Bank offers £50m lifeline to small businesses in the North
People in the North wanting to set up or expand small businesses were thrown a multimillion-pound lifeline today.
Confidence in the future of the crucial small business sector was displayed by Bank of Ireland when it announced a £50m (€63.6m) boost for the sector.
It has put the money into a three-year lending programme to support growth - and in a first for the North some of the money will be in unsecured loans of up to £50,000 (€63,606).
The bank said it wanted to dispel any fears that the global credit crunch meant there was no cash available for small business start-ups or expansions.
Launching its 'Essentials For Business' package for new and established small firms, the bank said the development of the small business sector was fundamental to the creation of a vibrant regional economy.
Michael Kidd, head of business banking at the bank in the North, said the package of support would include a loan pool of up to £50m (€63.6m) over the next three years, including loans which did not require small businesses to provide security against their borrowing.
“Some 98% of all businesses in Northern Ireland employ fewer than 50 people and research shows that banking support and hands-on advice are vital to their development,” he said.
Mr Kidd added that their small business package included free current account banking for two years and unsecured or secured loans plus the support of experts in areas critical to small businesses – such as employment law, website development, telecommunications, accounting software and insurance.
The bank believed it was the most comprehensive package in the market today.
Mr Kidd said the bank was concerned that global fears about the availability of credit might lead people starting or running small businesses to believe all banks were tightening their lending in the crucial sector.
“From the Bank of Ireland’s standpoint nothing could be further from the truth. Our commitment to our small business economy is fully demonstrated by this programme of loans and support, with the clear message that Bank of Ireland is open for business.
“Indeed this package with its unsecured lending element is a first for Northern Ireland.”
Mr Kidd said research by the Federation of Small Business indicated that four out of five small businesses regarded a local banking facility as important or very important.
The outlook for small business growth was very positive, he said, with the Federation of Small Business showing that, outside London, businesses in the North were the most likely in the UK to want to grow rapidly.
He said: “In addition, the Global Entrepreneurship Monitor reports that one in 20 of all adults in Northern Ireland in 2007 was involved in the various stages of setting up their own businesses.
“Helping new start-ups is a key priority for us and we believe this product offers the best deal for anyone launching their own business.
“While we all look forward to positive developments from the forthcoming investment conference in Belfast, the reality is that we will depend heavily on indigenous business as our springboard for growth in the economy.”
The package includes:
:: Unsecured overdraft and loans of up to £30,000 (€38,151) for start-ups and £50,000 (€63,609) for businesses established for more than two years;
:: Secured lending of up to £250,000 (€318,047) for all customers;
:: Fee-free banking for two years on all new accounts;
:: Free or discounted support from a range of partner organisations.
