The European Commission has approved the extension of Ireland's Business Expansion and Seed Capital schemes, which will benefit Irish businesses seeking funds to grow and develop.
The Minister for Finance, Mr Cowen, and the Minister for Enterprise, Trade and Employment, Mr Martin, both welcomed the approval saying there was a strong business case for the schemes.
"These schemes are a vital source of seed capital, which is the life blood of start-up companies. They foster the development and growth of many small and medium enterprises leading to the creation of quality employment opportunities," Mr Martin said.
The previous finance minister, Mr McCreevy, announced in last December's Budget that he intended to extend the schemes until the end of 2006.
The subsequent Finance Bill made the extension subject to a commencement order from the Minister, pending approval from Brussels. This has now been forthcoming, subject to some amendments.
The Government will now introduce the required amendments to legislation governing the schemes which will take affect from February 5th, 2004. These amendments will define the type of companies that can benefit from these schemes and specify that they must meet the EU definition for small and medium-sized companies, which is that it must have fewer than 250 employees or annual turnover of under €40 million.
A revised definition from next year raises the turnover threshold to €50 million
Companies will be permitted to raise up to €750,000 in any six-month period and €1 million will remain as the lifetime limit that a company can raise.
Ship-building and European coal and steel community sectors will be excluded.
Firms in difficulty and that have sought State aid for rescuing and restructuring will not qualify.
The approval of these schemes was broadly welcomed. Enterprise Ireland chief executive Mr Frank Ryan said it was a very important development for its clients and would enable start-up companies to source the funding they needed to develop their businesses more quickly and bring their products near to market faster than would otherwise have been possible.
"I particularly welcome the new BES scheme, which will provide the catalyst to engage the private sector in enterprise development," Mr Ryan said.
