Paul Gavan (Sinn Fein) | Oireachtas source

The Minister of State is very welcome. I think he will be here again later tonight, so I hope he had his Weetabix this morning.

I welcome the Bill on behalf of my party. The Bill will make amendments to the Credit Guarantee Act 2012 with the aim of supporting the needs of businesses during this time of rising inflation and costs caused by Russian's invasion of Ukraine. The development of this scheme is very much needed at this time as we see that the cost of doing business has already pushed many small businesses to the brink. It will not be a shock to anyone if we see very many more small businesses close their doors in January.

We have heard the stories of the massive gas and electricity bills that small and medium-sized businesses are facing. They are just trying to keep their head above water. Also, there is the rising cost of supplies, deliveries and wages. Access to credit and loans will be vital to keep some of those businesses going. SMEs are the backbone of our community and local economies and the Government must continue to look at more measures to support them at this difficult time.

We are now in the winter months. It is cold and dark and, like households, businesses are worried. In Limerick, a number of businesses have closed or announced they will close soon. Next month, we will lose Miss Marples Tea Rooms in Limerick city after 11 years. La Fromagerie Cheese Shop closed last week. Bakehouse 22, which closed last month after 72 years in business, was a particular favourite of mine and of my colleague, Deputy Maurice Quinlivan. The situation is sad. I wish all of the owners of those businesses well. I know every one of them had a very heavy heart having to make the decision to close their doors.

Sinn Féin is acutely aware of the challenges that SMEs face right now, particularly the impact of rising energy costs. My party colleagues have met officials from the Department of Enterprise, Trade and Employment on these matters. We have proposed solutions such as the business energy support scheme and called for the creation of a new SBCI-led and State-backed credit guarantee loan scheme in our alternative budget to help energy intensive sectors, especially SMEs, micro-businesses and family businesses that are facing the brunt of these increased costs.

Last April, Deputy Pearse Doherty brought amendments to financial motions to reduce the cost of home heating oil, petrol and diesel in response to the cost-of-living crisis. We have also been consistent in our efforts to see insurance premiums reduced for businesses. There is a cost-of-doing business crisis, not just a cost-of-energy crisis. The Government must stay alert and ready to respond to all aspects of these crises.

The Credit Guarantee (Amendment) Bill is welcome. It is focused on providing low-cost working capital to SMEs, primary producers and small mid-caps of up to €1 million on a six-year term with no collateral requirements for loans of up to €250,000. That is welcome.

The 80:20 guarantee rate split between the State and the lending financial institution is fine. However, I know my colleague, Deputy Louise O'Reilly, had concerns and asked that the matter be kept under review. I suggest that if there is an unwillingness on the part of financial institutions to lend moneys as a result of the guarantee rate split, the Minister of State might be in a position to revisit this aspect.

Sinn Féin tabled an amendment in the Dáil to look at making the moneys loaned under the Ukraine credit guarantee scheme interest free, with zero repayments for the first 12 months of the loan, and to cap the interest rate at 2.5%. The Covid-19 scheme was capped at 2.5% and we believe this is a better way to go. We also believe there would be better uptake of the scheme if the first year was interest free with zero repayments. I ask the Minister of State to look at this aspect again on Committee Stage in the Seanad. I also ask him to examine what caused the low level of uptake of the Covid-19 credit guarantee scheme to see if the causes can be addressed to ensure the same barriers do not exist under this scheme.

More than €750 million was borrowed for the Covid-19 credit guarantee scheme. Unfortunately, that amount only represents 35% of a €2 billion scheme. It turns out that 9,848 micro-SMEs and mid-caps received loans under the scheme.However, according to Central Statistics Office, CSO, figures, there are 248,344 SMEs in the State. The take-up number is concerning.

It is important to mention that pre-legislative scrutiny of the Bill was waived. Although it is not best practice to do so and I would oppose it in most cases, as a member of the enterprise, trade and employment committee, I agreed to it in this instance, along with my colleagues, because we appreciate, given the existing crisis, that it was necessary to have available supports introduced as quickly as possible. In light of that, I hope the legislation will move swiftly through the House and that the Minister of State gets these financial supports in place without delay. There are many small business owners who may not avail of the scheme because they do not want to get into too much debt. There must be more urgency in getting the temporary business energy support scheme working to help those businesses. We welcome and support the Bill but I hope the Minister of State will keep an eye on the performance reports from the SBCI and will review particular aspects of the legislation if and when it is needed. Most importantly, the scheme must be up and running as soon as possible.