The Government has launched an expanded credit guarantee scheme designed to help small businesses.
Minister for Employment and Small Business Pat Breen announced the move on Tuesday, saying the Government would assume a higher share of the risk under the scheme.
The new scheme, which follows amended legislation, increases the level of risk that the State will take to 80 per cent of individual loans. This makes it more attractive for lenders to advance loans to small- and medium-sized enterprises (SMEs).
The definition of loan agreements has also been extended under the scheme to include non-credit products such as invoice finance and leasing, and also to include overdrafts.
Since it introduced earlier versions of the schemes in 2012, some €65 million in bank loans have been approved for more than 400 small businesses to assist with working capital, purchase of equipment or premises, and product or service development.
Traditional collateral
“This move is a vote of confidence by Government in our SMEs, in particular those with novel products and approaches and those somewhat lacking in traditional collateral, and their ability to grow both their businesses and employment levels,” said Mr Breen.
He said he intended to work closely with the Strategic Banking Corporation of Ireland, the banks and all other finance providers, to ensure a major increase in SME take-up of this form of finance.
Chambers Ireland welcomed the move and said its timing was important.
"The announcement of the new scheme comes at a good time, as accessing the finance needed to expand and plan for growth is more important than ever for Irish SMEs as they face the challenges of planning for Brexit," said Chambers Ireland chief executive Ian Talbot.
He added that the improvements to the scheme would give greater flexibility to SMEs.
