Dáil Éireann Debate, Thursday - 24 February 2022
171. Deputy Carol Nolan asked the Tánaiste and Minister for Enterprise, Trade and Employment the total funding provided to the Covid-19 credit guarantee scheme to date; the amount that has been drawn down to date; and if he will make a statement on the matter. [10540/22]
View answerThe COVID-19 Credit Guarantee Scheme which makes up to €2 billion in lending available to SMEs and small mid-caps has been operating since September 2020. Up to the end of January 2022, loans with a value of €640.8 million have been drawn or approved by 9,186 businesses. Loans up to €1 million are available for terms up to 5.5 years. Loans under €250,000 do not require any personal guarantees or collateral. Businesses which have been most impacted by the effects of COVID-19 are drawing the most loans; the wholesale and retail sector, the accommodation and food services sector, the construction sector and the primary agriculture and fisheries sector account for 58% of all loans drawn under the scheme.
Loans under the COVID-19 Credit Guarantee Scheme are financed by providers using their own resources. Schemes operating under the Credit Guarantee Act, which includes the COVID-19 Credit Guarantee Scheme, are based on contingent liability. This means that there is no cost to the State unless a business is unable to pay back the loan for more than 90 days, whereupon the finance provider can call on the guarantee for 80% of the outstanding balance. The amount paid to finance providers in respect of calls under the guarantee was €252,346 at the end of January 2022.
On 19 March 2020, the European Commission adopted a Temporary Framework to enable Member States to use the full flexibility foreseen under State aid rules to support the economy and help overcome the extremely difficult situation triggered by the Coronavirus outbreak. The COVID-19 Credit Guarantee Scheme has been developed in accordance with the European Commission’s State Aid Temporary Framework and has been extended three times since September 2020 on each occasion the European Commission extended the Temporary Framework provisions. The last extension was in December 2021 and makes the scheme available until 30 June 2022. Any extension of the scheme beyond that point is dependent on a further extension of the Temporary Framework by the European Commission. I would therefore encourage businesses to avail of these low-cost loans in the remaining time of the scheme, which can be used for both working capital and investment purposes.
