (EU) No C(2014) 651/2014 of 17 June 2014    declaring certain categories of aid compatible with the internal market in application of Articles 107 and 108 of the Treaty as amended, restated, supplemented and/or substituted from time to time);

        (B) refinancing existing debt owed by the Borrower;

        (C) financing of a trade finance product linked to specific/individual export operation, expenditure or activity or financing that it targeted to exploit a specific export market;[1]

        (D) financing contingent upon the use of domestic products over imported products;[2]

        (E) financing the establishment and operation of a distribution network in other Member States of the European Union;[3] or

        (F) financing the purchase of road freight transport vehicles.

(b) the Borrower Transaction provides for a minimum amount of principal committed to be available for utilisation of €25,000 and a maximum of not more than €1,500,000 in aggregate per Borrower;

(c) the Borrower Transaction has a minimum scheduled maturity of not less than 12 months and a maximum scheduled maturity of 3 years from the date that the relevant Borrower Transaction is drawn down;

(d) the Borrower Transaction provides for a rate of interest payable by the Borrower of not more than 4 per cent per annum (including all fees (other than surcharge interest) applicable to the loans) fixed for the term of the loans;

(e) the Borrower Transaction is denominated in euro;

(f) prior to the date of entry of the Borrower Transaction, the Borrower must (subject to a credit assessment by AIB of the Borrower's ability to repay such loan) have had the option to avail of interest only repayments for the first 1/3rd term of the loan;

(g) the documents evidencing the relevant Financing or, as applicable, Borrower Transaction contain, at the minimum, the terms set out in Schedule 10 (Terms and Conditions for insertion in Borrower Transactions);

(h) any Borrower Transaction shall not have a final repayment instalment of in excess of 30% of the initial principal amount of the Borrower Transaction.

 

[1] (e.g. an export exchange document or other traditional export finance product such as bonding and insurance that is funding a specific/individual export order or loan targeted to exploit a specific export market).

[2] It cannot be a condition of the loan to buy Irish products over imported products.

[3] (e.g. financing that is targeted to exploit a specific export market).

 

Restricted Sectors

 

1. Illegal Economic Activities

Any production, trade or other activity, which is illegal under the laws or regulations of the home jurisdiction for such production, trade or activity (“Illegal Economic Activity”).

Human cloning for reproduction purposes is considered an Illegal Economic Activity.

2. Tobacco and Distilled Alcoholic Beverages

The production of and trade in tobacco and distilled alcoholic beverages and related products.

3. Production of and Trade in Weapons and Ammunition

The financing of the production of and trade in weapons and ammunition of any kind. This restriction does not apply to the extent such activities are part of or accessory to explicit European Union policies.

4. Casinos

Casinos and equivalent enterprises.

5. IT Sector Restrictions

Research, development or technical applications relating to electronic data programs or solutions, which:

    (a) aim specifically at:

        (i) supporting any activity included in the Restricted Sectors referred to under 1. to 4 (inclusive) above;

        (ii) internet gambling and online casinos; or

        (iii) pornography.

or which:

    (b) are intended to enable to illegally:

        (i) enter into electronic data networks; or

        (ii) download electronic data.

6. Life Science Sector Restrictions

When providing support to the financing of the research, development or technical applications relating to:

    (a) human cloning for research or therapeutic purposes; and

    (b) Genetically Modified Organisms (“GMOs”),

the SBCI will require from AIB appropriate specific assurance on the control of legal, regulatory and ethical issues linked to such human cloning for research or therapeutic purposes and/or GMOs.

 

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    Undertaking in Difficulty

    * Undertaking in Difficulty Definition in Commission Regulation (EU) 651/2014 of 17 June 2014

    18) ‘undertaking in difficulty’ means an undertaking in respect of which at least one of the following circumstances occurs:

    • (a) In the case of a limited liability company (other than an SME that has been in existence for less than three years or, for the purposes of eligibility for risk finance aid, an SME within 7 years from its first commercial sale that qualifies for risk finance investments following due diligence by the selected financial intermediary), where more than half of its subscribed share capital has disappeared as a result of accumulated losses. This is the case when deduction of accumulated losses from reserves (and all other elements generally considered as part of the own funds of the company) leads to a negative cumulative amount that exceeds half of the subscribed share capital. For the purposes of this provision, ‘limited liability company’ refers in particular to the types of company mentioned in Annex I of Directive 2013/34/EU and ‘share capital’ includes, where relevant, any share premium.

    • (b) In the case of a company where at least some members have unlimited liability for the debt of the company (other than an SME that has been in existence for less than three years or, for the purposes of eligibility for risk finance aid, an SME within 7 years from its first commercial sale that qualifies for risk finance investments following due diligence by the selected financial intermediary), where more than half of its capital as shown in the company accounts has disappeared as a result of accumulated losses. For the purposes of this provision, ‘a company where at least some members have unlimited liability for the debt of the company’ refers in particular to the types of company mentioned in Annex II of Directive 2013/34/EU.

    • (c) Where the undertaking is subject to collective insolvency proceedings or fulfils the criteria under its domestic law for being placed in collective insolvency proceedings at the request of its creditors.

    • (d) Where the undertaking has received rescue aid and has not yet reimbursed the loan or terminated the guarantee, or has received restructuring aid and is still subject to a restructuring plan.

    • (e) In the case of an undertaking that is not an SME, where, for the past two years:

    (1) the undertaking's book debt to equity ratio has been greater than 7,5 and

    (2) the undertaking's EBITDA interest coverage ratio has been below 1,0.

     

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Important/Regulatory Information

Warning: The entire amount you have borrowed will still be outstanding at the end of the interest-only period.

Warning: You may have to pay charges if you repay early, in full or in part, a fixed-rate credit facility.

AIB will not apply charges if you repay an SBCI Brexit Loan early.

 

The Brexit Loan Scheme is being offered by the Strategic Banking Corporation of Ireland in partnership with the Department of Business, Enterprise and Innovation, the Department of Agriculture and the Marine and is supported by the InnovFin SME Guarantee Facility, with the financial backing of the European Union under Horizon 2020 Financial Instruments and the European Fund for Strategic Investments (EFSI) set up under the Investment Plan for Europe. The purpose of EFSI is to help support financing and implementing productive investments in the European Union and to ensure increased access to financing.

It is important to be aware that AIB is obliged to share personal information about successful applicants with the SBCI and this information will also be shared with EU Bodies and State Bodies. This will be done with regard to obligations under data protection legislation. You can read our Data Protection – Use of Information Notice by visiting our website or contact us directly for more information on how we use your information.

For information on how the SBCI handles personal data, including information about your data protection rights (in respect of the SBCI) and the contact details of the SBCI’s data protection officer, please refer to the SBCI’s data protection statement.

You also need to be aware that you will need to keep and be able to produce all documents relating to the SBCI Brexit Loan Scheme for a period of 7 years from the end of your loan.

If you provide false information in relation to your eligibility for the Scheme or the amount of State Aid received, AIB are obliged to share this information with the SBCI who may take further action. This may also result in the termination of your loan facility and a demand for early repayment in full.​

Lending Criteria, terms and conditions apply. Credit facilities are subject to repayment capacity and financial status and are not available to persons under 18 years of age. Security may be required.