Allied Irish Banks PLC (AIB), Bank of Ireland PLC (IRE) and Ulster Bank Wednesday announced three EUR100 million loans with the European Investment Bank as funds for small- and medium-sized businesses, or SMEs.

AIB is offering loans through the fund at a variable interest rate which will be lower than its current market-leading startup loan rate of 4.65%. It plans to launch its EIB loan fund April 6.

Bank of Ireland said the funds will be available in April to new and existing SME business customers seeking loans from EUR50,000 to EUR300,000 at a "discounted" variable interest rate, adding that "flexible repayment terms are available."

A spokeswoman for Ulster Bank also said their loans would be offered to SMEs at discounted rates. Ulster Bank is a unit of Royal Bank of Scotland PLC (RBS.LN).

To qualify as an SME, Bank of Ireland said a company should have fewer than 500 hundred employees, no more than EUR75 million of net fixed assets per the balance sheet and not be more than 33% owned by a large corporate.

Minister for Finance Brian Lenihan said, "I very much welcome the support of the European Investment Bank in providing this significant lending facility for small and medium sized enterprises, which are of critical importance to the European economy in general and to smaller economies such as Ireland's in particular."

EIB vice-president responsible for lending activities in Ireland Plutarchos Sakellaris confirmed that the bank finalized agreements for the new loans, saying that helping SMEs is part of the EIB's new strategy to help Europe through the current fiscal crisis.

Halifax Bank of Scotland (Ireland) previously received EUR50 million in a similar investment fund loan from the European Investment Bank, which has earmarked Ireland as a "priority" country for funding.

-By Quentin Fottrell, Dow Jones Newswires; +353-1-676-2189; quentin.fottrell@dowjones.com