New Northern Ireland business loan scheme pledged

Alastair Hamilton said the scheme could be operational in three months' time

The head of Invest NI has said that a new scheme to give loans to companies which cannot access equity could be operational in three months' time.

Alastair Hamilton said the fund, worth about £50m, was part of measures being taken to help small and medium-sized businesses in difficult economic times.

He said that interest rates would be slightly higher than banks because some funding may have to be written-off.

The scheme has to be approved by the Financial Services Authority.

Once that happened, Mr Hamilton said, it could be operation in three months' time.

He said that half of the funding for the new scheme would come from EU money and the rest would be matched either through government funding or by private investment from fund managers.

He added that his organisation would not be involved in the day-to-day operation of the new fund.

"We will be funding it, managing it, making sure it delivers against overall government goals and objectives but it will have to be run by someone who is FSA approved and who knows what they are doing in terms of making loans and recovering them again," he said.

Small business

Mr Hamilton also rejected suggestions that his organisation was not doing enough to help small businesses.

He said that over the last three years 86% of the volume and 60% of the cash value of Invest NI funding had gone to local small and medium-sized enterprises.

During the 2008-2011 programme for government, Invest NI was largely charged with creating jobs with salaries above the private sector average of about £18,000.

However, he said that since the end of the 2010-11 financial year, in the absence of a new programme for government, his organisation had also been focusing on a new jobs fund which is primarily targeting unemployment.

"We need to rebuild and that is why the job fund is out there creating jobs like the 330 that were created by Capita just a few weeks ago," he added.

During his interview on the Nolan Show, Mr Hamilton said that 1,000 new posts would be announced "in the next few days" as part of the jobs fund.

However, BBC Northern Ireland business correspondent Kevin Magee said that had subsequently been described to him by Invest NI officials as a "slip of the tongue".

Our correspondent said that he had been told the new fund aimed to create 4,000 jobs by 2014 and that what Mr Hamilton was referring to was 1,000 of those posts being currently the subject of discussion.

It is understood the announcement of several hundred jobs at a single company under the jobs fund scheme is expected at the end of November.