Brendan Smith (Cavan-Monaghan, Fianna Fail)
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84. To ask the Minister for Jobs, Enterprise and Innovation the measures he will implement to ensure that small businesses have access to loan schemes that were established due to Covid-19; and if he will make a statement on the matter. [15845/20]

Leo Varadkar (Dublin West, Fine Gael)
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My Department has responded swiftly to the needs of businesses since the onset of Covid-19 earlier this year.

The COVID-19 Working Capital Scheme offered through the SBCI is broadly accessible to Covid-19-impacted SMEs and small-mid caps (businesses of fewer than 500 employees). Of the approximately 3,000 eligibility applications to date, only 15 have so far been deemed ineligible. This scheme is subject to the participating banks’ own credit policies and procedures.

Both myself and my predecessor, Heather Humphreys, have had regular meetings with representatives of the banks to ensure that issues raised by businesses as they apply for lending under these schemes are addressed. At these meetings, the banks have given assurance that they are working through large pipelines of applications for the Government Schemes, and I urged them to prioritise these essential supports for businesses.

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. 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 months interest free and repayment free moratorium, with the loan to then be repaid over the remaining 30 months of the 36-month loan period. Interest rates of between 4.5% and 5.5% are available.

Loans of €17.1 million have been approved since the commencement of the Scheme, compared to a total loan value approved in 2019 of €6 million, and a pipeline of applications is being worked through. Due to this unprecedented demand, lending to new applications through this scheme has currently been paused as legislation is required to increase the funding of MFI which is currently at capacity. This legislation recently passed through the Oireachtas. Microfinance Ireland and officials from my Department will work together to reopen this Loan Fund as quickly as possible.

I very much welcome the announcement by the European Commission on 29th June 2020 of its adoption of the 3rd amendment to the Temporary Framework. This amendment allows for support to be granted under the Temporary Framework to micro and small enterprises (up to 50 employees with less than EUR 10M annual turnover and/or annual balance sheet), even if they fall under the category of an undertaking in difficulty on 31 December 2019 provided that they are not subject to collective insolvency procedure under national law and have not received rescue or restructuring aid which has not yet been repaid). Such aid is also intended to increase support possibilities to innovative start-ups in the high growth phase which are micro or small in size.

This amendment will apply retrospectively to schemes already developed under the Temporary Framework, including the EI Sustaining Enterprise Fund.