Tuesday, 16 June 2020
Department of Jobs, Enterprise and Innovation
Covid-19 Pandemic Supports
My Department has introduced a wide range of supports for businesses as the current crisis has evolved. It is important to note that many businesses are not yet open or may be availing of forbearance measures from their banks. I am satisfied that micro and SME businesses across the economy are increasingly availing of the supports available as our economy and society reopen and I continue to keep all schemes under review. I publish the data on the take-up of schemes on a weekly basis and the data is available at the following link to my Department's website:
Details of the main schemes are set out as follows.
The Covid-19 Loan, available from Microfinance Ireland (MFI), was introduced as a support to microenterprises to help them access funding arising from the Covid-19 crisis. MFI has seen unprecedented levels of interest in this loan facility with loan approvals of €13,698,405 in the 12 weeks since the scheme commenced. This is over double the total value of loans approved in 2019 which was €6 million. The Covid-19 Loan has supported over 500 Irish micro businesses and thousands of jobs throughout every region of Ireland.
MFI provides vital support to microenterprises by lending to business that cannot obtain loans from other commercial lenders. It lends to business that do not meet the conventional risk criteria applied by commercial lenders and applies interest rate charges for its lending which are not reflective of its credit risk. This funding has provided a life-line to microenterprises struggling to cope with the economic circumstances arising from the Covid-19 crisis and will be of great assistance as these businesses re-enter the market place.
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 interest rates of between 4.5% and 5.5% with terms that include a six months interest free and repayment free moratorium.
The SBCI Covid-19 Working Capital Scheme [Covid-19 WCS] is offered by my Department in cooperation with the Department of Agriculture, Food and the Marine, and is supported by the European Investment Fund through its InnovFin SME Guarantee facility. The scheme is operated by the SBCI and offered through participating finance providers.
The scheme is open to eligible SMEs and small mid-caps (businesses of up to 499 employees) that have been negatively impacted by issues arising from the outbreak of Covid-19. Loans under the scheme range from €25,000 to €1.5m and are for periods of up to three years. Loans are offered at favourable terms, for example, the maximum interest rate under the scheme is 4% and loans of up to €500,000 are available unsecured. Uptake of the scheme to date has been positive and engagement with the participating finance providers indicates that more businesses are engaging with the application process as they seek approval for lending under the scheme.
Work is also underway on a significant expansion to the scheme to ensure that there is adequate financing available to businesses, as they seek to make the necessary adjustments to their operations to facilitate a return to trading as we progress through the phased reopening of the economy.
The Business Continuity Voucher scheme was launched on 26 March. This Voucher provided up to €2,500 in consultancy costs, to develop short and long-term strategies to respond to the initial pandemic and to plan for the eventual recovery and reopening of the economy. The scheme was a resounding success in terms of uptake, the product of it being an appropriate support for that point in time. The Local Enterprise Offices (LEOs) will continue to work with existing applicants and recipients of vouchers and their subsequent business continuity plans. The awarding of vouchers will naturally taper off in the coming weeks as the LEOs process the outstanding applications.
The Trading Online Voucher Scheme is funded by the Department of Communications Climate Action and Environment and delivered nationwide in partnership with my Department, Enterprise Ireland and the 31 LEOs. The Scheme offers skills training, mentoring and financial support of up to €2,500 to help small and micro-businesses to develop their e-commerce capability. New flexibilities to the Scheme were introduced in April including reducing the requirement for co-funding from 50% to 10% and allowing businesses to apply for a second voucher of up to €2,500 where they have successfully utilised their first one.
On the 8th of June the Government announced additional funding of €14.2m for the Scheme bringing the total funding allocation in 2020 to €19.8m. This additional funding will allow LEOs to approve additional vouchers to successful applicants. There has been a positive response to these changes and significant uptake of the Scheme.
Enterprise Ireland, on behalf of my Department has also launched a new suite of Covid-19 supports; these are:
Sustaining Enterprise Fund: This €180 million fund will provide support to eligible manufacturing and internationally traded services companies employing 10 or more employees who have been impacted by a 15% or more reduction in actual or projected turnover or profit, and/or have a significant increase in costs as a result of the Covid-19 outbreak. The fund provides financial assistance in the form of repayable advances of up to a maximum of €800,000 per company. This fund also provides a €25,000 to €50,000 short-term working capital injection to eligible smaller companies to support business continuity and strengthen their ability to return to growth and be trading strongly in three years time.
Covid-19 – HPSU Fund (SEF– HPSU):This fund is aimed at EI High Potential Start-Up companies which, due to the Covid-19 pandemic are facing delays to projected sales growth and whose fundraising plans are significantly impacted or stalled. Under this fund, HPSUs can apply for co-investment of €50,000 per undertaking in the form of equity or convertible debt instruments.
In addition to this fund Enterprise Ireland has launched the following supports:
Covid-19 Business Financial Planning Grant:A €5,000 grant for eligible companies to work with third party consultants to prepare a detailed financial plan with forecasts and assumptions. 337 applications have been received for Covid-19 Business Financial Planning Grant.
Lean Business Continuity Voucher: A €2,500 voucher for eligible companies to access training or advisory services support related to the continued operation of their business during the current pandemic. 156 applications have been received for the LEAN Business Continuity Voucher.
Covid-19 Online Retail Schemeis a grant for retail companies with greater than 10 employees to develop a more competitive online offer. This competitive call has a budget of €2 million. Successful applicants will receive funding support of up to 80% of project costs, with a maximum grant of €40,000.
Most recently, the Government launched the Restart Grant which provides direct grant aid to micro and small businesses. The grant of between €2,000 and €10,000 provides a contribution towards the cost of re-opening or keeping a business operational and re-connecting with employees and customers. It is administered through the local authorities.
I will continue to keep the take up of supports under review and we will adjust and develop new measures as the economy continues to reopen.