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. The launch of the €250m Restart Grant by Government on the 22 May last is an example of how I am continually looking at the most appropriate mechanisms to help businesses as we reopen our economy. The Restart Grant provide a direct payment to local businesses of between €2,000 to €10,000 to help them meet the costs of reopening.
The range of supports available from my Department and across Government 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, 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 Loan, available from Microfinance Ireland (MFI), was introduced as a support to microenterprises to help them access funding arising from the Covid-19 crisis and is working successfully. In 2.5 months, MFI has approved Covid-19 loans of over €14.3 million, which is more than double the value of total loans approved for the entire year in 2019.
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 ver 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.
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 €200 million 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, work is now under way on a significant expansion to this Scheme.
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 Trading Online Voucher Scheme is funded by the Department of Communications Climate Action and Environment and delivered nationwide in partnership with my Department, Enterprise Ireland and the 31 Local Enterprise Offices. There has been a tremendous demand for the scheme from enterprises across the country since its expansion and I am pleased that it provides a grant of up to €2,500 to cover up to 90% of the cost for a business going online.
On the 8th of June I announced additional funding of €14.2m for the Scheme bringing the total funding allocation in 2020 to €19.8m. This additional funding will allow LEOs to approve additional vouchers to successful applicants. The Scheme offers skills training, mentoring and financial support of up to €2,500 to help small and micro-businesses to develop their ecommerce capability. New flexibilities to the Scheme were introduced in April including reducing the requirement for co-funding from 50% to 10% and allowing businesses to apply for a second voucher of up to €2,500 where they have successfully utilised their first one. There has been a positive response to these changes and significant uptake of the Scheme.
Continued support for high-potential start-ups and the wider entrepreneurship base remains critically important to underpinning the growth and recovery of Irish enterprise. Through my agency’s support for High Potential Start-Ups, Seed and Venture Capital funding, the Competitive Start Fund and New Frontiers Programme, Enterprise Ireland continues to deliver strong support for entrepreneurs and early stage companies.
Ongoing activities in this area include a call for proposals under the Competitive Start Fund in March of this year, the purpose of which is to accelerate the growth of start-up companies that have the capacity to succeed in global markets. Enterprise Ireland continues to provide equity investment of up to €800,000 on a co-funded basis, to innovation-led high potential start-ups that are developing and commercialising new or substantially improved technologies, products or services. In addition, the Enterprise Ireland is currently engaged in the second call of its Seed and Venture Capital Scheme (2019-2024), targeting funds investing into companies emerging from the third-level research organisations (Spin Outs).
Enterprise Ireland has launched liquidity funding supports for companies who have been impacted by COVID- 19, either through a reduction in turnover/profit or a significant increase in costs. The purpose of this funding is to enable the company to firstly, stabilise, and then, to implement a business sustainment plan, leading to a return to viability and contributing to the recovery of the Irish economy. Support of up to €800,000 can be provided to companies, with different levels of support and funding instruments available, which are targeted at companies at different stages of development and growth (e.g. established companies, start-ups and small enterprises).
I can assure the Deputy that I will continue to work with my colleagues across Government and with all stakeholders, to examine all such appropriate business supports to assist microbusinesses impacted by Covid-19.
