Paschal Donohoe 'cautious' of 100% State-backed loans for SMEs

Paschal Donohoe, Finance Minister.

Finance Minister Paschal Donohoe has signalled caution over the inclusion of 100% State-backed loans in the SME credit guarantee scheme element of the Government’s pending multi-billion stimulus package for the economy.

As part of a reboot of an existing SME scheme, the Government will guarantee up to €2bn of loans from Bank of Ireland, AIB and Ulster Bank. The current proposal is for the State to guarantee the banks against 80% of any losses from each loan, while the banks will guarantee the remaining 20%.