My Department is responding rapidly to put in place appropriate supports for businesses that have been negatively impacted by Covid-19 and continues to explore every available avenue for the delivery of further supports.
On 19th March 2020 the Commission approved a Temporary State Aid Framework under Article 107 (3)(b) TFEU (aid to remedy a serious disturbance in the economy of a Member State). Schemes and/or individual aid measures notified under this framework will be processed by the Commission within days.
The purpose of the Framework is to provide temporary, limited amounts of aid to undertakings that find themselves facing a sudden shortage or even unavailability of liquidity which is appropriate, necessary and targeted.
Ireland’s inputs into the development of the Temporary State Aid Framework and subsequent amendments was coordinated by the State Aid Unit in my Department. This included engagement with the Commission on the two subsequent amendments to the Temporary Framework, the first of which was adopted on 3rd April 2020 and the second was adopted on 8th May 2020. These amendments have provided Member States with additional options to tackle the economic impact of the Covid-19 crisis.
Options available under the Temporary Framework (as amended on 8th May 2020) are:
1. Direct Grants, Repayable Advances or Tax Advantages (equity and loans are now also available as per the amendment of 3rd April 2020) up to €800,000 per undertaking.
2. Loan Guarantee Schemes
3. Aid in The Form of Subsidised Interest Rates for Loans
4. Recapitalisation measures in the form of equity or hybrid capital instruments such as convertible bonds.
5. Subordinated debt measures.
Under section 3.1 of the Temporary Framework, DBEI notified and received approval on 31st March 2020 for €200m Sustaining Enterprise (Repayable Advances) Scheme to be operated by Enterprise Ireland and IDA Ireland and to provide repayable advances of up to €800,000 available to firms within the manufacturing and/or internationally traded services sectors.
Following the first amendment to the Framework and given the greater flexibilities offered under these amendments, the Repayable Advances scheme was re-notified to the Commission as the Sustaining Enterprise Scheme under which the EI/IDA repayable advances fund (Sustaining Enterprise Fund), now expanded, operates. The Sustaining Enterprise Scheme will provide the opportunity to support enterprises with less than 10 employees and includes a broader range of measures under which aid can be granted. Supports already available under existing State aid rules include:
- Covid-19 loans of up to €50,000 from Microfinance Ireland for micro enterprises. Loans are available at an interest rate of between 4.5% and 5.5%, with the first six months interest and repayment free. Businesses can apply through their nearest LEO or directly at microfinanceireland.ie
- The SBCI Covid-19 Working Capital Scheme s opened for eligibility applications on 23 March. The maximum loan size under the scheme is €1.5m (first €500,000 unsecured) and the maximum interest rate is set at 4%. Eligibility criteria apply. Applications can be made through the SBCI website at sbci.gov.ie
- The Credit Guarantee Scheme supports loans of up to €1m for periods of up to seven years. Applications can be made to AIB, Bank of Ireland and Ulster Bank.
In addition to the new package of liquidity measures announced by the Minister last week, including for micro-enterprises, the full range of Enterprise Ireland, 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. Government will continue to explore funding potential at EU level, as necessary, for all enterprises including micro-enterprises, through funding mechanisms such as the European Regional Development Fund and through the EU’s temporary state aid framework.
My officials will continue to work with the Commission and with our Enterprise Agencies to ensure that enterprises are supported during this extraordinary and difficult time.