Microenterprise Loan Fund (Amendment) Bill 2020: Second Stage (Resumed)

Question again proposed: “That the Bill now be read a Second Time."

I take this opportunity to speak to the Microenterprise Loan Fund (Amendment) Bill, the debate on which, I understand, is due to conclude today. I am glad to support this Bill and I commend it to the House. I want to take a moment to recognise the new surroundings and the amphitheatre in which we find ourselves. I pay tribute to the Ceann Comhairle and the Oireachtas staff who are behind this great new venture on which we find ourselves embarking. If I ever imagined myself addressing such an auditorium, I thought I might have a somewhat larger audience in attendance, but such are the slings and arrows. Here we are and at least we can get on with our business, as we are doing today.

This Bill is one of the many vital items of legislation being addressed and introduced by the new Government. It highlights why we needed that Government. While it was of essence that we put a Government in place after the long hiatus of talks and the pandemic, the political fates that were aligning made it all the more imperative that we get a Government in order that this type of Bill could get into the Chamber and be passed.

I wish the new Government well. It is important to note that the Government, despite some claims to the contrary at the outset, enjoys a solid majority. I know that there were upwards of 30 Deputies in excess of a majority on the day that the Taoiseach, Deputy Micheál Martin, was appointed. I think that by any metric, whether votes, seats or percentages, the Government enjoys an overwhelming mathematical majority of the House, electorate, public support, etc. It is important that that is the case and that we all get on with the job of supporting that Government and its important work and measures to tackle matters such as this. This is one of many priority items that it was so important to introduce.

I pay tribute to the resilience of so many small businesses in our towns, villages and constituencies that have somehow survived. It is still an open question as to whether some will survive. I pay tribute to those that have got to this point in the pandemic. In many cases, they reinvented themselves successfully and ingeniously in various ways. I marvelled at the rapid response in my constituency, which was mirrored across the country. We had a unique situation at the height of the lockdown whereby individuals were cooped up in their own homes and private houses for weeks and months on end. At the same time, we had suppliers of goods and services, which were of great interest to those individuals, behind closed doors in depots, corner stores and everywhere else. It did not take a huge leap of faith or imagination to connect the two.

I was delighted that my colleague, the Minister of State, Deputy Troy, spearheaded writing to the Department of Business, Enterprise and Innovation to try to get the needed certainty that businesses could begin to trade online and to trade over the phone in remote fashion. That got going quite quickly in the end. An Post, delivery services and courier firms played a part in that online fulfilment too. It was remarkable to see the speed with which local retailers embraced it once it was clear that it was kosher to do so.

In my constituency, Ted Johnsons hardware in Naas, a popular family-run traditional business mobilised and it led to a situation where clerks, tellers and store staff were taking orders over the phone until lunchtime every morning, manning the phones in every sense, and then on the road in a van that afternoon to deliver their wares, which were highly in demand in the area. They fulfilled that need, keeping the company in business and the staff in jobs and meeting the needs relating to the supply chain. Businesses like that embraced this new remote world for the first time, tackling matters such as supply chains, logistics, filling orders and methods of payment, the nuts and bolts of remote delivery and large-scale supply chain management. In the time it took a Harvard business paper to come off the printer, the company had invented and reinvented it in its own storeroom. I pay tribute to businesses such as that to which I refer.

I talked about survival and this is a matter of survival for many businesses. I think Darwin said that it is not always the strongest or biggest that will survive, but those who are most adaptable to change. Our small retailers demonstrated and lived that value during the pandemic in the way in which they proved adaptable and changed, remodelling their own offerings. I pay tribute to them for doing that.

On a note of more caution and concern, while we embrace that, an online trading voucher has been talked about. Deputy Denis Naughten mentioned it earlier. This matter also came to my attention during the pandemic. The online trading voucher support scheme appears to have run dry. That is a matter of great concern to those concerns which have reinvented themselves and which are putting their shoulders to the wheel in order to serve their customers and keep their businesses afloat and their staff in jobs. The trading voucher scheme enables businesses to get online and provides access to support, mentoring and finance. I appeal to the Ministers and to anybody else with power in this area to examine the position. We cannot say to businesses at the height of this pandemic, when everybody is embracing remote distribution channels, that last year's allocation is used up and that they will have to wait until next year. I do not think that is good enough. I hope, expect and am confident that this matter will be tackled.

On the bricks and mortar and the people who cannot do business online, we are all very familiar with online Zoom calls, Skype chats and everything else. A lot of business and socialising is being done that way. In the normal way we would now be embarking on the summer school season. That along with conferences and other get-togethers are now transitioning to online, which is great in the sense that it continues and prevails, and those discussions take place. However, it is not such great news for the coffee shops, pubs, restaurants and hotels that supported those events. People cannot buy a cup of coffee on a Zoom call and they cannot go and have their meals with other delegates coming out of an online conference. That is a concern right across the country.

We have seen considerable focus on staycations and people going down the country. I applaud that and people should do that. Let us not forget Dublin and the commuter belt and our day-to-day businesses. A local example is the Petit Café across the road from Leinster House. I spoke to the manager yesterday who is having terrible trouble because the footfall that normally generates in the city centre from the museums, galleries and public buildings, not to mention the commercial activity, is just not there. We need to find a way to put feet back on the street in a safe way and in a way that can support businesses allowing them to survive.

I pay tribute to the retailers. The supermarkets and convenience stores kept going through the pandemic. Those retailers and their staff put themselves literally on the front line. It is important to recognise those front-line workers as front-line heroes.

Kildare Chamber of Commerce, as with many business associations around the country, is concerned. The Bill offers a welcome channel of finance for small businesses. For anyone who wishes to avail of it, it will be lifeblood. It is not a panacea or a silver bullet, but it is a very useful and important measure. The Kildare Chamber of Commerce survey identified 10,000 active enterprises and 50,000 workers across the commercial, trade and professional services industries with an 88% employment rate prior to the emergency. Businesses are very concerned. Activity levels are extremely low. Less than half - that figure may be optimistic - of their usual activity was presenting. Earnings have dropped by more than 60%. Some 25% of businesses expect to have earnings of 70% less than normal, meaning a quarter of businesses will not even make 30% of their usual revenue. That decline has been felt most strongly in the regions, including in the east.

The smaller operators, which do not have the reserves, the ecosystem or the cashflow are seeing a significantly disproportionate impact. Those microenterprises, small businesses many of which are family run, need support. The Microenterprise Loan Fund (Amendment) Bill is part of the solution. I wish it well and I encourage everybody to apply for it and draw it down as a support for their businesses. I commend the Government on introducing it.

I welcome the increase to the Microenterprise Loan Fund and the extension of borrowing powers of Microfinance Ireland. Some questions have been raised with me in my constituency of Carlow-Kilkenny and I wish to raise them with the Minister of State. During this pandemic, the State has given great support to the people of Ireland. To quote Charles Dickens, "No one is useless in this world who lightens the burdens of another." It is not without gratitude that the business community took these supports. However, I am concerned that some businesses have been unable to access many of the supports available. This funding needs to reach those who need it.

My office was repeatedly contacted by small business owners who were prevented from accessing these loans through the enterprise board. Now that the amounts available are being increased, can the scope of who can qualify also be increased to allow many more businesses to access low-interest funding such as this?

I welcome the ability of the social organisations and community-based projects to access some of this funding. Will clear guidance be given on who can access funding? How long will it take to draw it down? Will it be in stages? Will the application process be transparent? Usually these loans require robust borrowing ability. Since we have already seen mortgages refused to the people who have been put on wage-subsidy schemes, will businesses suffer the same fate?

Some businesses, abiding by public health guidelines, have closed during the pandemic and will now reopen with less potential for profit than before. Can the Minister of State assure them that they will still qualify? Certain businesses have changed their business model, for example soap companies now fully manufacturing sanitisers, clothing companies now manufacturing personal protective equipment, PPE, chemical manufacturers now making cleaning products for commercial use and sit-in restaurants now doing only takeaways. Will they still qualify for these loans or will they be classified as new businesses despite having traded successfully for years up to the Covid-19 pandemic?

Given that so many businesses need cashflow right now, can these loans be accessed immediately? What is the timeline on decisions? Can businesses receive guidance on how long they can expect to wait for approval? It is important that these loans are not only accessed by those who have the means, but also by those who do not. Is there a system in place for help and guidance for businesses to apply for these loans? If that is the remit of the enterprise board, we really need to talk about resources. Will adequate resources be put in place to ensure that the lack of people to process applications does not hinder someone being able to stay in business?

Will people be unfairly penalised in the future for accessing the loans if their fortunes should turn? We might want to talk about creating jobs, but to create jobs we have to create the ability for business to prosper and we have to ensure that all precautions that businesses are taking to make their place of business safe for consumers, which is very expensive, are factored in when someone comes looking for a loan.

I am also very concerned about the interest rates and we need to do all we can to keep them low. The Irish Small and Medium Employers, ISME, appealed for grants as opposed to loans. We cannot do something in this legislation that is likely to lead to someone going out of business by imposing interest rates that are untenable in the future.

Can part of this funding be dedicated to local authorities through their enterprise boards to create shop-local funding initiatives, which encourage businesses and consumers to shop local? It is more important than ever for us to look at our communities and how each of us can play our part in sustaining the areas in which we live and work. I know I have asked many questions, but I would like the Minister of State to come back with some answers and then I can come back with more questions.

The Deputy cannot come back. If she has more questions, she has a little bit more time and she can ask them.

I am looking for more clarification on small shops. One of the biggest issues I have seen is the paper trail. I have been approached by shop owners in Carlow, Bagnelstown, Tullow and Hacketstown. This scheme is to be welcomed and it is very important for SMEs. Paper trails, timescale, how businesses access it and lack of information coming from Departments will be crucial. People can be put off if they constantly have to complete paperwork. Businesses that apply should not be left waiting for months with requests for further information. This has to be immediate cashflow to businesses.

In our lifetime we have never before seen businesses closed for months. Many jobs could be at stake. We need to ensure we get money to businesses as quickly as we can. We need to ensure we keep as many jobs going, particularly in towns like Carlow, Tullow, Bagnelstown and Hacketstown. We need to ensure we shop local and support our own. Following this, we need to put out a press release encouraging people to support their own, shop local and keep as many jobs as possible.

The Minister of State will be responding at the end and I am sure he will take those points on board.

I call Deputy Conway-Walsh who is sharing time.

I wish to talk about the new wage scale. If someone was on a different wage agreement before the Covid-19 crisis, can they still be included in the wage-subsidy scheme?

The main issue I raise today relates to dry cleaners and launderettes. There are no specific guidelines, supports or personal protective equipment, PPE, provided to the industry. On the contrary, the Government advised many members of the public not to use the services of dry cleaners and launderettes. The Government did not consult or engage with the industry on the guidelines, nor has it responded to the numerous queries and concerns raised by the industry. That is bizarre, particularly when one considers that the dry cleaning industry is a service regulated by the Environmental Protection Agency. Dry cleaners and launderettes are specialists at cleaning the general public's laundry and the task is deemed high risk, especially during a pandemic.

Dry cleaners and launderettes provide essential services to various sectors, including hospitality, hair, beauty and fashion, as well as schools and sports clubs, and other businesses that were closed during the lockdown. They are an essential part of the supply chain for these businesses. The pandemic has caused an estimated 50% to 80% loss of turnover to many dry cleaners and launderettes, some of which have had to close. In the past week alone, two such businesses have closed in County Mayo. Dry cleaners and launderettes need to be aligned to the hospitality sector and should be included in any VAT breaks or rescue packages offered to that sector because dry cleaners and laundry staff are highly skilled and many of them have taken years to upskill and train. The impact of losing a staff member or key worker could be the difference between a business staying open or closing.

The wage subsidy scheme needs to be in place for a minimum of one year and schemes and grants must be in place to take on new staff should others become sick because they are in a high-risk category. Those grants and supports should be provided for upskilling and PPE, especially considering the job in question. The industry now requests that all authorities and governing bodies consult and engage with it immediately on guidelines and supports. I ask the Minister of State to look at this issue and see how these businesses can be looked after because I do not want towns like mine to be left without dry cleaners and launderettes. They are essential services.

Grant aid is extremely urgent. I know the Minister of State is aware of that but the money must take the quickest possible route to these small businesses. We are talking about businesses that need the money in a matter of days or weeks. Some businesses have already closed down and will not be reopening.

We also need to get that money to smaller businesses. I am finding that smaller businesses and new start-up businesses have been unable to avail of the rates scheme that was put in place with a minimum grant €2,000. Many self-employed people, smaller businesses and new start-ups have been excluded from that grant. I ask the Minister of State to bring those people into the circle. They are talking about small sums of money, not large ones, to help with their cash flow and provide new equipment that they need to purchase at this time.

Like many other Teachtaí Dála, I have spoken to many business owners during the months of lockdown. Many people were ringing us, trying to figure out what was going on and what supports were available for businesses to be able to reopen and stay in business. Many of those business owners have shown that they have a strong social conscience. I will give a couple of examples. I was a part of the community effort in Dublin 15 through my local GAA club, St. Peregrine's. We started up a Sunday dinner for senior citizens in our community because the similar Fingal County Council initiative only ran from Monday to Friday. It was a way of helping out on Sundays. We were delivering more than 110 dinners every Sunday on a completely voluntary basis. We could not have done that without local businesses. Those businesses were struggling but gave us the support to enable us to carry out that wonderful project during the lockdown.

It is important to note that, when we talk about microenterprise businesses, we are talking about carpenters, plumbers, mechanics, café and corner shop owners. Those are very small businesses. Their owners do not have the time, and some may not have the expertise, to fill out forms and apply for grants, unlike bigger businesses that may have somebody specifically designated to fill out those forms. It is important, therefore, that we make the process as simple, clear and transparent as possible to enable these businesses to restart or stay in business.

One of the biggest concerns that people have, particularly those in shops, is about rates and how they will be supported. I know that such business owners have been supported in recent months but they are concerned about the future, particularly café owners who are worried about their capacity to allow the same number of people into their businesses that they once did. That is now completely gone. Café owners are talking about maybe 40% of the capacity that they had previously, which is not sustainable with the current level of costs. It is important that we keep this process as simple as we possibly can. We must ensure the funding gets to those who need it as quickly as possible.

Many business owners have been saying they have loans already. Some have borrowed to open their businesses, others to enable them to upskill their businesses. They are worried about taking out more loans, the level of interest they will have to pay, how they will repay those loans on top of the business loans they already have and how they will manage that. They are concerned about taking on additional debt. Some business owners are saying they would rather not take on additional debt but would instead close their businesses and see what is going to happen because of the fear that they may be left with large bills.

The small business community is the most ingenious group of people and I commend them. During the lockdown and the emergence into the period we are now in, I know a couple of businesses that were innovative. One bus owner took out all of the seats in his bus and started to work for the courier company DPD. The individual in question is now looking to establish another business for the Christmas market and is wondering how he will support it. I commend Fingal County Council on supporting that business. I also know of a gym owner whose business was closed during the lockdown. He started renting out equipment and is now looking to establish a sideline business renting out gym equipment. Small business owners are ingenious and want to ensure they stay in business. They try to diversify when they can but their existing businesses are struggling. It is important that we give them support now and make this process easy, clear and transparent. The House should support the Sinn Féin amendment.

Like the previous Sinn Féin speakers, I support Deputy O'Reilly's amendment. There are times when Deputies can all work together and this is an issue where we should all support microenterprises and small businesses. Deputy O'Reilly is arguing that if we give people 12 months during which they do not need to repay money and no interest is charged, we will give them an opportunity to keep their businesses going.

Small businesses are the lifeblood of communities in my constituency of Cork North-Central and nationally. They hire local people and provide local employment. We must consider that when we think about every local business we can save.

As we look at the finances of the State, it is a lot more financially beneficial to businesses, communities, employees and the country if we can keep small businesses operating. UCC did a study which found that on average, small businesses employ 3.1 people and are open for almost 25 years. In 2017 and 2018, 85% of them were profitable.

This goes back to what Deputy Paul Donnelly said about initiative and how small businesses are able to diversify, change and adapt. In my own community, some businesses have not reopened, including some hairdressers and gyms, because they do not feel it will be possible for them to be viable under the current restrictions. We need to provide support for them to get over the next 12 months because this period will be vital for businesses. That is why I urge the Government to look at Deputy O'Reilly's proposal. At the end of the day, we all need to work together. We are better off supporting small businesses to stay open and be viable than we are paying social welfare to the number of people who will be laid off. We need to look at the positives from a financial and business point of view but also from a personal point of view because of the consequences of people losing their jobs. When we came into this new Dáil, we said that where we could be constructive or could work with the Government, we would do so. We are asking the Government to work with us to give small business and microenterprises a chance and keep them viable.

Yesterday I was in my local launderette and the lady who has owned this business for decades was telling me that she had three staff but she cannot take them back because a lot of her business was with hotels and restaurants. As we know, that business is not there now. She is back working her launderette herself. We need to keep her going until the hotels and restaurants are back up and running full time. We have the same situation in cafés, hairdressers, restaurants and bars.

Sinn Féin wants to be positive and constructive. We are bringing forward solutions. We will try to work with the Government. The business community does not do a 39-hour week. These are people who work 50, 60 or 70 hours a week to keep their companies going. We want to support them and the staff they employ. We will do everything on our side to be constructive. I hope the Minister of State will take on board Deputy O'Reilly's amendment.

I welcome the opportunity to speak on the Microenterprise Loan Fund (Amendment) Bill 2020 and welcome the expansion in supports this Bill brings about through Microfinance Ireland Covid-19 loan funds and for the Strategic Banking Corporation of Ireland, SBCI, future growth loan scheme. These provide vital measures and it is very important that the Bill progresses through the Dáil as quickly as possible to support microbusinesses. Public health is rightfully our most important concern at this time. However, the pandemic has had a very significant and serious impact on small businesses and in particular on microenterprises. They are the engine of our local economies. They provide local jobs and it is most often local families who run them and set them up. They are very often intergenerational. I have spoken to many of these businesses in County Wexford and many are struggling to survive. Many are questioning whether they will even reopen. We are talking about laundries, cafés, tradespeople, small hardware stores, young and small enterprises, gym businesses, and other ordinary small businesses with a few employees which have suffered very hard in the last months. They are the entrepreneurs, ordinary people, the ones who took huge risks to establish their small businesses. They are also very difficult businesses to set up, and when they are lost, they are very difficult to replace.

In any funds that are provided for these small businesses, speed of access is going to be critical. It is necessary that they can get the funding quickly and that the method to get it is simple and clear. These businesses are very worried. They are seeing their cash flow collapse and bills mount up. While there was some forbearance from some creditors, many of those bills are now flying in through the letter boxes. They are concerned at how they will be supported going forward in terms of rates, VAT, loans and grants - in short, costs and liquidity. Any small business has a cost of doing business. Access to funds is critical for them to survive. I am very hopeful that this Bill will help to allay some of their fears but we will need to see more supports for them in the next couple of weeks.

These businesses provide essential and valuable services throughout our local economy. For regions and counties, like my own of Wexford and the south east, that have undergone a very slow recovery, if any, since the last recession, they are the communities that are now very vulnerable. Wexford relies on tourism and small businesses and if they are lost, it will suffer extremely badly.

These are the small businesses which are very adaptive. They are the innovative businesses and they deserve our support. We hear much discussion about IDA Ireland and big businesses, and while the latter are very important, the backbone of the country and economy are small businesses. When an IDA Ireland business closes up and moves elsewhere, small businesses stay here. We need to support them.

County Wexford is highly reliant on tourism but the industry has already lost most of the season. The season usually starts to turn on 15 August when visitors start to trail off and by September things are quiet again. Many tourism businesses have only opened on a trial and error basis to see if they can survive. If they enter the winter period without the supports they need to survive, they will not reopen in spring. Those that are open have only been able to allow in about one third of the traditional customer base but they need twice as many staff and costs are increasing. They need support.

The food and accommodation sector has probably been the hardest hit. Many businesses in the sector are family owned or small and they will not survive without the support they need. We must acknowledge the value of these businesses to our economy and country. We must protect them and, in doing so, protect local economies, families and communities and retain social cohesion. The money spent in small local businesses is kept locally. When someone goes into a hardware store and buys a few bits and pieces, the money is spent by its owners and staff in the local economy. It is not lodged in a bank account before being transferred to an account in another country. It is critical we support these businesses. Looking back at the last recession, the small businesses that survived helped our economy and country to grow again. Many of the small businesses that crashed in the last recession did not need to crash. If they had been given a small amount of support, it would have got them over six or nine months and allowed them to get going again. Good businesses collapsed because their debtors went out of business and cash flow dried up quickly.

We are facing into a recession but it will be different from the previous recession because this time there are high levels of savings in bank accounts. The figures being bandied around indicate that €2 billion was saved in May 2019, whereas in May 2020 between €10 billion and €12 billion was saved. We need to get that cash flowing, which means giving people confidence and clarity about what they can and cannot do, what they can and cannot book and what they can benefit from.

A large number of Irish people holiday at home every year, but Irish people spend around seven times more on foreign holidays. Very few people will go on foreign holidays this year. We must find a way to encourage these people to holiday at home and spend their hard-earned money in local economies, including in pubs, restaurants, hotels and other small businesses to keep them going. I appreciate that it is not easy to give an answer to everything but we need these businesses to survive. If they go out of business, the owners and their employees will lose their jobs and end up on social welfare payments, which is another cost. These are good businesses which can survive and thrive with a little support.

The Convention Centre Dublin is a strange setting but this is an important discussion. I thank all the Deputies who made the journey across to this new Chamber to discuss this Bill today and those who spoke on it in Leinster House last night when the Tánaiste introduced it. There has been a good discussion, which has focused on many aspects of the supports needed for SMEs. I thank the Ceann Comhairle and Acting Chairmen for their efforts and all the Deputies who have participated in the debate.

I am glad to hear general support across the House for the SME sector generally and microenterprises in particular. I was pleased to hear the majority of Deputies acknowledge the need to ensure that microenterprises have access to suitable opportunities to facilitate reopening their businesses and re-emerging from the Covid-19 health crisis. I agree with most Deputies that SMEs and microenterprises are the lifeblood of many of our communities, towns, villages and high streets. They often give people their first job and many give those who are retiring a part-time job. They also support many others. They have had a presence in our towns and villages for many years, creating jobs and providing goods and services and business opportunities. Many have done their best to provide a service during the past four or five months. Those which were allowed to do so went to great efforts and I thank them and their staff. I thank in particular the retail sector for providing a service and ensuring that goods were available when needed. Apart from a few items such as flour, everything that was needed was available. The retail sector upped its game and built on much of the work it had been doing on supply chains and so on as it prepares for Brexit. It showed what it can do. Retail staff went to great lengths to turn up for work and took a risk in doing so, as did all the front-line medical staff whose efforts we regularly acknowledge. We must also recognise the work done by retail workers.

We are seeking to recognise that many of the business that stayed open and those that had to close need extra help and support to reopen, re-employ staff and grow their businesses again. We are very conscious of this and the whole Government is committed to providing such support, as is the whole Dáil. All parties are at one on this issue. As Deputy Gould noted, we are all agreed on the need to support SMEs and microenterprises and encourage job growth and retention.

The Department, under the previous Minister, Deputy Humphreys, has been central to this debate for some months. It has been involved in creating jobs and sustaining growth for many years. It showed what it can do with the Action Plan for Jobs in 2012. I was lucky enough to have been a junior Minister in the Department at the time. I am now working with the Tánaiste and Minister for Business, Enterprise and Innovation, Deputy Varadkar, and the other Minister of State at the Department, Deputy Troy. We will work with our officials to deliver a cross-Government approach through the stimulus plan in July and to drive the economic recovery plan in October. The Department has an excellent team which is ready to work with all our State agencies and enterprise agencies.

An earlier speaker indicated that more than 135 agencies are working with and on behalf of the Department on job creation. They include local enterprise offices or LEOs, enterprise units in county councils, local authorities and more than 30 agencies, such as Enterprise Ireland, Science Foundation Ireland, IDA Ireland and Microfinance Ireland, which work on job creation every day. They are involved in helping business grow and expand.

Last night, one speaker pointed out that our first aim is to help businesses to survive and get through this period. Thereafter, it is to help them build on that, thrive, grow and expand, and avail of the many opportunities to which Deputies referred. We have come through very difficult times and businesses in Carlow, which Deputy Murnane O'Connor mentioned, and elsewhere are under a great deal of pressure. There are great opportunities. The retail sector is part of my brief and many speakers noted that a large amount of business is now done online, although 70% of that is based outside Ireland. Irish retail companies can dive into that market and win more market share by providing a better service with online choice. They must also provide a friendly, local service because Irish people want to buy Irish where they can. The issue is to compete on cost, which is something on which we can work with businesses. There are many opportunities to win more market share. Plenty of Irish companies are selling their goods and services all over the world and we want to encourage more companies to do so.

Enterprise Ireland does a lot of work with larger companies which have potential to grow but many other companies which are not Enterprise Ireland clients could trade internationally through other schemes we are offering.

There is loads of potential and opportunity but we are going through a very difficult time. Those businesses need the help of our various Departments to get through this. We will get through it. Part of our work is to restore confidence. Many Members asked if many businesses have the energy and confidence to continue to put more money into their business and whether or not to borrow or re-employ their staff. This is a big decision on a weekly basis and we have to work with them to give them the confidence to do that.

We have been through this before as a country. We were back there in 2011 and 2012 when we tried to drive that recovery. Massive unemployment hit here in 2008, 2009 2010, 2011 and 2012. In 2012, 2013, 2014 and 2015 we came out of that through businesses getting stuck in. The self-employed sector put their shoulder to the wheel and took that risk and the opportunity to invest again in their business. It takes guts to do that and we need to support them in doing that but I am quite confident that with the right supports we can get this right as well.

Referring back to this Bill, it is not the only thing that we need to do. There are other measures already in place to support SMEs. The key here is getting access to funding which is a big issue for many companies, certainly microenterprises, be they start-ups, existing businesses or businesses trying to reopen. It is about access to that finance at the right time, in a speedy manner and at the right price. The previous Government had already put in place new and expanded schemes to address Covid-19. The new Government is hitting the ground running to do the same, starting with this Bill and the credit guarantee scheme which the Tánaiste and I and the Minister of State, Deputy Troy, hope to bring before the Houses before the summer recess.

I was also happy to hear a range of ideas from across the House on other schemes which we can examine with a view to including them either in the July stimulus plan or the economic package planned in October. The Tánaiste in his opening speech asked contributors, while commenting on this Bill, to put forward their own ideas to feed into this July stimulus. I hope to engage with all of the spokespersons of the different parties to get their ideas over the next week or two to put that plan together. All of the three Ministers in our Department have been reaching out to the various sectors to get their own ideas and views. I am conscious that the July stimulus plan will not be just be from our own Department but will be from all other Departments whereby we can make interventions to try to encourage recovery, to save and recreate jobs and to give everyone a little bit of a boost and build on that later on in the year as well. We are open to looking at everything that we can possibly do.

Not all of these ideas may be workable. Many ideas were put forward here today, some are workable, some are not and some may take more funding than we have available. Some may also take longer to put in motion but we will take all ideas and we are naturally willing to work with all of those over the years ahead. My officials and others have taken note of all of the contributions over the last few days and we are looking at these and will contact individuals if I do not get a chance to refer back to them today.

Microfinance Ireland is a not-for-profit lender which was established in 2012 under the Microenterprise Loan Fund Act. It has been providing business loans of up to €25,000 for up to five years to enterprises employing up to nine full-time equivalents. Many Members during the debate asked us to go beyond nine and that is something that I would have called for myself in the past. It is not possible to do this under European legislation but there are many other supports for companies with over ten staff. This is targeted particularly for those with up to nine staff.

Deputies also asked about the different types of businesses that might avail of this. It is accessible to nearly all types of businesses. The application process is quite straightforward and can be completed in most cases in less than six days. The sector does try to respond as quickly as it possibly can with a good service. I want to stress the point about the lender being not-for-profit - Deputy Mattie McGrath contributed last night and asked about different parts of this and that it is quite popular in Tipperary and other counties. The question was asked about cost and in particular interest costs. To be clear, Microfinance Ireland does not make profit on charging interest costs. It tries to cover all of its costs, but it is loaning into a high-risk category which is traditionally what it does, to start-ups and companies which are unable to get finance elsewhere generally or where the banks, for whatever reason, do not want to loan to them. This category is generally high cost and high interest. In the past, Microfinance Ireland has managed to loan money at between 7% and 8%. Already through changes made by the Minister, Deputy Humphreys, earlier this year in response to Covid-19 that interest rate has been reduced to 4.5% in most cases if through a LEO, or 5.5% if the loan is made directly through MFI. We have already responded to the interest rate call and would like to do more. I am willing to discuss this with Deputy O’Reilly to see how we can agree on this. I am aware that an amendment has been put down. We cannot put targeted interest cost into primary legislation or a time line for a deferral of payments for 12 months. This is something that we can look at in the regulations and in the scheme as we produce it. I will discuss it and work with the Deputy on this. This cannot be done by way of amendment to primary legislation, which is not where it belongs. We can see if we can reduce the cost of the interest rates and the terms as well. We have made the first six months interest free which effectively means that the interest rate is 3% over a three-year loan as opposed to 4.5%. Very often loans like this could have a charge between 10% and 15% on the open market. This is already quite a subvented percentage rate. We will look at and work with the Deputy on this. To be clear, nobody is making profit in charging 4% or 5%. People are saying that the money is coming from Europe at a much lower interest rate and what is the difference. It is not profit, it is the risk involved. The taxpayer subsidises that risk and that is what we do when we put our funding of over €100 million into this.

On the amount of money loaned, it can be up to €50,000. The average loan in the past was approximately €25,000.

Many Deputies referred to the application process being long and difficult. It should not be. Deputy Murnane O’Connor mentioned that and I am very happy to discuss that with her as the loan is very open to all sectors. It is quite straightforward. There is lot of hand-holding and coaching with the application process by MFI and our LEOs, because that is what we want to do in trying to help people who might not be familiar with drawing down big loans which might be new to them. Certainly, for a microenterprise or a start-up there is much engagement and a number of efforts are made to get the forms right. Sectors should not feel it is difficult or they are left out and I will be happy to discuss this also with the Deputy. We try to accommodate as well as we possibly can.

A number of contributors have referred to the approval rates of 40% to 50%. It is much higher than that if one looks at the applications over the last number of months as it is at about 80%. That is something that we try to encourage. We have asked MFI to be aware that businesses need supports now, to allow for that and to take greater risks. One of the first questions I would have asked is around the success of MFI. On the failure rate in terms of loans being repaid, often 50% to 60% of these loans may not be in a position to be repaid as there is quite an amount of losses associated with this kind of risk-based lending. It is important that we allow for that. That means that we are taking a chance on businesses and giving start-ups an opportunity.

When I first got involved in politics I was involved in enterprise boards close to 20 years ago and I would have been unhappy if there was not a reasonably high failure rate. If the failure rate is too low and it is all success, this means that we are taking no chances. If we are to encourage entrepreneurship, business growth and opportunity, we have to take a risk and to encourage all of our agencies to allow for that little bit of risk which will mean some losses and that some loans cannot be paid back. That may be because of market failure. Every effort is made to ensure a business is run right and can pay back debts. Sometimes with these loans one has to take a chance, let it go and see what happens, which is something we encourage. I will want to hear back from colleagues if there are hearing differently to this.

Many of our contributors last night, including Deputies Harkin, O’Reilly and MacSharry, raised the issue of the interest rates which I hope I have addressed. Deputy O’Reilly’s colleagues in Sinn Féin and many others support her amendment, which is worthy, and we would all like to do this and are calling for that lower interest rate. This is something that we will work on and look again at, bearing in mind that this is not-for-profit loan facility.

The operation of the loan schemes is through MFI and through the LEOs. Many contributors asked about various loans through the regular retail banks. This loan is not through these banks. The credit guarantee scheme is a different scenario which we will be debating next week and it is operated through the existing financial arms to help us to reach out to all parts of the community and give access for everybody.

Part of the conversation was also about getting the message out that MFI loans are available. We will certainly look at the communications to see if we can increase that because we do want to see these loans drawdown. When this scheme first started in 2012 and 2013, we did expect higher rates of drawdown but as the country recovered there was not such a demand for loans through Microfinance Ireland. That has been increasing over the last number of years and certainly over the last four or five months there has been and will be a much greater demand. We are responding to that. That is what this legislation is about, namely, is putting in place a mechanism which will enable businesses to borrow and drawdown more money to meet that demand. I ask Members not to judge MFI on its previous applications because these were made in different times. One will see many more applications coming through this year, which is what we are getting ready for. We will have to respond in many other ways also and that is what the July stimulus plan is about.

Many people raised issues outside of the microfinance loan such as rates. Deputy Andrews asked a question about Dublin City Council not being able to get clarity. There was absolute clarity on this. The Restart grant is based on last year’s rates which were paid in 2019 up to €10,000, with a minimum figure of €2,500. Most businesses which needed this have applied for it and are drawing it down. In some cases there may be a small delay in drawing it down but business knows it is going to get it.

Deputy Andrews raised the issue of the three-month waiver in respect of this year's grants. For clarity, the three-month waiver is available to everybody. Some of the local authorities are still working through applications for it because there are issues that remain to be sorted out related to the finance and the back payment to local authorities to cover that cost but it will be available. Some people might get a still get a bill but the three-month holiday is available to them. There have been many calls to extend the waiver and we will look into that as well in the context of the July stimulus.

With the permission of the Acting Chairman, Deputy Lahart, as we are ahead of time I would like to respond to some of the other issues that were raised. Many Deputies, including Deputy O'Reilly, raised the issue of the processing time for loans. The processing time is generally less than six days. I am sure there will be cases where processing has not been completed within that timeframe but we will keep the focus on this area. If Deputies are aware of any such cases, I am happy to hear from them in that regard. Generally, the processing time is less than six days. In fairness, feedback on some recent applications might be taking longer because technically the money had run out until such time as this legislation is passed. In some cases, the local authorities will not have had the funding to process applications. Following enactment of this Bill, assuming we have the support of the House today, we will move to get that funding in place as quickly as possible.

Deputy Catherine Murphy and others raised the issue of the approval rates for loans. The risk appetite has significantly increased and the approval of applications is approximately 80%, and rightly so in my view. I want to assure Deputy Dillon that officials are working with Microfinance Ireland, MFI, on approvals. As I said, the approval rate is approximately 80%. The Deputy also mentioned the need to communicate to people that this loan offering exists. We will work on that. Deputy Naughten spoke about using the partnerships and LEADER staff as vehicles to get the word out and to work with applicants. I am happy to do that. The local enterprise offices, LEOs, are already doing this work, although I know they are stretched in some cases in terms of staff numbers. We will use all channels available to us to get the message out and to work with companies who want to apply for this loan as well.

Deputy Ó Ríordáin expressed concerns about the three-year term of the MFI loans. I will take this into account when we are developing a new scheme under the Act, along with the interest rate and so on. There are other schemes in place, including the credit guarantee scheme and the future growth loan scheme, which have longer terms of six years and eight to ten years, respectively. In the past, the MFI loan worked quite well as a three-year term but we will re-examine it.

The issue of demand was also raised. Many Deputies mentioned they had received feedback from their constituents in regard to the demand for this scheme. Demand has increased tenfold over the past couple of months, which shows the pressures on businesses as reflected in the contributions of all of the speakers to this debate over the past two days. There is a demand for this loan. We will respond with this scheme and other schemes to meet that demand and to support businesses through this difficult time.

Many Deputies mentioned that the demand is for grants, not loans. We all would like to be able to provide grants to the various sectors but it does not work that way. There are grants available for particular sectors and more grants will be made available to support business as much as we can, but the taxpayer does not have an endless purse to fund everything. We are trying to stretch the purse as best we can and to combine our offerings and supports through grants, investment with equity, loans and so on. The microfinance loan and credit guarantee are other tools in the box to help business as well. We cannot always provide grants. The restart grant is not repayable and the rates waiver is not repayable. I have heard the message from Deputies that businesses want more grants and fewer loans. We get that and we will respond. Every business would respond in the same way. Most business sectors and their representative bodies understand that the State will not be able to address every issue by way of grants and that some assistance will be by way of repayable loans. How to make those loans more manageable is the issue. The amendment tabled by Deputy O'Reilly is about giving businesses more time to repay loans, lower interest rates and so on. We get that too, and as a Department we will work on that as well.

Deputy Pringle asked about the barriers to people drawing down this loan or other loans and if the interest is a deterrent in that regard. None of the research worked through by the Department, of which there is plenty, shows that the interest rate is the main deterrent or barrier to the drawdown of this or other loans. Rather, the application process, making a business case, access to coaching and mentoring to restart or expand a business are the main issues. While none of us want to repay loans at a high interest rate, the interest is not the biggest deterrent or barrier. As I said, accessing the funding is the issue and this is where we are focusing our efforts.

Deputies Michael Collins, Pa Daly, Michael and Danny Healy-Rae, Christopher O'Sullivan and others raised the issue of supports for the tourism sector. There is a big demand in this regard as well, to which we have yet to respond. There have been some interventions but no doubt more will come through in the July stimulus package. As a country we are reliant on the tourism sector, along with our SMEs. Deputy O'Sullivan spoke about supports for business in the fisheries and agriculture sectors. Many of the business supports being provided are provided in conjunction with other Departments. We will respond to those sectors. It is hoped we will be able to reach all of the sectors. The July stimulus plan and the October economic recovery plan for the next three years will have to respond sector by sector. We will have to examine each area individually to see what we can do to sustain businesses and to enable them to thrive and grow.

Deputy Ó Murchú spoke about businesses that were viable before Covid but might appear on paper to be unviable now. All of the supports provided down through the years have been directed to viable businesses that can survive, thrive and grow again. As a rule, we do not like putting money into businesses that have no chance of survival. That is a matter of judgment. We have to focus on businesses that in normal times would survive and will be able to survive now with a grant or a loan. This is where we will focus our efforts. If a business was viable up until February then we will work it to assist it to get up and running again. The country and our economy need businesses open. We need businesses employing people, creating jobs, paying taxes and enabling the movement of money through the system. It is those jobs and the finance derived from the various taxes that help to run this country. As has been repeatedly said for many years, a functioning economy is needed to fund all of the services we need to improve, be those in health, education or other sectors. We will work with every sector to try to make sure they are enabled to survive, reopen and re-employ their staff.

The online trading voucher scheme was mentioned by a number of Deputies. There is huge demand for it, and rightly so. We have to respond to that demand. The former Minister for Communications, Climate Action and Environment, Deputy Bruton, increased the funding available to all of the sectors in respect of this scheme. We probably need to do more because there is greater demand for it now. We will respond to that demand. It is a worthwhile voucher. I recall that in my earlier years in the Department with responsibility for business I spent a great deal of time trying to convince businesses to take up this voucher. We worked hard to push and sell it but there was no great demand for it. People have come to realise over recent months that this is what we need to do. We need to get as many businesses as possible trading online successfully. We will work hard to ensure that happens.

In addition to the online trading voucher scheme, we have provided an additional €6.5 million for the online retail scheme, which was originally to be a €2 million offering, but as there were a number of high-end successful applications, totalling 183, we responded by increasing the funding available to €6.5 million. We are trying to meet needs as they come forward.

There were references to credit unions and the banks.

I must ask the Minister of State to conclude.

I am trying to respond to all of the questions.

I think I have answered most of the questions. I am conscious there are others to whom I have not responded but I will come to back to them individually. In regard to the issues raised, we will work on them and feed them into the system over the next couple of months. The Tánaiste, who opened this debate but could not be here today to close it, the Minister of State, Deputy Troy, and I will work with Deputies and other Departments on the issues arising in the months ahead. We are all on the same page in that we want to support jobs and job creation as well and as best we possibly can.

Question put and agreed to.