Bruton inks €400m business loan scheme
The Government is to guarantee €400m of loans to start-up firms and small and medium-sized enterprises (SMEs) through a scheme designed to boost good businesses to which the banks are failing to lend.
The move comes following a war of words which broke out earlier this week between AIB and Bank of Ireland and business group ISME over whether there was a low demand for credit for SMEs or whether the banks were refusing to lend to them.
The funds will be directed toward growing firms that don't have collateral, are in sectors unfamiliar to the banks, or are in markets or have business models that the banks judge to be higher risk.
Jobs and Enterprise Minister Richard Bruton said: "The businesses we expect to benefit are exactly the kinds of young, innovative companies that will create the jobs of the future here."
Loan guarantees have long since been called for by ISME. A similar scheme has been running in Britain since 2008.
A contract for the design of the Temporary Partial Credit Guarantee Scheme was awarded last week to a British government-owned outfit, Capital for Enterprise -- which runs similar schemes that have lent more than £3bn (€3.4bn) there since 2008. It will begin operating later this year.
- JOHN REYNOLDS
