Funding scheme to create 7,700 jobs
BANKERS AND small businesses alike have welcomed the Government’s announcement of a new funding scheme for microenterprises.
Minister for Enterprise Richard Bruton yesterday unveiled details of the Microenterprise Loan Fund Scheme, which will make over €90 million in extra lending available to 5,500 businesses over the next decade. The Minister predicted the scheme, which is due to become operational this autumn, will create 7,700 jobs.
In the initial stage of the scheme, €40 million will be made available for lending to businesses with no more than 10 employees. This phase will span five years, but provision has also been made for an additional €50 million to be provided over a further five-year period.
The Department of Jobs, Enterprise and Innovation said start-ups, existing microenterprises and sole traders will be eligible to apply for loans. In order to qualify, applicant firms must have already had a request for credit declined by banks.
“The scheme will provide loans for commercially viable proposals that do not meet the conventional risk criteria applied by the banks for various reasons, including the absence of collateral,” it said.
The average loan is expected to be €16,000, but sums of up to €25,000 will be available.
The scheme will be operated by Microfinance Ireland, a subsidiary of Social Finance Foundation.
Patricia Callan of the Small Firms Association said the scheme has real potential to deliver credit to viable businesses that do not fit the “risk-averse criteria” set out by the mainstream banking sector.
The Irish Banking Federation and business lobby group Chambers Ireland also welcomed the announcement.