Credit Guarantee Scheme Will Help Struggling Businesses

Speaking following the launch of the Credit Guarantee Scheme by the Minister for Jobs, Enterprise and Innovation, Richard Bruton TD, Fine Gael Cork North West Deputy, Áine Collins said the scheme will act as a lifeline to many businesses who cannot access credit.

"Our jobs market is in a transitional phase where we are moving from the failed, old economy of the past that was based on construction, banking and debt. We are moving to a more sustainable situation where the focus is on innovation, enterprise and exports. It is essential therefore, that we have the systems in place to support new business, especially those in sectors with whom banking institutions may not be familiar.

"The Credit Guarantee Scheme will initially facilitate up to €150 million of additional lending to SMEs, which will supplement the lending targets already set for the pillar banks. The scheme is designed to assist businesses who either have insufficient capital to access credit or the many newer sectors, such as the high-tech sector, which banks may feel pose too much of a lending risk, simply due to the fact that the bank has no history of dealing with businesses in these up and coming industries.

"A 75% State guarantee will be provided to banks against losses on these loans, giving the bank the security it needs to facilitate companies with the potential to grow into the future and to create jobs.

"This Government's primary focus is on getting people back to work. Schemes such as this and the Microfinance Fund, which came into force earlier this month and which is aimed at providing loans of up to €25,000 for businesses with fewer than 10 employees who have difficulty accessing credit."

(CD)