Vol. 440 No. 3
38 Mr. Connor asked the Minister for Enterprise and Employment, in view of the unavailability of venture and start-up capital from the private banking sector for many new business ventures, if he will expand the role of the county enterprise boards to allow them to make available low interest long term loans for start-up and working capital to enterprises that show a viable future.
In principle, I support the extension of the remit of the county enterprise boards to enable them to offer loans for viable projects as part of a range of financial assistance measures for startups and small enterprises. My Department is considering the financial management systems which would be required to enable county enterprise boards to establish local enterprise funds in the context of the local development programme. The basis for conferring such powers on the new boards will be addressed in the model memorandum and articles of association which will serve as the basis for their incorporation as companies limited by guarantee.
In the meantime, county enterprise boards have been urged to review the structure of the financial assistance available in their areas and to consider the possibility of agreeing mechanisms with the financial institutions to act as intermediaries on their behalf in regard to loans and other financial instruments.
The primary responsibility for the provision of equity capital to Irish industry rests with the private sector but where high risks are involved the State is willing to consider the sharing of that risk. Indeed, State agencies such as Forbairt and SFADCo already provide loan guarantees to manufacturing and internationally-trading services companies as part of their support programmes. CEBs in turn will be expected to explore the prospects for maximising the resources available for particular enterprise projects from other sources of funding such as those pledged by the banks and other financial institutions in support of the Government's plan for local economic development.
In addition, the Deputy may be aware that the private sector has established a number of loan or venture capital funds to assist small businesses, as follows:
—the Smurfit job creation equity fund;
—the AIB group venture capital fund;
—the preferential loan scheme operated by the main banking institutions;
