Wednesday, 13 May 2020

Questions (441)

Robert Troy


441. Deputy Robert Troy asked the Minister for Business, Enterprise and Innovation if she is examining a specific business support fund for companies impacted by Covid-19. [4380/20]

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Written answers (Question to Business)

I announced on April 8 a major expansion of supports for all businesses impacted by COVID-19.

The package is now worth €1 billion in liquidity measures including a new €180m Sustaining Enterprise Fund for firms in the manufacturing and international services sectors. Free mentoring and online training are also available for all SMEs. This package is a significant step-up in the supports available for all businesses in all sectors at this very difficult time. The measures have been developed to meet the varying needs of Irish enterprise and they are very specifically targeted by size, sector and need.

In addition to the new package of liquidity measures I announced are detailed below, the full range of Enterprise Ireland, IDA, Local Enterprise Office (LEO) and Údarás na Gaeltachta grant and advisory supports continue to be available to eligible firms to help with strategies to access finance, commence or ramp-up online trading activity, reconfigure business models, cut costs, innovate, diversify markets and supply chains and to improve competitiveness.

In that regard, Government will continue to explore funding potential for all enterprises including micro-enterprises as they work through the challenges facing them, including through any mechanisms allowable through the EU’s state aid framework.

The key measures which constitute the €1 billion in liquidity measures as I announced are set out below.

The SBCI Covid-19 Working Capital Scheme was announced on 11 March and opened for eligibility applications on 23 March. The Covid-19 Working Capital Scheme is offered by my Department in cooperation with the Department of Agriculture, Food and the Marine, and is supported by the InnovFin SME Guarantee facility. The scheme is operated by the SBCI. It currently makes available a fund of up to €200 m to eligible businesses that have been negatively affected by impacts arising from the outbreak of Covid-19 to enable those businesses to innovate, change or adapt in response to the current business environment. Following my further announcement on April 8 this Scheme is now being expanded to make available an additional €250 million in lending, which will bring the total amount of lending available under this scheme to €450 million.

Up to 4 May, there has been a total of 2,127 applications received to the COVID-19 WCS, of which 1,834 candidates were eligible, 9 ineligible and 284 applications are currently in process. Of those, 156 loans have progressed to sanction to a total value of €28.02m.

The Future Growth Loan Scheme makes up to €300 million of loans available with a term of 8-10 years and is operated by the Strategic Banking Corporation of Ireland (SBCI) though participating lenders. We have seen strong demand for the scheme since its launch in April 2019 across all sectors and regions including in exporting businesses and family businesses.

Up to 4 May, there has been a total of 3,449 applications for eligibility under the scheme, of which 3,286 have been approved for eligibility under the scheme. The initial €300m funding for the FGLS has been almost fully subscribed, supporting a significant level of strategic investment by businesses. On 8 April, I announced a further expansion of this scheme and my Department is now working through the details of a significant expansion to bring this funding to market as soon as possible.

New €2,500 Business Continuity Voucher. This Voucher is available through Local Enterprise Offices and is designed for businesses across every sector that employ up to 50 people. It can be used by companies to develop short-term and long-term strategies to respond to the Covid-19 pandemic.These measures are in addition to the €150m of funding capacity in the Government’s Credit Guarantee Scheme. For microenterprises with under 10 employees, I am providing Microfinance Ireland (MFI), which is administering special COVID-19 Loans, with an additional €13m in capital support bringing its total lending capacity up to €20m for the coming period. There is also a substantial reduction in interest rates on these loans from 7.8% to 4.5%. Loans can be made up to €50,000 with no repayments required and no interest charged in the first six months.

In addition, I have expanded the €2,500 Trading Online Voucher Scheme for microenterprises, with an additional €3.3m being provided to the scheme bringing the total available to €5.6m, in conjunction with my colleague the Minister for Communications and Climate Action. The scheme is also being made more flexible - allowing businesses to apply for a second voucher of up to €2,500 where they have successfully utilised their first one; and allowing subscriptions to low-cost online retailing platform solutions to quickly establish a retailing presence online.

€180m Sustaining Enterprise Fund. This is specifically aimed at all firms with 10 or more employees in the manufacturing and international services sectors impacted by COVID-19 that are vulnerable but viable. The Fund will be operated by Enterprise Ireland, providing repayable advances of up to €800,000 as agreed with the EU under new State Aid rules and, together with leveraged lending from the financial markets, should see up to €500m of additional investment in vulnerable but viable firms. These grants will only be repayable if and when a business returns to financial good health.Help for Business planning:

· Business Financial Planning Grant from Enterprise Ireland to the value of €5,000 to assist companies to develop a Business Sustainment Plan and to engage the services of an approved Financial ConsultantOnline Retail Scheme

. A new €2m Online Retail Scheme from Enterprise Ireland will be open to retailers employing over 10 people. The objective of the Scheme is to support companies in the indigenous retail sector with a pre-existing online presence to respond to both the domestic and international consumer demand for a competitive online offer. Grants ranging from €10,000 to €40,000 will be awarded under the competitive scheme.

On Saturday 2 May last, I also announced a further suite of measures to support small, medium and larger business that are negatively impacted by Covid-19 with Minister Paschal Donohoe, T.D., Minister for Finance and Public Expenditure and Reform and Minister Eoghan Murphy, T.D., Minister for Housing, Planning and Local Government. This package of support followed the publication of the Government’s Roadmap for Reopening Society & Business, which sets out a five-stage plan to ease the Covid-19 restrictions and reopen Ireland’s economy and society. The new measures we announced included:

- A €10,000 restart grant for micro and small businesses based on a rates/waiver rebate from 2019;

- A three-month commercial rates waiver for impacted businesses;

- A €2 billion Pandemic Stabilisation and Recovery Fund within the Ireland Strategic Investment Fund (ISIF), which will make capital available to medium and large enterprises on commercial terms;

- A €2 billion COVID-19 Credit Guarantee Scheme to support lending to SMEs for terms ranging from 3 months to 6 years, which will be below market interest rates;

- The ‘warehousing’ of tax liabilities for a period of twelve months after recommencement of trading during which time there will be no debt enforcement action taken by Revenue and no interest charge accruing in respect of the warehoused debt; and,

- A commitment to local authorities to make up the rates shortfall, so that local authorities can continue provide full services to the public.

I can assure the Deputy that I continue to work with my colleagues across Government to examine further appropriate supports to assist businesses impacted by Covid-19.