SMEs to have access to state-backed loans if their lender leaves Irish market
The Government's credit guarantee scheme is being extended to cover businesses whose lenders, like Danske Bank, are leaving Ireland.
Small and medium enterprises (SMEs) will now have access to state-guaranteed refinancing loans if their lender is leaving the Irish market.
Up until now the Credit Guarantee Scheme was only available for new loans, not refinancings.
The maximum length of loans made under the scheme is also being extended, from three to seven years.
"Thousands of people in the SME community have been affected by the exit of some foreign banks from the business credit market here," said Minister for Business Ged Nash.
"The problem arises when these SMEs seek refinancing loans, often with relatively short timeframes, and are not able to meet the minimum stake requirements of the remaining banks."
The credit guarantee scheme was designed for businesses refused loans by banks. To bridge this hurdle it provides a 75pc guarantee to the lenders against any potential losses on the loans. Bank of Ireland, AIB and Ulster Bank participate.
The borrower pays a 2pc annual premium. 156 businesses have availed of the scheme since its launch in 2012.