Robert Troy (Longford-Westmeath, Fianna Fail)
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395. To ask the Minister for Jobs, Enterprise and Innovation the differences between the current credit guarantee scheme and new €2 billion scheme proposed; and the differences in terms, conditions and those that may access the scheme. [7046/20]

Heather Humphreys (Cavan-Monaghan, Fine Gael)
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The Government on 2^ndMay announced a new €2 billion COVID-19 Credit Guarantee Scheme as a further development of the existing Credit Guarantee Scheme (CGS) already available from AIB, BOI and Ulster Bank.

This Scheme forms a major component of the government’s strategy to aid SMEs in these difficult times by providing critical support to ensure businesses are facilitated in having access to credit facilities to assist a return to a more regular trading environment. It will provide an 80% guarantee on lending to SMEs until the end of this year, for terms between 3 months and 6 years. The guarantee can be used for a wide range of lending products between €10,000 and €1 million that have a maximum term of 6 years or less.

The implementation of this Scheme will require primary legislation, the drafting of which has been approved by Government, and my officials are already working with the Office of the Parliamentary Counsel on this drafting work.

There are a number of liquidity supports for COVID 19 impacted businesses currently available, including the existing Credit Guarantee Scheme supporting loans up to €1 million for periods of up to 7 years. The scheme is designed to support a range of debt products appropriate to the borrowing needs of SMEs. Term loans and other products such as stocking facilities, performance bonds are covered by the Scheme. It is possible for SMEs to avail of between a three to six-month interest-only payment period subject to the lender’s assessment of the application.

The differences between the existing Credit Guarantee Scheme (CGS) and the new Covid-19 Credit Guarantee Scheme include:

- An increase in the level of guarantee available to participating finance providers from €150 million per annum to €2 billion and an increase in the portfolio cap which will provide these finance providers with greater security to offer facilities under the guarantee.

- The Covid-19 CGS will be available to primary producers which are excluded from the existing Scheme due to State Aid rules. This restriction has been removed in light of the Covid-19 situation and in accordance with the European Commission's State Aid Temporary Framework.

- The Covid-19 CGS will be available to small Mid-Caps (up to 499 employees) which are excluded from the current CGS.

- The Scheme will have interest rates below current market rates. The exact figures cannot be announced until the legislation and operational aspects have moved further along the process.

My officials are also currently engaged in discussions with a view to broadening the number of participating finance providers participating in the Scheme.

I can assure the Deputy that I continue to work with my colleagues across Government to examine supports to assist businesses impacted by Covid-19.

Robert Troy (Longford-Westmeath, Fianna Fail)
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396. To ask the Minister for Jobs, Enterprise and Innovation the reason there has not been any approved facility arising from Covid-19 submitted to SBCI from financial providers under the credit guarantee scheme. [7047/20]

Heather Humphreys (Cavan-Monaghan, Fine Gael)
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The Government on 2nd May announced a new €2 billion Covid-19 Credit Guarantee Scheme as a further development of the existing Credit Guarantee Scheme (CGS) already available from AIB, BOI and Ulster Bank.

This Scheme forms a major component of the government’s strategy to aid SMEs in these difficult times by providing critical support to ensure businesses are facilitated in having access to credit facilities to assist a return to a more regular trading environment. It will provide an 80% guarantee on lending to SMEs until the end of this year, for terms between 3 months and 6 years. The guarantee can be used for a wide range of lending products between €10,000 and €1 million that have a maximum term of 6 years or less.

The implementation of this Scheme will require primary legislation, the drafting of which has been approved by Government, and my officials are already working with the Office of the Parliamentary Counsel on this drafting work.

There are a number of liquidity supports for Covid-19 impacted businesses currently available, including the existing Credit Guarantee Scheme supporting loans up to €1 million for periods of up to 7 years. The scheme is designed to support a range of debt products appropriate to the borrowing needs of SMEs. Term loans and other products such as stocking facilities, performance bonds are covered by the Scheme. It is possible for SMEs to avail of between a three to six-month interest-only payment period subject to the lender’s assessment of the application.

An application to access the Credit Guarantee Scheme can be made through one of the participating lenders which are currently Allied Irish Banks, Bank of Ireland and Ulster Bank Ireland. The Scheme is operated by SBCI. The Department plays no role in the application or decision-making process, which, is fully delegated to the participating lenders. The Credit Guarantee Scheme facilitates guarantees up to a maximum of €150 million in any one year.

When the Covid-19 crisis began, I made changes to the existing Credit Guarantee Scheme to make it easier for businesses to access – including removing the requirement that businesses be refused a loan by the banks before they could access the scheme.

There have not been any approved facilities arising from Covid-19 submitted to SBCI from financial providers under the existing Credit Guarantee Scheme. While discussions between the financial providers and their customers are confidential in nature, it is possible that borrowers may be availing of other Government schemes which are available or are awaiting further information on the new Covid-19 Credit Guarantee Scheme.