Up to €7.5 billion could be made available for small business if their owners were allowed to access their pensions early, the Dublin Chamber of Commerce has claimed in its pre-budget submission.

The organisation says about €30 billion is held in Irish pension funds related to individual or defined-contribution arrangements. The beneficiaries cannot access the funds until they are 60 years old.

Dublin Chamber wants individuals to be allowed access a portion of the funds in their defined-contribution pension before the age of 60 on a once-off basis for the specific purpose of investing in business. They believe this would “unlock” up to €7.5 billion but do not break down how they arrive at the figure. The cost to the exchequer would be €45 million, representing revenue from the levy charged on pension assets.

The funds would be used for specified activities, including:
 - Investing in a start-up company, possibly via a matched funding arrangement;
 - Investing in an existing small business with a view to scaling up and creating jobs; 
- Capital expenditure within an existing business.

Chief executive of Dublin Chamber Gina Quin said: "As well as offering a new source of credit to business and start-ups, releasing pension funds for investment would provide assurance to those struggling with unsustainable debts that they can make a new start without the need to apply for fresh credit."

The chamber has made a number of other suggestions relating to finance for small business in its submission. They include a change to the personal tax code to allow individuals to earn tax-free interest from personal loans to small business. This would boost peer-to-peer lending they argue.

"The peer-to-peer lending market in Ireland remains poorly developed. To date, only around €5 million in loans has been provided to business. The ability to lend to small business should be designed as widely as possible to encourage the greatest possible take-up.

“Therefore, there should be no limit placed on the tax allowance to loans made through third-party peer-to-peer channels.”