Michael McGrath (Cork South Central, Fianna Fail)
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Question 104: To ask the Minister for Finance if he will provide details of any possible sources of loan finance from European sources including the European Investment Bank in respect of small and medium enterprises here wishing to undertake business expansion projects; and if he will make a statement on the matter. [17303/11]

Michael Noonan (Limerick City, Fine Gael)
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In relation to the general question of access to finance for small and medium enterprises (SMEs), I am very conscious of the difficulties that are being faced by Irish businesses in this regard. Support for the investments of SMEs is an operational priority for the European Investment Bank (EIB). To that end, the EIB signed loan agreements in 2009 with AIB and Bank of Ireland for €100 million each and with Ulster Bank for €60 million for onlending to SMEs for investment purposes. I understand that AIB have fully allocated their funding and were approved for a further tranche of up to €150 million in November 2010.

The European Investment Fund (EIF) provides venture capital for small businesses via venture capital funds and business incubators that support SMEs, as well as guarantees to financial institutions such as banks to cover their SME loans and guarantees.

In relation to Structural Funds, under EU Cohesion Policy 2007-13, the European Commission has a number of joint initiatives with the EIB and EIF aimed at improving access to finance using financial engineering instruments. One of these instruments, JEREMIE (Joint European Resources for Micro to Medium Enterprises), promotes SME access to finance in that national and regional authorities can opt to deploy money made available by the ERDF in the form of market-driven financial instruments, instead of offering grants.

When Ireland's ERDF Structural Programmes 2007-13 were being developed, the JEREMIE programme was examined in the context of the existing arrangements in place to assist SMEs in accessing appropriate financial support. Given the nature and structure of the JEREMIE programme, particularly in terms of the scale of operations that would be required to secure European Investment Fund participation, it was not considered suited to our Structural Funds programmes. This will be looked at again in the context of the next round of structural funding.

The only source of loan finance co-funded by the EU in the Regional Operational Programmes is in the Microenterprises sub-priority. In this measure, County Enterprise Boards provide grant assistance to microenterprises. Some of this assistance can be in the form of a repayable loan which generates a revolving fund at the level of each County Enterprise Board. This is targeted at microenterprises, i.e., businesses with up to 10 employees and/or a turnover of less than €500,000. No other loan funds are provided in the Regional Operational Programmes.

A SME Guarantee Facility is available under the Competitiveness and Innovation Framework Programme (CIP) 2007-2013 which provides additional guarantees to guarantee schemes, in order to increase the supply of debt finance to SMEs. It concentrates on addressing market failures in areas such as access to loans (or loan substitutes such as leasing) by SMEs with growth potential, provision of microcredit, and securitisation.

The European Commission provides information on funding for SMEs on the European Small Business Portal which can be accessed at the following web address: http://ec.europa.eu/small-business/funding-partners-public/finance/index_en.htm. In addition, the website of the Enterprise Europe Network provide information on both national and EU financial supports http://www.enterprise-europe-network.ec.europa.eu/index_en.htm