Louise O'Reilly (Dublin Fingal, Sinn Fein)
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74. To ask the Minister for Jobs, Enterprise and Innovation the reason debt was prioritised through loans over grants to the level of a four to one debt to grant ratio in the July stimulus package instead of prioritising grants for at the recent European Union summit on a post-pandemic recovery package; and his views on whether this is contradictory. [19803/20]

Leo Varadkar (Dublin West, Fine Gael)
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The July Jobs Stimulus package has been developed to fund specific measures that can achieve an immediate impact in 2020 for businesses that have been affected by COVID-19. This package is a key part of the second phase, the recovery phase, of the Government’s response to the pandemic and in total the range of measures announced related to a total stimulus of €7.4 bn, including tax, expenditure and credit supports.

The assistance already rolled out and the additional measures announced in the July Jobs Stimulus package have significant fiscal implications. In this regard, Government has targeted a headline deficit of €30 billion for 2020 which would be in line with the average of fiscal positions across the EU in tackling the COVID-19 crisis.

The suite of supports that my Department has developed in response to the COVID-19 crisis aims to achieve the widest reach with Exchequer money to support viable business across all sectors and across the variety of needs.

Within the July Jobs Stimulus package, I have prioritised grants to businesses by providing €300 million to the Restart Grant scheme from the €450 million of expenditure allocated to my Department. I have also increased the maximum funding allowed to individual businesses under the scheme to €25,000.

The July package also includes €2 bn in credit supports to be made available to eligible businesses through a scheme which is underpinned by an 80% State guarantee. An important attribute of loan schemes is the multiplier effect of Exchequer funding: up to €2bn in credit will be available now to support eligible businesses, while the cost to the State will be limited to 80% of the value of loan defaults. Furthermore, Exchequer costs for the scheme will be spread over a six-year window and will thus be incurred at a time when it is envisioned that State finances will be in a stronger position.

It should be noted that not all businesses need the same level or type of support, and that is why the package is comprised of a range of measures including grants and loans.

It is not the case that debt is being prioritised over grants in the July Jobs Stimulus package. As I have outlined above, two thirds of direct expenditure from my Department was assigned to direct grant support to businesses through the Restart Grant scheme, and this in addition to the expenditure underpinning support for business through the new Wage Employment Support Scheme which will provide for an estimated stimulus of €1.9 bn.

It is important to emphasise that the value of supports made available across the different measures may differ significantly from the amount of Exchequer expenditure required to provide these supports. For example, the Government is able to leverage Exchequer funding into a significantly larger package for business, including the €2 billion COVID-19 Credit Guarantee Scheme which relates to a substantial portion of the overall stimulus package announced but for which the associated cost to the Exchequer will be significantly lower than the lending made available through the scheme.

With regard to the EU post-pandemic recovery package, this is an EU wide budgetary package made up of grants and loans to Member States. The consideration of grants and loans in the context of member states is not directly comparable to the discussion of the provision of grants and loans to businesses as set out in the July Jobs Stimulus package, which is a domestic jobs stimulus programme. As such, I see no contradiction as to the Government’s position on this topic at the European Union summit.

Brendan Griffin (Kerry, Fine Gael)
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75. To ask the Minister for Jobs, Enterprise and Innovation his views on a matter (details supplied) regarding loans for small businesses; and if he will make a statement on the matter. [22054/20]

Leo Varadkar (Dublin West, Fine Gael)
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There are a number of State-supported loan schemes in place to support small businesses.

If the business has been impacted by COVID-19, the Strategic Banking Corporation of Ireland (SBCI) COVID-19 Working Capital Scheme makes lending available to eligible businesses to enable those businesses to innovate, change or adapt in response to the current business environment. This could include innovations like the ones described in the supplied details. The Scheme is operated by the SBCI through participating finance providers, and loan amounts between€25,000 to €1.5m are available per eligible enterprise for loan terms ranging from one year to three years, with loans of up to €500,000 being available without collateral.

Alternatively, the COVID-19 Credit Guarantee Scheme facilitates up to €2 billion in lending to eligible businesses. Loans under the Scheme range from €10,000 to €1 million, for terms of up to five-and-a-half years. Financing will be offered through a range of products, including term loans, working capital loans and overdrafts. Loans of up to €250,000 under the Scheme are available unsecured (except where this is a requirement of the product feature, as in the case of asset finance, invoice discount facilities, etc.). The Scheme is operated by the SBCI through participating finance providers.

If the business is a micro-enterprise, they may be eligible for a loan from Microfinance Ireland and if the business has been COVID-19 impacted they may be eligible for a COVID-19 Business Loan of up to €25,000. These loans are available through Microfinance Ireland with zero repayments and zero interest for the first six months and the equivalent of an additional 6 months interest-free subject to certain terms and conditions. Loan terms are typically up to 3 years and there are no fees or charges.

The Future Growth Loan Scheme may also be appropriate and offers lending over a longer term than other loan schemes. This is another scheme from my Department and the Department of Agriculture, Food and the Marine, and is also operated by the SBCI. This scheme provides for loan terms of 7-10 years and is aimed at supporting businesses to invest strategically for their long-term sustainability and growth. Finance provided under the scheme is competitively priced and offered at favourable terms. For example, loans of up to €500,000 are available unsecured. Loans under the scheme range from €25,000 to €3 million.

For further details of the schemes listed above, please visit my Department’s website, the SBCI’s website and the MFI website.