The passing of all stages of the Credit Guarantee (Amendment) Bill 2015 officially took place yesterday. The bill has now been sent to President Higgins to be signed into law this week.
The Government claims the Credit Guarantee Scheme will help viable businesses which have been refused conventional bank credit facilities access a state-backed guarantee. When it was originally introduced the guarantee covered 75% of their loan. The borrower pays a 2% annual premium, which partially covers the cost of providing the guarantee.
Some 279 companies have availed of the Credit Guarantee Scheme since its inception and more than €45 million has been loaned to these companies right across the country. The Government estimates that these loans helped to create 1,142 new jobs and to maintain 907 existing jobs.
Some of the changes to the Credit Guarantee scheme now include broadening of the definition of lender in order to cover additional financial product providers such as lessors, invoice discounters and other non-bank financiers, as well as changing the definition of loan agreements to include non-credit products such as invoice finance and leasing, and to include overdrafts.
It also re-balances the level of risk between the State and the extended finance providers, with the State taking an 80% share, up from 75% previously.
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