Dáil Éireann debate -
Tuesday, 2 Jul 1996

Vol. 467 No. 7

Written Answers. - Business Expansion Loan Scheme.

Denis Foley

Question:

323 Mr. Foley asked the Minister for Tourism and Trade whether the small business expansion scheme for tourism is now fully operational; his views on whether it has been successful; and if he will make a statement on the matter. [14470/96]

Minister for Tourism and Trade (Mr. E. Kenny)

The small business expansion loan scheme announced in the 1994 budget made a £100 million loan fund available to small businesses in the manufacturing, tourism and international traded sectors, £25 million of which was allocated specifically for projects in the tourism sector.

The scheme, which was administered by ICC Bank plc, provided low fixed interest (6.75 per cent p.a.), long-term loans (up to 10 years), of between £40,000 and £500,000 to eligible businesses employing less than 50 persons. Eligible tourism projects included Bord Fáilte registered accommodation and Bord Fáilte and Shannon Development approved tourism products and services. New projects and significant extensions-improvements to existing projects were eligible.

The success of this scheme is evident from the fact that the £25 million allocated for tourism projects was fully approved at end September, 1994. All of the funds were drawn down at the end of April 1996. A total of 120 tourism projects (borrowers) were assisted and over 2,000 associated jobs maintained or planned.

Following from the success of this scheme, the Government introduced a new subsidised loan scheme, the access to finance scheme, on 12 September, 1995. This fund is being administered by the AIB, Bank of Ireland, National Irish Bank and Ulster Bank. A minimum of £52 million (25 per cent of the fund) is reserved for the tourism sector. The loans are for a fixed term of seven years at a fixed interest rate of 6.5 per cent. This fund provides a minimum loan size of £20,000 while the maximum loan size is £500,000. Projects are eligible on a similar basis to the small business expansion loan scheme. Again, I understand that virtually all the funds available under the scheme have been approved at this stage.