Dáil Éireann Debate, Tuesday - 16 June 2020
460. Deputy Martin Heydon asked the Minister for Business, Enterprise and Innovation her plans for further supports for small and medium-sized businesses facing challenges in the months ahead; and if she will make a statement on the matter. [11514/20]
View answerIn 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, 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 examine additional measures needed for all enterprises, SMEs and micro-enterprises as they work through the challenges facing them, including through any additional mechanisms allowable through the EU’s state aid framework.
In terms of forthcoming schemes for SMEs, I would highlight in particular that the Government has agreed a new €2 billion COVID-19 Credit Guarantee Scheme as a further development of the existing Credit Guarantee Scheme already available from AIB, BOI and Ulster Bank. 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 been approved by Government, and my officials are working with the Office of the Parliamentary counsel on this drafting work.
Work is also under way to extend existing schemes in place to support access to finance for businesses to ensure that they can continue to offer support to businesses as they look towards reopening. These include the Covid-19 Working Capital Scheme and the Future Growth Loan Scheme.
The Covid-19 Working Capital Scheme makes lending available to eligible businesses that have been negatively impacted by issues arising from the outbreak of Covid-19 in Ireland as they seek to innovate, change or adapt in response to this disruption. Loans under this scheme are for up to three years and range from €25,000 up to €1.5 million (first €500,000 unsecured) with a maximum interest rate of 4%.
Future Growth Loan Scheme provides long term loans of 8-10 years to businesses at low interest rates. There has been significant demand for the scheme and the initial funding has been almost fully subscribed. This expansion will further support the needs of SMEs, including primary producers, impacted by COVID-19. This new funding will be released in tranches. The long-term nature of these loans is particularly important for businesses as they plan for recovery. Work is under way to deliver this funding as quickly as possible.
My Department is encouraging any affected business to take advantage of the LEO COVID-19 supports. The situation is still developing from day to day and the Government continues to respond to these developments in an effort to protect and support Irish businesses. The LEOs will continue to work with existing applicants and recipients of Business Continuity Vouchers (BCV) 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.
InterTradeIreland launched two new business supports, these are currently being targeted at companies who are already on one of their programs. E-merge enables companies to engage consultancy support & advice (to the value of £2,500/€2,800) 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.
As the Deputy is aware the COVID-19 pandemic has fundamentally changed the Irish and global economy. COVID-19 has emerged as a sudden and profound disruptor. Both globally and nationally, it is unclear how deep the impact will be or how long it will last. The COVID-19 pandemic is presenting significant challenges for SMEs, the impact of which varies by sector and region. Following a strong 2019 performance, companies focused on internationalisation and growth at the start of 2020 are facing new, and unplanned for, challenges.
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 Ireland’s Sustaining Enterprise Scheme supporting undertakings affected by the economic repercussions of the COVID-19 outbreak under the Temporary Framework for State Aid Measure to Support the Economy in the Current COVID-19 Outbreak.
- 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
- Sustaining Enterprise Fund: 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.
In addition to the immediate COVID-19 response, Enterprise Ireland continues to strongly focus on supporting companies to invest in innovation, competitiveness and market diversification. These activities are critical to underpinning the long-term development and growth of Irish enterprise. As part of this, the agency:
- Is utilising its client engagement model to work with client companies on a one-to-one basis to establish company need and will tailor a support package utilising the full suite of supports offered by the agency.
- Is delivering non-financial supports, such as the market intelligence, available via the agency’s global network of 40 offices. This provides valuable insight for companies on markets which will be vital in informing a company’s internationalisation strategy.
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.
The Restart Grant provides direct grant aid to micro and small businesses. The grant is a contribution towards the cost of re-opening or keeping a business operational and re-connecting with employees and customers. Funding in respect to the Restart Grant is provided by my Department and is administered by the 31 Local Authorities.
Enterprise Ireland, working with my Department will continue to monitor the needs of sectors and companies as the situation evolves and provide new supports to meet changing company needs, as required. Indigenous Irish companies are the backbone of the economy and the agency is committed to helping these companies sustain their businesses.
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 and will continue to keep the supports provided for enterprise under review.
