Dáil Éireann Debate, Tuesday - 16 June 2020
448. Deputy John Lahart asked the Minister for Business, Enterprise and Innovation the reason Ireland has had business schemes approved that take the form of repayable advances and has not sought grant aided schemes to date from the EU in view of the fact businesses are struggling. [11346/20]
View answerThe Deputy will be aware that the EU's temporary state aid framework allows EU member states to put in place short term, targeted responses to the impact of COVID-19 on their economies. The nature of the business supports under this framework is a matter for individual member states and is dependent upon the different size of economies and targeted sectors of the economies.
The €180 million Sustaining Enterprise Fund which Ireland successfully negotiated with the EU Commission under the temporary framework, is just one part of the wider €12bn package of supports for firms of all sizes, which includes the wage subsidy scheme, the pandemic unemployment payment for the self-employed, restart grants, low-cost loans, write-off of commercial rates and deferred tax liabilities, all of which will help to improve cashflow amongst SMEs.
The nature of the business supports under the temporary framework is a matter for individual member states and is dependent upon the different size of economies and targeted sectors of the economies.
There is a limited amount of resources available and a broad range of businesses with different needs for support. I am looking to achieve the widest reach within the available Exchequer funding as urgently and as quickly as possible. The loan guarantee scheme structures, for example, are a key response to the liquidity crisis, as they allow Ireland to leverage Exchequer monies to provide much larger funds to businesses, in particular where it is feasible to access counter guarantees through the European Investment Bank. Supports to businesses, including grants, provided through the Exchequer funding should support viable business across all sectors and across the variety of needs.
My Department, working with its agencies, are continually reviewing the situation and I am informed that Enterprise Ireland is working with SMEs client companies to support the stabilisation of their business so that they can undertake a developmental programme focused on recovery and growth. To support companies the agency has:
- Developed and launched a suite of new funding supports utilising the additional flexibility permitted under the Sustaining Enterprise Fund.
- Set up a Business Response Hub to provide information to companies on what supports are available to assist with their specific needs. To date the agency has supported many companies through the Hub.
As a first step, SMEs need to stabilise their business with key elements including business planning and accessing liquidity. Once a company has a financial and business continuity plan, Enterprise Ireland can provide funding 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 stabilise and implement a business sustainment plan, leading to a return to viability and contributing to the recovery of the Irish economy. New supports introduced to support this include:
Planning Supports
- Lean Business Continuity Support: This €2.5k grant supports companies to access training or advisory services related to crisis management, sustaining operations, moving to e-business/online and planning for resilience post crisis. Reflecting the practical and immediate nature of this support, company interest and demand has been strong.
- COVID-19 Business Financial Planning Grant: This grant of up to €5k provides 100 per cent funding for companies to access a financial consultant to prepare a financial plan to assist companies:
- understand their immediate financial position, secure the finance required to survive and provide a framework to sustain the business; and
- ensure they have a framework to identify and manage costs and gaps in funding.
- This is a critical support for a company to strengthen their position to identify funding needs and access required funding to implement their business plan.
- Liquidity Support
- The agency’s liquidity and medium-term financial supports are being delivered under the Sustaining Enterprise Fund. 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).
- The agency is actively working with companies to prepare applications for funding under the Sustaining Enterprise Fund.
The €250m Restart Grant which is also an approved Scheme under the EU’s Temporary Framework for State aid, in fact gives direct non-repayable grant aid to micro and small businesses to help them with the costs associated with reopening and re-employing workers following COVID-19 closures. The grants are equivalent to the rates bill of the business in 2019, with a minimum payment of €2,000 and a maximum payment of €10,000.
Indigenous Irish companies are the backbone of the economy and I can assure the Deputy that the officials in my Department are working with all our agencies to monitor the needs of sectors and companies and provide new supports to meet changing company needs, as required.
For further information and regular updates as they develop are available on the Department’s website at: https://dbei.gov.ie/en/What-We-Do/Supports-for-SMEs/COVID-19-supports/.
