Wednesday, 19 May 2021
Department of Enterprise, Trade and Employment
Enterprise Support Schemes
54. To ask the Minister for Enterprise, Trade and Employment his views on ensuring that funding schemes are in place, such as the long-term SBCI future growth loan scheme, for businesses in line with the reopening of society as per the announcement of 29 April 2021; and if he will make a statement on the matter. [26677/21]
Since the onset of the pandemic, my Department has worked to ensure that measures are in place to help businesses seeking appropriate financing in response to the impacts of COVID-19. These schemes make financing more accessible to eligible businesses at lower interest rates than would otherwise be available.
The Future Growth Loan Scheme was introduced in 2019 to make lending available to businesses seeking funding for long-term, strategic investment. The scheme was expanded in 2020 in response to the impacts of COVID-19 and since then has continued to see strong demand. Close Brothers continues to accept new applications under the scheme, while other participating lenders are continuing to process their “pipeline” of existing applications.
Other state-backed loan guarantee schemes are also in place and provide financing options for both working capital and investment purposes. These schemes feature optional moratoria, which may offer businesses flexibility as they reopen.
The COVID-19 Credit Guarantee Scheme is the largest such scheme in the history of the State and makes available up to €2 billion in lending to eligible businesses impacted by the pandemic. Loans under this scheme are for terms of up to five-and-a-half years and range from €10,000 to €1m. 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). As a result of the high level of the State guarantee, loans are being provided at interest rates lower than the current market rate for similar loans.
Applicants may also avail of an optional interest and/or capital moratorium, depending on the finance provider’s assessment of an application.
For micro-enterprises, the COVID-19 Business Loan from MicroFinance Ireland is open to eligible businesses that have been negatively affected by the pandemic. Loans under this scheme range from €5,000 to €25,000 and are typically for terms of up to three years.
This scheme features a six-month interest and repayment moratorium, with the loan to be repaid over the remaining 30 months of the 36-month loan period. There is also a Government rebate for the interest paid on the loan in months 7-12 of the loan.
Work is also under way on the delivery of a Brexit Impact Loan Scheme, subject to the necessary legislation being in place, which will make up to €330m in lending available to eligible Brexit-impacted businesses, including primary producers. Loans under this scheme will be for terms of up to six years, and will range from €25,000 to €1.5m, with loans of up to €500,000 available unsecured.
As businesses look toward reopening, I am conscious that many will have new and unforeseen liquidity needs after a difficult year. I would encourage eligible businesses to consider the loan guarantee schemes outlined above as they consider both the immediate liquidity required to reopen and investment for the future.