Gerald Nash (Louth, Labour)
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426. To ask the Minister for Jobs, Enterprise and Innovation her plans to amend the current Covid-19 business supports to ensure direct, targeted and low-cost finance to micro and small businesses; if she has considered a tapered scheme of support for businesses relating to company size; and if she will make a statement on the matter. [7490/20]

Heather Humphreys (Cavan-Monaghan, Fine Gael)
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Since the Covid-19 crisis began, Government has worked to put in place a suite of supports to ensure appropriate financing is available to businesses that have been impacted by the outbreak or by the restrictions that have been put in place to mitigate the spread of the disease. There are currently a number of loan guarantee schemes in place which support the working capital needs of micro and small businesses.

I can assure the Deputy that I continue to work with my colleagues across Government to examine further appropriate supports to assist businesses impacted by Covid-19, including through any mechanisms allowable through the EU’s state aid framework.

Microfinance Ireland (MFI) was introduced as a support to microenterprises to help them address funding needs and provides loans to microenterprises that do not meet the conventional risk criteria of banks. These loans are available to eligible microenterprises responding to Covid-19-related difficulties, the negative impact of which must be a minimum of 15% of actual or projected income or profit.

MFI provides vital support to microenterprises by filling the lending gap in the market by lending to businesses that cannot obtain loans from other commercial lenders. Where typical MFI loans are available at an interest rate of 6.8-7.8%, Covid-19 loans are available at an interest rate of 4.5% where the application is made through the network of Local Enterprise Offices around the country, or where referred by a bank or Local Development Committee. Where an application is made directly to MFI, the interest rate is 5.5%. These loans also include an option for a moratorium on interest and repayments for the first six months.

The SBCI Covid-19 Working Capital Scheme opened for eligibility applications on 23 March. The scheme is offered by my Department in cooperation with the Department of Agriculture, Food and the Marine. The scheme is operated by the Strategic Banking Corporation of Ireland (SBCI). It currently makes available a fund of up to €200m to eligible businesses that are exposed to impacts arising from the outbreak of Covid-19, to enable those businesses to innovate, change or adapt in response to the current business environment.

Loans under this scheme are easier to access and offered at favourable terms when compared with other similar loans in the market, for example the maximum interest rate under the scheme is 4% and loans of up to €500,000 are available unsecured. Applicants may also be able to avail of a three-month interest-only payment period (depending on your lender’s assessment of your application).

Following my announcement on 8 April, this scheme is now being expanded to make available an additional €250m in lending, which will bring the total amount of lending available under this scheme to €450m.

The Future Growth Loan Scheme makes available up to €300 million of long-term loans and is operated by the Strategic Banking Corporation of Ireland (SBCI) through participating lenders. This scheme makes funding available for terms of 8-10 years, which is longer than is typically available in the Irish SME lending market due to the risks associated with longer-term loans. As with the Covid-19 Working Capital Scheme, loans of up to €500,000 are available unsecured. Uptake for the scheme has been strong and the initial funding has been almost fully subscribed.

On 8 April I announced that this scheme would be expanded by a further €200m to facilitate longer-term lending to Covid-19-impacted businesses and my Department is working through the details of this expansion and will bring this funding to market as soon as possible.

On 2 May, I announced a new €2 billion COVID-19 Credit Guarantee Scheme as a further development of the existing Credit Guarantee Scheme 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 as they seek access to credit facilities to assist a return to a more regular trading environment.

Implementation of this scheme will require primary legislation, the drafting of which has been approved by Government, and my officials are already working urgently with the Office of the Parliamentary counsel on this drafting work.

I have also recently announced a new €250m Restart Fund, which will be a critically important tool in supporting small businesses as they begin to reopen.

Seán Fleming (Laois-Offaly, Fianna Fail)
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427. To ask the Minister for Jobs, Enterprise and Innovation the detailed proposals in terms of funding, cash flow and capital resources available for the hotel sector in regard to which business for 2020 has been decimated due to the Covid-19 crisis; the supports in place for companies whose turnover will be dramatically reduced but will have ongoing commitments in terms of bank repayments and overheads; and if she will make a statement on the matter. [7514/20]

Heather Humphreys (Cavan-Monaghan, Fine Gael)
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Since the onset of the Covid-19 crisis, Government has worked to ensure that appropriate supports are in place for businesses in sectors that have been exposed to negative impacts arising as a result of the outbreak and the measures put in place to mitigate the spread of Covid-19 in Ireland. I understand that some businesses, such as those operating in the hospitality sector, have been particularly affected by this crisis.

The SBCI Covid-19 Working Capital Scheme opened for eligibility applications on 23 March. The scheme is offered by my Department in cooperation with the Department of Agriculture, Food and the Marine. The scheme is operated by the SBCI. It currently makes available a fund of up to €200m to eligible businesses that have been negatively affected by impacts arising from the outbreak of Covid-19 to enable those businesses to innovate, change or adapt in response to the current business environment.

Following my announcement on 8 April, this scheme is now being expanded to make available an additional €250m in lending, which will bring the total amount of lending available under this scheme to €450m.

The Future Growth Loan Scheme makes up to €300 million of loans available with a term of 8-10 years and is operated by the Strategic Banking Corporation of Ireland (SBCI) though participating lenders. On 8, I announced that this scheme would be expanded by a further €200m to facilitate longer-term lending to Covid-19-impacted businesses and my Department is working through the details of this expansion and will bring this funding to market as soon as possible.

For micro-enterprises in the hospitality sector, the Covid-19 Loan, available from Microfinance Ireland (MFI), has been introduced as a support to microenterprises to help them access funding arising from the Covid-19 crisis. Microenterprises are enterprises with less than ten employees.

These loans are available for eligible microenterprises responding to Covid-19-related difficulties, the negative impact of which must be a minimum of 15% of actual or projected income or profit. Loans up to €50,000 are available with terms that include a six-month interest-free and repayment-free moratorium, with the loan to then be repaid over the remaining 30 months of the 36-month loan period. These loans are available at an interest rate of 4.5% to all micro-enterprises where the application is made through the network of Local Enterprise Offices around the country, or where referred by a bank or Local Development Committees. An interest rate of 5.5% is applied to loans sought directly through MFI.

In terms of new supports, on 2 May, I announced a €2billion Credit Guarantee Scheme to support lending to SMEs for terms ranging from three months to six years. Loans under the scheme will be offered at below market interest rates.

I also recently announced a new €250m Restart Fund, which will be a critically important tool in supporting small businesses as they begin to reopen.

This has been a period of unforeseeable disruption to businesses around the country, and I am conscious that there have been significant impacts on otherwise viable businesses. I would encourage businesses that have been negatively impacted as a result Covid-19 to take advantage of these supports wherever appropriate.