Ned O'Keeffe
Ceist:11 Mr. E. O'Keeffe asked the Minister for Enterprise and Employment the action, if any, he is taking to secure additional low-cost funds for small businesses. [1563/96]
Written Answers. - Finance for Small Business.
I am very conscious of the importance of low cost funds to business generally and to small business in particular. This Government has pursued a range of broad economic policies which permit a regime of low interest rates from which all businesses benefit considerably. Sound financial management of the economy will continue to be an important element in securing low interest rates and continued access to low cost funds to all businesses.
In addition to gains from generally low interest rates, small businesses have benefited greatly from the small business expansion loan scheme introduced in 1994 and which made £100 million available at a subsidised interest rate of 6.75 per cent over 10 years. I followed this initiative with the access to finance scheme which I launched at the end of August last year as part of the Operational Programme for Small Business. Under this scheme, the minimum loan size available was reduced from £40,000 to £20,000 in response to requests by the small business sector for greater flexibility and certain types of small business that were ineligible under the small business expansion loan scheme have been included. The maximum loan available is £500,000.
The access to finance scheme is a novel partnership between the banking sector, the Government and the European Union whereby each partner contributes to the cost of providing low-cost funds to small business. Low-cost funds are available to the manufacturing, food, services and tourism sectors and the scheme is administered through almost 1,000 branches of participating banks throughout the country. In recognition of the importance of the tourism industry to small business, at least 25 per cent of funds must be made available to this sector.
The access to finance scheme provides £208 million in long-term loan finance at a subsidised rate of 6.5 per cent over seven years to firms with less than 50 employees or with an annual turnover of less than £3 million. The scheme has proved extremely popular with small businesses and I am confident the scheme will make a significant contribution to employment growth.
I have asked officials of my Department to keep the existing measures under review and to assess future options, having regard to the needs of small business and the need to ensure that any measures undertaken have a successful outcome in terms of maintenance and creation of employment.