The announcement of the new Credit Guarantee Bill was warmly welcomed last week as it will provide much needed credit to an expected 1800 Irish businesses. The scheme will facilitate up to €150 million a year of additional lending to SMEs and will provide State guarantee for up to 75% to banks against losses on loans to firms with growth potential.
Industry experts and trade agencies are still questioning some aspects of the scheme including the issue that the duration of the Credit Guarantee Bill of 3 years may be too short of a loan time for many businesses. The scheme launch date is still unclear but it is thought to come into play at the end of the Summer.
What Business can and Cannot avail of the Credit Guarantee Scheme?
- Overdrafts, property related activities and agriculture are all excluded from the scheme.
- Food and drink sectors will be able to apply for the scheme.
- Business must be able to demonstrate that they have a good company record and have the ability to grow but just lack enough funding to reach their potential.
- In the case of start-ups, they will need to demonstrate the potential of the business to achieve sales should they be funded in order to receive funding under the scheme.
- To qualify, a firm must not employ more than 250 employees.