Written answers

Tuesday, 11 May 2021

Department of Enterprise, Trade and Employment

Covid-19 Pandemic Supports

Photo of Éamon Ó CuívÉamon Ó Cuív (Galway West, Fianna Fail)
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131. To ask the Minister for Enterprise, Trade and Employment the funding provided by the State for the Covid-19 loan guarantee scheme operated though the banks; the number of loans approved to date; the amount guaranteed by the State to date; the money drawn under the scheme; and if he will make a statement on the matter. [23764/21]

Photo of Leo VaradkarLeo Varadkar (Dublin West, Fine Gael)
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My Department has introduced a range of business supports in response to the COVID-19 pandemic including loan guarantee facilities for businesses of different sizes. This query may be in reference to either the COVID-19 Working Capital Scheme or the COVID-19 Credit Guarantee Scheme, both of which offer state guaranteed lending to businesses impacted by the pandemic.

The COVID-19 Working Capital Scheme was introduced at the initial onset of the pandemic (in March 2020) to help businesses seeking to innovate, change or adapt to mitigate the impact of the COVID-19 crisis. Loans under the scheme range from €25,000 to €1.5m, for terms of up to three years. Loans of up to €500,000 are available unsecured. This scheme was made available by adapting and expanding the Brexit Loan Scheme. In total across both these schemes, €337.5 million in lending has been made available at a cost to the Exchequer that is capped at €29.7 million.

The Strategic Banking Corporation of Ireland (SBCI) delivers the scheme on behalf of the Ministers for Enterprise, Trade and Employment and Agriculture, Food and the Marine. The SBCI provide for an 80% guarantee to lenders participating in the scheme, and this is in turn supported by a counter-guarantee from the European Investment Fund [EIF] through its InnovFin SME guarantee facility. The risk for the scheme is shared as 40% EIF: 40% SBCI: 20% lenders.

As of 30 April 2021, there has been 1,016 loans sanctioned under the COVID-19 Working Capital Scheme to a total value of €138.33m.

Figures for loans drawn are provided as part of the quarterly reporting on the scheme. As of the most recent quarterly report (31st December 2020), 794 loans had been drawn down through the COVID-19 Working Capital Scheme to a value of €93.3m.

The COVID-19 Credit Guarantee Scheme (CCGS) makes up to €2 billion in lending available for Irish businesses and is the largest guarantee scheme in the history of the State. Its function is to add certainty to businesses that funding is available for working capital and investment purposes. Loans of up to €1 million are available for up to five and a half years at reduced interest rates. Loans under €250,000 do not require collateral or personal guarantees. The Scheme is available to SMEs and small mid-caps (including primary producers), and will run until 31 December 2021 in accordance with the European Commission’s State Aid Temporary Framework implemented in response to COVID-19.

Guarantee schemes operating under the Credit Guarantee Act, which includes the COVID-19 CGS, are based on contingent liability. In such schemes there is no upfront cost to the state in the allocations to finance providers. The finance providers issue loans utilising their own funds. Allocations under the scheme were assessed in depth by the agency with the relevant market knowledge, the SBCI, in accordance with the finance providers market share and ability to manage a suitably sized loan book.

For the COVID-19 CGS there is no cost to the State unless a participating enterprise is unable to pay back the loan for more than 90 days, whereupon the loan enters a default stage and the finance provider can claim on the guarantee for 80 percent of the outstanding balance. To date, there have been no claims under the guarantee. €25.5 million has been provided in Estimates 2021 for potential calls on the guarantee by finance providers and to cover operational costs.

There were 4,551 loans approved and drawn for a value of €283.6 million up to 22 April 2021. The maximum contingent liability on these loans with an 80% guarantee is €227 million.

In order to provide the public with relevant data on the performance of the scheme, my Department publishes weekly and monthly reports on its website. These reports provide data on loans drawn under a wide variety of themes and are available at: .

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