Speaking in the Dáil today (Tuesday) during Enterprise questions, Fine Gael Enterprise Spokesman Leo Varadkar re-iterated Fine Gael’s call for the introduction of a Government-backed loan guarantee for small & medium enterprises.

“Credit is the lifeblood of the economy but small & medium enterprises are being starved of credit by the banks. There are over 200,000 small and medium firms in the country supporting nearly a million jobs.

“There is some new lending but working capital such as overdrafts are being restricted and the banks are increasingly looking for personal guarantees from owner-directors. The reason is simple: the banks are bust and need to rebuild their balance sheets. As a result, they are unwilling to lend money to small businesses which are regarded as relatively high risk in a recessionary environment.

“The solution is also simple: the Government should guarantee a small proportion of loans and credit given to small business. This was done in the United Kingdom under the terms of the Enterprise Finance Guarantee. After an initially slow start the scheme has become a success.

“Tánaiste Mary Coughlan is an expert at commissioning reports, setting up taskforces and getting the advice of agencies, but getting her to make a decision is another matter entirely.

“Fine Gael first called for a loan guarantee system for SMEs over a year ago. Since then the Departments of Finance and Enterprise have engaged in pointless wrangling and dithering over the matter. It’s time for the Tánaiste to stand up to Minister Lenihan on the matter and ensure that small & medium enterprises get the support they need.”