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What is the NI Small Business Loan Fund?

As part of its Access to Finance Strategy, Invest Northern Ireland has appointed Ulster Community Investment PLC (“UCI”) to manage and deliver the NI Small Business Loan Fund. The aim of the Fund is to ensure that businesses are not held back because they cannot access finance. UCI, a subsidiary of Ulster Community Investment Trust Ltd (UCIT), is authorised and regulated by the Financial Conduct Authority (FCA) (Firm ref no: 589719), and also holds an interim permission (No. 652674) with the FCA for consumer credit activities.

Who can apply?

Loans are available for individuals, private companies and social enterprises in the SME and micro enterprise size range, in the start-up and growth phases of development. Such enterprises are defined by the EU as:

  • A micro enterprise is defined as an enterprise that has fewer than 10 employees and has either an annual turnover of less than €2million or a balance sheet total not exceeding €2million.
  • A small enterprise is defined as an enterprise that has fewer than 50 employees and has either an annual turnover of less than €10million or a balance sheet total not exceeding €10million.
  • A medium enterprise is defined as an enterprise that has fewer than 250 employees and has either an annual turnover of less than €50million or a balance sheet total not exceeding €43million.

Businesses applying must be substantially based in Northern Ireland and must provide evidence of funding refusal from the private banking sector.

What are the terms?

There is a maximum loan amount of £15k to start-up enterprises, with potential for follow-on lending up to a maximum of £50k. Existing businesses can apply for loans of up to £50k.

Applicants will need to clearly demonstrate their ability to service the loan repayments.

The loans will typically be unsecured and personal guarantees may be sought.

Pricing will depend upon a risk assessment.

Mentoring support will be offered where loans of less that £15,000 are availed of.

Finance can be provided for:

  • Working Capital: money required to meet the day to day costs of running the business
  • Development Finance: money required to expand the business, for example marketing
  • Commercial Premises – (deposit, costs of moving, improvement)
  • Plant and Machinery – (deposit, tooling, installation, training)
  • Intangible Assets – (patent costs, IT software and licences)
  • Gaps in funding working capital where commercial funding sources (e.g. overdrafts and invoice finance) cannot provide the full requirement
  • Increasing sales, new contracts
  • Stock Purchases
  • International Trade

Exclusions

The following sectors are, however, specifically excluded:

  • Coal
  • Steel
  • Shipbuilding
  • Agriculture (primary producers) and
  • Enterprises in difficulty (within the meaning of the Community guidelines on State Aid for rescuing and restructuring firms in difficulty).

Fund Structure

Invest Northern Ireland is investing £5m into the NI Small Business Loan Fund which is constituted as a limited partnership. The Loan Fund will be disbursed within a 5 year period, and repayments and interest earned by the Fund will be recycled to provide further loans.

It will be run as a commercial fund and will therefore not be a “soft” source of loan finance.

The following typical* interest rates will apply:

Start Up Businesses – Fixed flat interest† rates range of 8% to 10% [APR circa 15% to 19%]. [Depending upon assessed risk]

and

Existing Businesses – Fixed flat interest rates range of 6% to 8% [APR circa 11% to 15%]. [Depending upon assessed risk]

*[Rate examples are for illustrative purposes only, and will vary depending on assessed risk]

†[“Fixed flat” means, Interest calculated on the original loan amount and added to the capital loan amount, repayable over the agreed term]

Interest rates  can also be clearly explained to the Loan Applicant by their respective NISBLF Loan Officer.

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The NI Small Business Loan Fund LP ("NISBLF") is a limited partnership registered in Northern Ireland (No. NL75) which is authorised and regulated by the Financial Conduct Authority ("FCA") to enter into regulated credit agreements as lender (FCA FRN 723971). NISBLF is operated by Ulster Community Investment plc ("UCI"), being a company incorporated in Northern Ireland (NI030229) which is authorised and regulated by the FCA for entering into regulated credit agreements on behalf of a lender and credit broking (FCA FRN 589719). The registered address of both NISBLF and UCI is 13-19 Linenhall Street, Belfast, BT2 8AA.