Well forgive me for laughing but the news that the Irish government’s latest business loan scheme for SME’s stands at a miserly €2 million per year is insulting. It’s designed to help small business’s bridge the funding gap with the aim of preserving jobs.
Although touted by the Department of Jobs, Enterprise and Innovation as a €10 million Microenterprise Loan Scheme it is spread out over 5 years.
This commitment of fresh funds is for firms who employ less than 10 people and whose turnover is under €2 million per year.
It’s all part of a larger package originally announced in June of €90 million to support those smaller companies who often have difficulty securing credit from Banks.
But the €90 million has a twist! It’s contingent on €40 million in bank funding following the initial €10 million committed by the department for the first five years the fund is active. During this time if it’s successful a further €10 million will be committed with observers saying that another €30 million in leverage would then follow.
So let’s do the math. Ten and ten is twenty, pus a possible 30 is 50. Then add in the bank funding and hey presto you have your €90 million.
But the only real money on the table right now is €10 million and that is over five years.
Statistics from the Central Bank for July and August show that the contraction rate of lending to these businesses fell by nearly €600 million during this period!
However, as usual the spin doctors have a great way of making €2 million sound like €90 million.
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