Dáil Éireann Debate, Wednesday - 2 December 2020
33. Deputy Alan Farrell asked the Tánaiste and Minister for Enterprise, Trade and Employment the details of the take-up of the credit guarantee scheme; his Department’s plans for this scheme in 2021; and if he will make a statement on the matter. [40665/20]
View answerThe COVID-19 Credit Guarantee Scheme was launched by Government in September to support those businesses that have been negatively impacted as a result of the outbreak of COVID-19. It is the biggest ever state-backed loan guarantee Scheme in Ireland.
The Scheme provides an 80% State guarantee on lending for terms between 3 months and five and a half years and offers a range of lending products between €10,000 and €1 million including working capital and term loan facilities. Loans up to €250,000 are unsecured. It is available to SMEs, small Mid-Caps and primary producers.
As a result of the high level of the State guarantee, loans are being provided at interest rates lower than the current market rate for similar loans. This low-cost funding along with other grants which are available provides ready access to funding for businesses during this unprecedented time.
As at 20 November, 2,301 applications were received for a value of €135m and 1,140 loans with a value of €54m were approved and drawn (1,382 loans with a value of €66m were approved and drawn up to 26 November).
The Scheme was developed in accordance with the European Commission’s Temporary Framework to take advantage of the relaxation of State Aid rules and required approval from the European Commission. The Scheme was originally scheduled to run until 31 December 2020 in line with the requirements of the Temporary Framework. Following the extension of the terms of the Temporary Framework, Government approved on 24 November, the extension of the COVID-19 Credit Guarantee Scheme to run until 30 June 2021. Thereby making lending facilities available until that date.
The COVID-19 Credit Guarantee Scheme is currently available through Allied Irish Banks, Bank of Ireland and Ulster Bank Ireland. In recognition of the need to make this Scheme as widely available as possible an open-call for new on-lenders has been completed and proposals are being reviewed by the Strategic Banking Corporation of Ireland in respect of potential new lenders. I therefore expect to confirm a number of new lenders will be joining the Scheme in the coming weeks which will increase access to the Scheme. These new lenders will also provide an opportunity for SMEs to avail of a wider range of products in 2021.
I can assure the Deputy Government will continue to work with lenders to increase the visibility and accessibility of the Scheme and to ensure it continues to be promoted to a wide variety of audiences.
