Dáil Éireann Debate, Wednesday - 3 June 2020
467. Deputy Róisín Shortall asked the Minister for Business, Enterprise and Innovation if consideration has been given to the specific needs and challenges facing businesses operating in the supply chain for the food service, catering and hospitality sectors (details supplied). [9158/20]
View answerCovid-19 has brought unprecedented challenges for all of us in society, since the start of the pandemic, a key focus of Government has been to keep the supports provided for businesses under review and to continue to offer support as they work through the challenges facing them. These supports include those challenges facing businesses operating in the supply chain for the food service, catering and hospitality sectors.
In order to assist businesses to address the challenges posed by COVID-19, the Government has put in place a comprehensive suite of supports for firms of all sizes, which includes the wage subsidy scheme, grants, low-cost loans, write-off of commercial rates and deferred tax liabilities. These supports are designed to build confidence, to further assist businesses in terms of the management of their companies and to allow them to begin looking to the future and start charting a path forward for weeks and months ahead. For a full list of supports for business please see
https://dbei.gov.ie/en/What-We-Do/Supports-for-SMEs/COVID-19-supports/.
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 Covid-19 Working Capital Scheme is offered 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 €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 a further announcement 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.
The scheme is open to eligible SMEs and small mid-caps (businesses of up to 499 employees) negatively impacted by Covid-19. Loans under the scheme range from €25,000 to €1.5m and are for periods of up to three years. The maximum interest rate under the scheme is 4% and loans of up to €500,000 are available unsecured.
The Future Growth Loan Scheme currently 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, resulting in a rapid take up of the scheme. Funding made available by the scheme facilitates long-term, strategic investment.
The scheme is open to eligible SMEs and small mid-caps (businesses of up to 499 employees), including those in the primary agriculture and seafood sectors. Loans under the scheme range from €100,000 (€50,000 for farmers) to €3m per eligible business, with loans of up to €500,000 available unsecured. The initial maximum interest rate is capped at 4.5% for loans up to €249,999 and 3.5% for loans more than or equal to €250,000 for the first six months. These rates represent a significant saving compared with the prevailing rates that are otherwise being offered for similar loans on the market.
This scheme has been 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.
The Covid-19 Loan, available from Microfinance Ireland (MFI), was introduced as a support to microenterprises to help them access funding arising from the Covid-19 crisis.
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 months interest free and repayment free moratorium, with the loan to then be repaid over the remaining 30 months of the 36-month loan period.
An interest rate to 4.5% applies on the Covid-19 loans provided by MFI. This reduced rate is available to all micro-enterprises where the application is made through the Local Enterprise Network or referred by a bank or Local Development Committees. The new rate for direct applications to MFI is reduced to 5.5%. As these loans are available interest free for the first six months, the net effect is to further reduce the net interest rate payable over the period of the loan.
Government has agreed a new €2 billion COVID-19 Credit Guarantee Scheme as a further development of the existing Credit Guarantee Scheme already available. This Scheme forms a major component of the government’s strategy to aid SMEs in these difficult times by providing critical support to ensure businesses are facilitated in having access to credit facilities to assist a return to a more regular trading environment. It will provide an 80% guarantee on lending to SMEs until the end of this year, for terms between 3 months and 6 years. The guarantee will be able to be used for a wide range of lending products between €10,000 and €1 million that have a maximum term of 6 years or less.
The Scheme will be available to all SME sectors, including primary producers. It will also have interest rates below current market rates. The implementation of this Scheme will require primary legislation, the drafting of which has commenced.
There are a number of liquidity supports for COVID 19 impacted businesses available now, including the existing Credit Guarantee Scheme which was implemented in 2012, supporting loans up to €1 million for periods of up to 7 years. The scheme is designed to support a range of debt products appropriate to the borrowing needs of SMEs. An application to access the Credit Guarantee Scheme can be made through one of the participating lenders which are currently Allied Irish Banks, Bank of Ireland and Ulster Bank Ireland.
The €2,500 Trading Online Voucher Scheme for microenterprises is being expanded - an additional €3.3m is being provided to the scheme bringing the total available to €5.6m. 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.
As the reopening of the economy proceeds, more and more businesses are transitioning from the planning to the implementation phase as we progress through the 5 stages of the Government Roadmap. It is in this context that the Business Continuity Voucher is being phased out and since 15 May, is closed to new applicants. The LEOs will continue to work with existing applicants and recipients of BCV vouchers and their subsequent business continuity plans. The awarding of vouchers under the BCV scheme will naturally taper off in the coming weeks as the Local Enterprise Offices process the outstanding applications. In recognition of this new stage the new €250m Restart Grant was introduced to assist micro and small businesses to help them with the costs associated with reopening and reemploying workers following COVID-19 closures.
Enterprise Ireland, on behalf of the Department of Business Enterprise and Innovation has launched a new suite of COVID-19 supports, including the following.
Sustaining Enterprise Fund: This €180 million fund will provide support to eligible manufacturing and internationally traded services companies employing 10 or more employees who have been impacted by a 15 per cent or more reduction in actual or projected turnover or profit, and/or have a significant increase in costs as a result of the COVID-19 outbreak. The objectives of the scheme are to:
- Ensure eligible companies have access to the necessary liquidity; and
- Sustain business so that companies can return to viability and contribute to the recovery of the Irish economy.
The Fund will provide financial assistance in the form of repayable advances of up to a maximum of €800,000 per company.
Sustaining Enterprise Fund – Small Enterprise: This fund will provide a €25,000 to €50,000 short term working capital injection to eligible smaller companies to support business continuity and strengthen their ability to return to growth and be trading strongly in 3 years-time.
COVID 19 – HPSU Fund (SEF – HPSU): This fund is aimed at EI High Potential Start-Up companies who, due to the Covid-19 pandemic are facing delays to projected sales growth and whose fundraising plans are significantly impacted or stalled. Under this fund, HPSUs can apply for co-investment of €50,000 per undertaking in the form of equity or convertible debt instruments.
In addition to this fund Enterprise Ireland has launched the following supports:
Covid-19 Business Financial Planning Grant: A €5,000 grant for eligible companies to work with third party consultants to prepare a detailed financial plan with forecasts and assumptions. 337 applications have been received for Covid-19 Business Financial Planning Grant.
Lean Business Continuity Voucher: A €2,500 voucher for eligible companies to access training or advisory services support related to the continued operation of their business during the current pandemic. 156 applications have been received for the LEAN Business Continuity Voucher.
Covid-19 Online Retail Scheme is a grant for retail companies with greater than 10 employees to develop a more competitive online offer. This competitive call has a budget of €2 million. Successful applicants will receive funding support of up to 80% of project costs, with a maximum grant of €40,000.
Restart Grant is a new €250m Restart Grant providing direct grant aid to micro and small businesses, application forms are now available online on all local authority websites. The grant is a contribution towards the cost of re-opening or keeping a business operational and re-connecting with employees and customers.
To qualify for the Restart Grant, a business must
- have a turnover of less than €5m and have 50 or less employees.
- have suffered a projected 25%+ loss in revenue from 1 April 2020 to 30 June 2020.
- commit to remain open or to reopen if it was closed. The business must also declare the intention to retain employees that are benefitting from the Temporary Wage Subsidy Scheme (TWSS).
In addition to these new supports, there are a range of other supports to assist companies to start to scale, innovate, remain competitive, diversify into new markets and respond to Covid-19; these are:
- Strategic Consultancy Grant
- Act On supports
- Key Manager Grant
- Business Process Improvement Grant
- eiLearn Online Learning Platform
- EI Virtual Mentoring Support.
Enterprise Ireland provides support for new start-ups and existing business through a wide range of initiatives and supports. The awarding of funding by the agency is based on eligibility, evaluation criteria and assessed company need.
InterTradeIreland
ITI has launched two new business supports, these are currently being targeted at companies who are already on one of their programmes.
E-merge: this will enable companies to engage consultancy support & advice (to the value of £2500/€2800) to help them develop online sales & ecommerce solutions
Emergency Business Solutions: Fully funded consultancy support & advice (to the value of £2000/€2250) to address key business challenges in areas such as emergency cashflow, loan applications and HR/People.
Together with the suite of Covid-19 supports The Return to Work Safely Protocol has been designed to support employers and workers to put measures in place that will prevent the spread of COVID-19 in the workplace, as the economy begins to slowly open up, following the temporary closure of most businesses during the worst phase of the current pandemic. The national Return to Work Safely Protocol is designed to translate these measures into a clear compliance framework designed for places of work. This is to help businesses to reopen so that workers can feel safe returning to work. The Health and Safety Authority will ensure compliance with the Protocol through a range of measures including advice, guidance, inspection and enforcement action as appropriate under the Safety, Health and Welfare at Work Act 2005.
The National Return to Work Safely Protocol is a useful guide for businesses in making their assessments and adapting their workplace procedures and practices to comply fully with the COVID-19 related public health protection measures. It sets out in very clear terms for employers and workers the steps that they must take firstly before a workplace reopens, and then while it continues to operate.
The Protocol is available on www.gov.ie
The HSA will be the lead agency in overseeing compliance with the Protocol in the workplace. If employers or employees need further guidance on the Protocol, the HSA Helpline can be contacted at 1890 289 389 or wcu@hsa.ie.
The National Standards Authority of Ireland’s (NSAI) recently published COVID-19 Workplace Protection and Improvement Guide and the Covid-19 Retail Protection and Improvement Guide contain useful information that can be applied across many businesses.
It is important to check https://www.gov.ie/en/campaigns/c36c85-covid-19-coronavirus/ for the latest information, public health advice and guidelines from Government in relation to Covid-19.
Information and guidance for taxpayers and agents on the Temporary Wage Scheme can be found on the Revenue website at:
https://www.revenue.ie/en/corporate/communications/covid19/temporary-covid-19-wage-subsidy-scheme.aspx .
The Government will continue to monitor the need for sectoral guides, and should a need arise, I will work with my Department and Agencies to consider how we would best support or publish such a guide. 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.
