The Government recognises that small businesses, including those in the hotel and catering industry, play a central role in the sustainable recovery of the Irish economy. To facilitate this, Government policy since 2011 has been focused on ensuring that all viable SMEs have access to an appropriate supply of credit from a diverse range of bank and non-bank sources.
The Government understands the importance of the hotel and catering industry and have been supportive with measures such as the new 9% VAT rate, the Gathering Ireland 2013, the reduced 0% Air Travel Tax and the Visa Waiver. In addition I extended the Employment and Investment Incentive to include hotels, guest houses and self-catering accommodation in recent Budgets.
Recent CSO figures indicate that overseas trips to Ireland increased by 14.1% for the first quarter in 2015 while total tourism and travel earnings from overseas travellers to Ireland increased by 11.6% compared to the first quarter in 2014.
My Department has been involved in a range of initiatives to encourage access to credit for small and medium sized businesses, and the SME State Bodies Group, which includes representation from Fáilte Ireland, provides a forum for the development and implementation of policy measures to enhance SMEs' access to a stable and appropriate supply of finance.
The following provides an overview of some other incentives introduced by Government to encourage access to credit for small business:
- The Strategic Banking Corporation of Ireland has been established to encourage small business, as an additional means of ensuring that SMEs are provided with sufficient access to credit, with increased flexibility such as loans of longer duration and loans with built-in payment holidays. SBCI loans are currently available through AIB and BOI and subsequent phases will see the SBCI supporting smaller, existing bank and non-bank funding providers and bringing in new participants to the Irish market.
- The Credit Guarantee Scheme encourages additional lending to small businesses by offering a partial Government guarantee to banks against losses on qualifying loans to eligible SMEs.
- The Microenterprise Loan Fund, administered by Microfinance Ireland, was established under the Action Plan for Jobs and can provide loans of up to €25,000 to small businesses who have been refused credit by commercial banks. Microfinance Ireland works in partnership with the Local Enterprise Offices LEOs nationally to administer this fund.
- The Credit Review Office helps SME or Farm borrowers who have had an application for credit of up to €3 million declined or reduced by either Bank of Ireland or Allied Irish Banks, and who feel that they have a viable business proposition. The Ulster Bank have recently joined the Credit Review office on a non-statutory and voluntary basis. The Credit Reviewer John Trethowan and his team have overturned 55% of the refusals that have been appealed to the Office. Further details are available at www.creditreview.ie.
- With over €2bn of Government supports available to small business in Ireland from over 20 Departments and Agencies, it is vital that SMEs can quickly access information on this range of supports available to them. With this in mind, the Supporting SMEs Online Tool, a cross-government initiative, was launched in May 2014. On answering 8 simple questions, the small business will receive a list of available Government supports. The Supporting SMEs Online Tool is available at www.localenterprise.ie/smeonlinetool.
Officials from my Department meet the small business representative organisations on a regular basis and the information provided at these meetings, in tandem with the monthly granular sectoral data received from AIB and Bank of Ireland, ensure that my Department is aware of the credit requirements and issues arising in the relevant sectors. The Credit Reviewer, who is tasked with ensuring that no sector or region is disadvantaged in terms of bank lending, has not highlighted any particular deficiencies in the hotel and catering sector. He, along with my officials, continues to monitor the relevant data closely. In addition, the biannual Department of Finance SME credit demand survey ensures that my Department remains abreast of the SME credit environment for all sectors.
The Government remains committed to the SME sector and sees it as the key engine of ongoing economic growth. Consequently the Department of Finance, working with the other relevant Departments and Agencies, will continue to monitor the availability of both bank and non-bank credit with a view to taking appropriate actions as warranted to ensure that SMEs in Ireland have the opportunity to reach their full potential in terms of growth and employment generation. In this context, the Action Plan for Jobs 2015 includes a dedicated chapter and associated integrated set of actions to support the financing for growth in the SME sector.
