Bank of Cyprus is ready to disburse the EIB loans in record time, having already scrutinised potential clients that meet the eligibility criteria set by the EIB, said Vassos Shiarlis, Bank of Cyprus Group General Manager Domestic Banking.
He explained that out of the EUR 120 mln that Bank of Cyprus signed a loan agreement with the EIB, some EUR 75 mln has been earmarked for Cyprus and the remaining EUR 45 mln for lending to SMEs in Greece.
Transaction rating
“I have received assurances from the EIB that they will process the applications submitted by Bank of Cyprus in the timeframe agreed and having given instructions to our branches and customer service units to deploy all resources available, I’m sure that we shall be able to disburse the loan amounts within three months,” said Shiarlis.
The record processing of the applications and their successful conclusion hinges on the applicant companies meeting the minimum eligibility criteria set by the EIB.
Shiarlis explained that in addition to the financial strength that SMEs need to meet, there is an added criteria of having a satisfactory transaction score, which in addition to the financial rating also includes the organisation structure as well as the guarantees that will be pledged to secure the loan.
Pricing
The better that an SME scores on the transaction rating, the better pricing the company will be able to secure, Shiarlis said, adding that the list of the applicants will be submitted to the EIB, which will have the final say on whether or not the applicant qualifies for the loan, the price and terms and conditions.
The pricing of the loans will be based on Euribor, plus a spread which is expected to cost the SMEs significantly less than the traditional loans.
EIB commitment
Shiarlis expects a flood of applications once the scheme is officially launched, considering that there is a backlog of applications already in the system.
“We have run internal checks and already identified the SMEs that would qualify to participate in the scheme.”
Shiarlis expects a minimum 5-6 times over-subscription for the EIB loans, but he is confident that the EIB will keep its promise to increase the amounts made available for such purposes, if and when the need rises.
“We at Bank of Cyprus have already positioned our staff and systems to vet the applications, help them complete their forms and after the transaction scores are issued, quickly submit the applications to the EIB for final approval. This is why I’m confident that we (Bank of Cyprus) will exhaust the money allocated to us, and we shall seek to secure additional funds from the EIB,” Shiarlis said, urging all SMEs to apply and position themselves to secure the preferential financing loans.
