Covid-19 has brought unprecedented challenges for all of us in society. The Government recognises the importance of the SME sector that accounts for over 99 percent of businesses and nearly 70 per cent of employment in the Irish economy. That is why a key focus of Government has been to support businesses as they work through the challenges facing them.
Government has acted decisively to counteract the worst effects of the pandemic by providing supports with a total value of €24½ billion to-date–mostly in the form of labour supports, investment in the health service and through direct supports to businesses. Some €16 billion of this is accounted for by increases in expenditure in 2020; this is over five times the increase that was planned in the original estimates for 2020 published last year.
These actions have enabled Government to introduce a range of measures to help businesses. These have included the Employee Wage Subsidy Scheme (EWSS), the ‘warehousing’ of certain COVID-19 related tax debts, competitively priced investment and working capital loan schemes and direct business supports in the form of business grants.
Furthermore, the Tánaiste, the Minister for Public Expenditure, the Minister for Agriculture and Food and I launched a €2bn Covid-19 Credit Guarantee Scheme on 7 September 2020. This scheme will ensure that SMEs, primary producers and small Mid-Caps can access liquidity to keep their businesses operating, as our economy continues to re-open and more and more people get back to work.
In relation to those businesses refused credit, the Credit Review https://www.creditreview.ie was established to assist those SMEs and farm borrowers that have had credit applications of up to €3 million refused or indeed an existing credit facility withdrawn or amended by the participating bank. SMEs can apply to Credit Review after exhausting the internal appeals process in the participating institution, which are currently AIB, BOI, Ulster Bank and Permanent TSB.
In addition, the Central Bank of Ireland has a number of measures in place to specifically protect and support the interests of businesses.
Banks must follow regulations set out in the Central Bank’s Central Bank (Supervision and Enforcement) Act 2013 (Section 48) (Lending to Small and Medium-sized Enterprises) Regulations 2015 (the SME Regulations).
The SME Regulations https://centralbank.ie/news/article/regulations-for-firms-lending-to-smes-from-2016 set out the required treatment of SMEs by regulated entities in relation to various aspects of business lending. This includes detailed provisions around the credit application process, requirements regarding security or collateral, credit refusals and withdrawals, handling complaints, managing arrears and having in place policies for engaging with SMEs in financial difficulty.
