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Covid-19 Pandemic Supports

Dáil Éireann Debate, Wednesday - 27 May 2020

Wednesday, 27 May 2020

Questions (427)

Seán Fleming

Question:

427. Deputy Sean Fleming asked the Minister for Business, Enterprise and Innovation the detailed proposals in terms of funding, cash flow and capital resources available to the hotel sector, the business of which for 2020 has been decimated due to the Covid-19 crisis; the supports in place for companies whose turnover will be dramatically reduced but will have ongoing commitments in terms of bank repayments and overheads; and if she will make a statement on the matter. [7514/20]

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Written answers

Since the onset of the Covid-19 crisis, Government has worked to ensure that appropriate supports are in place for businesses in sectors that have been exposed to negative impacts arising as a result of the outbreak and the measures put in place to mitigate the spread of Covid-19 in Ireland. I understand that some businesses, such as those operating in the hospitality sector, have been particularly affected by this crisis.

The SBCI Covid-19 Working Capital Scheme opened for eligibility applications on 23 March. The scheme is offered by my Department in cooperation with the Department of Agriculture, Food and the Marine. The scheme is operated by the SBCI. It currently makes available a fund of up to €200m 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 announcement on 8 April, this scheme is now being expanded to make available an additional €250m in lending, which will bring the total amount of lending available under this scheme to €450m.

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. On 8, I announced that this scheme would be expanded by a further €200m to facilitate longer-term lending to Covid-19-impacted businesses and my Department is working through the details of this expansion and will bring this funding to market as soon as possible.

For micro-enterprises in the hospitality sector, the Covid-19 Loan, available from Microfinance Ireland (MFI), has been introduced as a support to microenterprises to help them access funding arising from the Covid-19 crisis. Microenterprises are enterprises with less than ten employees.

These loans are available for eligible microenterprises responding to Covid-19-related difficulties, the negative impact of which must be a minimum of 15% of actual or projected income or profit. Loans up to €50,000 are available with terms that include a six-month interest-free and repayment-free moratorium, with the loan to then be repaid over the remaining 30 months of the 36-month loan period. These loans are available at an interest rate of 4.5% to all micro-enterprises where the application is made through the network of Local Enterprise Offices around the country, or where referred by a bank or Local Development Committees. An interest rate of 5.5% is applied to loans sought directly through MFI.

In terms of new supports, on 2 May, I announced a €2billion Credit Guarantee Scheme to support lending to SMEs for terms ranging from three months to six years. Loans under the scheme will be offered at below market interest rates.

I also recently announced a new €250m Restart Fund, which will be a critically important tool in supporting small businesses as they begin to reopen.

This has been a period of unforeseeable disruption to businesses around the country, and I am conscious that there have been significant impacts on otherwise viable businesses. I would encourage businesses that have been negatively impacted as a result Covid-19 to take advantage of these supports wherever appropriate.

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