After being announced in Budget 2012 (in Dec 2011) and being passed in the Dail in July 2012 – the “Credit Guarantee Act 2012 ” is finally being implemented.
From Monday October 1st – the “Microfinance Scheme” will be open for loan applications from businesses and sole traders who have been refused credit by the banks. Small businesses can apply for loans of up to €25,000.
Only businesses that employ no more than 10 staff and with a balance sheet and turnover of less than €2million will be eligible for the scheme.
The Interest rate on the loans will be 9.5% fixed – with a 3 year repayment term and a monthly repayment schedule.
The scheme is being operated by Microfinance Ireland (MFI) -which is a subsidiary company of Social Finance Foundation, which was founded in 2007 by the Minister for Finance.
(Interestingly – one of the members of the board of directors at MFI is Bobby Kerr – of Irish Dragons Den fame.)
Loan applications will be made through the County Enterprise Boards. (CEBs) – and they will carry out an initial evaluation of the quality of the business proposal/loan application before sending it on to MFI.