Sinn Féin spokesperson for Enterprise, Trade and Employment Louise O’Reilly has welcomed the news that the government will remove the 50% portfolio cap for Covid-19 credit guarantee scheme for SMEs, saying it is a clear sign that the government has taken on board Sinn Féin policy as outlined in our 13th May letter to the Minister for Finance and the then Minister for Business.
Teachta O’Reilly said:
“The removal of the 50% portfolio cap for Covid-19 credit guarantee scheme is a welcome move by the government. The removal of the cap negates a problem of the scheme whereby banks were refusing to lend to small businesses in dire need of affordable credit.
“This aspect of the credit guarantee scheme was a problem Sinn Féin identified many months ago and we outlined this in a letter on 13th May to the Minister for Finance and the Minister for Business.
“We stated that the design of the scheme was not fit for purpose and had resulted in negligible take-up from businesses and negligible loans issued from banks.
“The portfolio cap meant that banks saw it as unattractive to loan monies through the scheme to SMEs, and that it also resulted in extremely high interest rates where it did loan monies.
“The removal of this cap should make it easier and more attractive for banks to lend to SMEs.
“However, in addition to the removal of the caps, the government should really be looking at 90% – 100% State-guaranteed loans, no repayments paid by businesses over the first 12 months and the State covering the cost of interest over that period, and severely reduced interest rates thereafter.
“Such measures would make the credit guarantee scheme much more attractive to business during this unprecedented and extremely difficult period.
“The removal of the portfolio cap by the government shows they are willing to listen to Sinn Féin’s economic proposals. Therefore, I would ask them to go further and consider the full suite of measures laid down in our letter to the Minister for Finance on 13th May.”