Dáil Éireann debate -
Thursday, 17 Oct 1996

Vol. 470 No. 3

Written Answers. - Small Business Expansion Scheme.

Liz O'Donnell

Question:

36 Ms O'Donnell asked the Minister for Tourism and Trade if consideration is being given to the continuation of the small business expansion loan scheme for projects in the tourism sector; and if he will make a statement on the matter. [18856/96]

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, long-term loans up to ten 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 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. The banks have indicated that they expect all the funds will be drawn down by the end of this year.

The introduction of a further small business loan scheme would be a matter, in the first instance, for my colleague the Minister for Enterprise and Employment who has assured me that, should another scheme be devised, the importance of the tourism sector to the economy, which was recognised in the small business expansion loan scheme and the access to finance scheme, will not be overlooked.