Jobs Initiative includes new SME loan scheme

"I am particularly pleased to be able to announce new initiatives to help get lines of credit flowing," said Minister Bruton. "Firstly, a partial loan guarantee scheme will be in operation by the autumn. This measure, which operates successfully in most of the countries with which we are competing, will be of particular help to precisely the innovative companies which we are trying to encourage as part of our growth strategy.

"Secondly, a micro-finance fund will provide funding for small loans to start-ups," he continued. "We recognise that the recovery will be driven, in part, by businesses which start up during the recession but many start-ups lack the small amounts of finance that can be the difference between success and failure. This commitment on a micro-finance fund is the government's contribution to filling this particular gap in the enterprise finance gap in the market.

"Third, it is clear that Government can also play a key role in improving cash flow to businesses, and from July 1 next, all government bodies (excluding commercial semi states) will be required to pay suppliers within 15 days of receipt of a valid invoice. Given that the public sector enters contracts with suppliers worth €15bn each year, the importance of such a policy for all the companies that do business with the State is clear."

Minister Bruton also welcomed the announcements by his colleagues Ministers Michael Noonan and Leo Vradkar of reductions in employers' PRSI, a targeted VAT reduction and in the travel tax.

He said his Government was also "determined to proceed with urgency to a major reform" of the "overtime and premium payments for Sunday working, the number of JLCs, and the general functioning and supervision of the system.

In addition to changes to the R&D tax credits today, Minister Bruton said he would shortly be announcing a further series of R&D investments "totalling more than €50m underpinning employment across a number of sectors".

Reaction

“The commitment to a loan guarantee scheme is welcome news for many credit-stretched businesses," said IBEC Director General Danny McCoy.
"The introduction of an Enterprise Loan Guarantee Scheme as long called for by Chambers Ireland will be welcomed by many struggling businesses," said Ian Talbot, Chambers Ireland Chief Executive.

Patricia Callan, SFA Director welcomed the statement that the pillar banks are to provide €30billion total new lending in the next three years, but stated that this would need "careful monitoring to ensure delivery".  

She expressed disappointment that the partial loan guarantee scheme was to be restricted to new or expanding commercially viable SMEs.  "Many existing businesses struggling to maintain employment could ultimately survive with the right credit facilities now, but the reality is that the banks have now become too risk adverse," she said.