Credit Guarantee Scheme is welcome support for business

The Credit Guarantee Scheme will be operational from Wednesday 24th October. It is a support business urgently needs. The recent EU Commission Overview of Competitiveness across 27 member states shows that lending to small and medium enterprises (SME’s) is Ireland’s weakest area and an issue we need to urgently address.

SME access to bank lending is critical to enterprise, innovation, and job creation and we are currently the second poorest performer on this measure in the EU, above only Greece.
However, this Government is delivering on its promise and is committed to tackling this problem. The extra €150 million

per annum in lending from this scheme will address market failures, support entrepreneurs and help create 4,000 new jobs.

We also must ensure the pillar banks are meeting their lending targets to SME’s and I intend to question both AIB and Bank of Ireland on this issue when they appear before the Oireachtas Finance Committee at the end of October.

 

How to apply

– Applications for credit should be made to the participating banks in the usual way. The lender will assess the application. In the event that the lender determines that the application is viable but not approved because of insufficient security or higher risk in the case of a growth/expansionary SME, the lender will then determine eligibility under the Scheme. In the event that an SME has an application for credit refused by one of the participating lenders, the customer can request the bank to consider the application under the Credit Guarantee Scheme.

Initially, Bank of Ireland, Allied Irish Bank and Ulster Bank will participate, however the Scheme will be open to other lenders, subject to an accreditation process.