Work of the SME Policy Unit
Access to Credit
It remains the responsibility of the banking system to provide credit to businesses. However, Government is prepared to offer some additional targeted supports where there are market failures.
Credit Guarantee Scheme
The Credit Guarantee Scheme was launched on Wednesday 18th October 2012 by the Taoiseach, Tánaiste and Minister Bruton. The Scheme has been introduced by the Government, in the context of its work in restructuring the Irish banking system, and to assist viable SMEs on the margins of commercial lending decisions in accessing credit. It provides a 75% State guarantee to banks against losses on qualifying loans to micro, small and medium enterprises with growth and job creation potential. Bank of Ireland, AIB and Ulster Bank are participating in the Scheme.
The Scheme will facilitate up to ¤150 million of additional lending to eligible SMEs per annum. The Guarantee Scheme is intended to address specific market failures that inhibit bank lending to some commercially viable micro, small and medium enterprises, by providing a 75% State guarantee to banks against losses on qualifying loans to firms with growth and job creation potential.
The precise requirement could be lower or higher than ¤150 million, depending on SME credit needs and economic conditions over the duration of the Scheme. Take- up of the Scheme will be closely monitored.
Microenterprise Loan Fund
The Microenterprise Loan Fund was launched on the 27th September 2012 and will improve access to credit for microenterprises and facilitate the growth and expansion of viable businesses from all industry sectors across the country, which have been refused access to credit from the banks.
The Fund will provide support in the form of loans for up to ¤25,000, available to start-up, newly established, or growing microenterprises employing less than 10 people, with viable business propositions, that do not meet the conventional risk criteria applied by banks. The potential viability of the business proposal will be the dominant factor in all credit decisions.
Credit Review Office
The Minister for Finance is calling for suggestions from members of the public on what more the Credit Review Office can do to ensure SMEs are getting the support on bank lending they require.
More information is available on the Department of Finance website
Business Plan Guidance
John Perry, T.D., Minister for Small Business at the Department of Jobs, Enterprise and Innovation launched the Business Plan Guidance, published by the Consultative Committee of Accountancy Bodies-Ireland (CCAB-I) and the Irish Banking Federation on Tuesday 4 September 2012.
This new Business Plan Guidance has been designed to assist SMEs and microenterprises in developing and presenting a robust business plan and cash flow forecast as a key part of an application for credit.
Primarily intended for use by accountants with their SME clients and by bank lenders with their SME customers, it is expected to also be widely used by other agencies working with SMEs and microenterprises - such as City and County Enterprise Boards and other agencies of the State, Microfinance Ireland on its establishment, as well as business representative bodies.
A copy of the Business Plan Guidance and other business-relevant material on the IBF website.
Small Business Finance Website
The Small Business Finance website is a joint initiative by the Irish Banking Federation (IBF) and Chambers Ireland. Supported by additional content from sponsors Eversheds, Mazars and Energia, the Small Business Finance website is an open resource for small businesses of all backgrounds and at various stages of development on business planning and financial management.
Small Business Advisory Group
The Small Business Advisory Group, chaired by Minister Perry was established on 16th June 2011. The objective of this group is to facilitate structured and regular dialogue between the Minister and representatives of the small business sector on issues of concern. The membership is focussed on business people with direct experience in running a business.
Primarily, the Group will provide policy advice for onward reference to Government, on the key issues affecting the SME sector and what initiatives/actions could address these.
The Group’s Report ‘The Voice of Small Business – A Plan for Action’ was published in November 2011.
Late Payment Legislation
The Unit promotes improved payment practices and monitors the operation of the Prompt Payment of Accounts Act, 1997, and the Late Payment in Commercial Transactions 2012 The Regulations implement EU Directive 2011/7/EC on combating late payment in commercial transactions.
This Directive came into force on 15 March 2011. Member States must transpose this Directive by 16 March 2013. Statutory Instrument No 580 of 2012 was signed by Minister for Jobs, Enterprise and Innovation on 22 December 2012 which transposes this Directive and comes into effect on 16 March 2013.
This legislation will act as a deterrent to late payment and a driver for payment on time by establishing a clear expectation in law that payment will be made according to agreed terms that creditors will not be penalised financially when paid late and debtors will not benefit.
Government Departments – 15 day Prompt Payment requirement:
The Unit collates and publishes the composite quarterly returns by Central Government Departments of payments made to their suppliers within 15 days. The Government commitment under the EU/IMF Programme of Support for Ireland will extend the 15 day prompt payment rule, to include the Health Service Executive, the Local Authorities, State Agencies and all other Public Sector Bodies (excluding Commercial Semi-State Bodies). The new arrangement will apply in respect of valid invoices received on, or after, the 1 July 2011.
As a follow-up to Government Decision No: S180/20/10/1428 of 24 November 2011, and in order to implement:
- the recommendation of the Advisory Group for Small Business in its Report “The Voice of Small Business” published on 3 November 2011 (above Government Decision refers) and
- two of the Key Deliverables in the Action Plan for Jobs, (Key Actions 3.44 and 7.13.2) which are required to be implemented by the end of Quarter 1, 2012 (i.e. 31 March 2012);
This Department has prepared the attached Official Notice (PDF format, 30KB)
European Union Support Programmes for SMEs - An overview of the main funding opportunities available to European SMEs
The European Commission’s latest publication on SMEs is available here:
European Charter for Small Enterprises
The Unit is responsible for implementation of the Charter and provides an Annual Report to the European Commission on measures taken in Ireland under each of the headings set out in the Charter, which was agreed by the EU Member States in Feira (2000).
The EUGO network of Points of Single Contact assists business to provide services in the EU by proving information and assistance with completing the relevant administrative procedures required. Irish based businesses can access information through the relevant Point of Single Contact on the procedures required for doing business in the EU. (e.g. an Irish business can contact the Hungarian Point of Single Contact if they wish to provide services in Hungary).
The Irish National Point of Single Contact website can also be found in the link below.
Organisation for Economic Cooperation and Development
The Unit also has responsibility for OECD initiatives in relation to enterprise and entrepreneurship policy including, in particular, the OECD ‘Working Party on SMEs and Entrepreneurship’ and ‘Local Economic and Employment Development’ (LEED) Programme.
Last modified: 15/03/2013