The European Commission has announced a new initiative that allows the Government to use part of its structural funds to help Irish entrepreneurs access finance to grow their businesses.
The new funding programme, known as Jeremie (Joint European Resources for Micro-to-Medium Enterprises), will see the Government using structural funds to provide venture capital, credit facilities and loans to businesses through the European Investment Fund.
The scheme will be launched today.
Announcing the new funding programme, Martin Territt, director of the European Commission representation in Ireland, said this radical rethink of how to use the structural funds would transform the financial environment for small Irish businesses.
"Irish small businesses are faced with huge obstacles in getting start-up capital and loans, yet they are the lifeblood of the economy. It's absolutely crucial that we act now to support Irish entrepreneurs to ensure continued prosperity," he said.
A Small Business Forum report recently identified that improving access to finance was one of the key areas where action must be taken in order to stimulate growth.
Mr Territt said that the Commission's new approach means that financial institutions in Ireland will be able to provide European Investment Fund (EIF) guaranteed loan finance on competitive terms to small businesses, and give them the boost they need to get their businesses up and running.
The first phase of the Jeremie programme consists of an evaluation of the supply of finance and an assessment of small business needs by the European Commission and the EIF.
These organisation will work closely with national authorities and financial institutions at national level.
During the 2007 to 2013 budgetary period, the national authorities can decide to allocate resources from their structural funds into a holding fund, which could be a suitably qualified financial institution at national level.
The role of the holding fund will be to organise calls for expressions of interest addressed to all interested financial intermediaries, such as venture or seed capital funds, start-ups, technology or technology transfer funds, guarantee or mutual guarantee funds, loan funds and micro credit providers.
The holding fund, which will work closely with the national managing authority, will evaluate, select and accredit financial intermediaries.
It will be able to provide them with equity, loans or guarantees, as well as technical assistance as appropriate.
The selected financial intermediaries will in turn be responsible for making funds available on competitive terms to micro, small or medium-sized enterprises.
Special emphasis will be given to supporting the growth and jobs agenda, by emphasising technology transfer, start-ups, technology and innovation funds and micro credit, according to the Commission.
