Ireland’s Credit Guarantee Scheme that’s expected to provide an additional €150m in lending for small businesses per year over the next three years will go live on Wednesday, 24 October, the Taoiseach, the Tánaiste, and the Minister for Jobs, Enterprise and Innovation have announced. For every €150m of additional lending, the scheme is expected to benefit more than 1,800 businesses and create more than 1,300 jobs.
"Getting Ireland working again remains the top priority of the Government and in the Action Plan for Jobs we have an essential tool in building the new economy,” Taoiseach Enda Kenny said.
“Through the Action Plan we will add to the growing trend of private-sector job creation which builds on the 17,000 private-sector jobs created since March 2011 …. The focus now is to get all remaining measures delivered before the end of the year.”
The leaders also revealed that 58 out of 67 measures scheduled in the Action Plan for Jobs to be delivered in 2012’s third quarter have been implemented. All actions scheduled for delivery in the first and second quarters have been implemented, indicating an overall implementation rate of 96pc so far this year. These include:
· The establishment of new technology centres in cloud computing, learning technologies and financial services. These are collaborative entities established and led by industry, focused on research with an impact on industry.
· The launch of Smart Futures, a science, technology, engineering and maths careers partnership between ICT Ireland, the Irish Medical Devices Association, Engineer’s Ireland (STEPS) and SFI/Discover Science and Engineering.
· The launch of the Microfinance Fund, which will provide for loans of up to €25,000 for viable businesses with less than 10 employees who have had difficulty accessing credit from the banking sector.
· The enactment of legislation that will ensure procedurally robust wage-setting mechanisms.
The Credit Guarantee Scheme
The Credit Guarantee Scheme aims to provide credit to job-creating SMEs which struggle to get finance from the banks.
The scheme is intended to address market failure affecting commercially viable businesses where businesses have insufficient collateral, and where businesses operate in sectors with which the banks are not familiar. It provides a 75pc State guarantee to banks against losses on qualifying loans to firms with growth and job-creation potential.
Initially, the scheme will facilitate up to €150m of additional lending per annum to SMEs, in addition to the lending targets set for the pillar banks. The scheme will be demand-led, and take-up and performance will be closely monitored.
“Today’s launch of the Credit Guarantee Scheme is another important step forward,” Tánaiste Eamon Gilmore said. “It is part of our broader strategy to provide credit to business and recognises the central importance of the small business sector to Ireland’s continued recovery.”
The Minister for Jobs, Enterprise and Innovation Richard Bruton said the Irish economy is in transition, and the Government’s plan is aimed at supporting that process, creating a powerful engine of indigenous enterprise and rebuilding an economy based on enterprise, exports and innovation.
“Through continued strong implementation of the plan we are determined to ensure that we can continue to see positive news like the recent investments, supported by my department, by companies like EA Games, Northern Trust, Kerry Group and Stiefel,” Burton said.
Business financing image via Shutterstock