BATT O’KEEFFE HAS SAID the government has already begun detailed work on a state scheme that would see the government guarantee loans for small businesses.

O’Keeffe, the Minister for Enterprise, Trade and Innovation, sold the Small Firms Association (SFA)’s annual conference that the government was responding to its call to “step up to the plate” and intervene to help small businesses get credit.

“I am pleased to tell you that officials in my Department, and in the Department of Finance, are looking at options for a loan guarantee scheme. Detailed discussions on how this can be achieved are underway, and I hope they can be finalised very shortly,” he said.

The scheme is likely to be geared at helping small businesses which currently fail to get credit because of a shortage in collateral, despite having displayed an ability to pay.

O’Keeffe noted that similar schemes already operated in almost 100 countries – including most of the EU member states – and that it was time for Ireland to offer such guarantees.

“Getting credit flowing to small businesses is vital to our economic recovery,” he said.

The minister also declared that Ireland was regaining competitiveness, with lower business costs easing pressures on the business sector and ‘realignment’ of wages in both the private and public sectors.

The measure has been welcomed by Chambers Ireland, which said it looked forward to the scheme’s introduction, though critics may argue that such a scheme is long overdue with many small firms already having buckled during the recession.