Dáil Éireann Debate, Tuesday - 1 March 2022
142. Deputy Niamh Smyth asked the Tánaiste and Minister for Enterprise, Trade and Employment if he will review a case (details supplied); if he will provide clarity on the matter in relation to the scheme; and if he will make a statement on the matter. [11681/22]
View answerThe COVID-19 Credit Guarantee Scheme (CCGS), launched on the 7 September 2020, allows for up to €2 billion in lending to Irish businesses and is the largest guarantee scheme in the history of the State. The scheme was introduced to provide access to finance to viable but vulnerable businesses negatively impacted by the effects of the COVID-19 pandemic. Its function is to add certainty to businesses that funding is available for working capital and investment purposes. A total of 9,186 loans for a value of €640.8 million have been drawn or approved up to 31 January 2022 under the CCGS and 67,421 jobs have been maintained through the utilization of the scheme up to that date.
The scheme is available to a wide range of sectors with a small number of exceptions which includes the financing of real estate activity. The details provided in relation to this case refer to a loan application for the redevelopment of commercial premises to residential apartments for renting purposes. Such activity is beyond the scope and purpose for which the scheme was developed.
The CCGS was developed as a time-bound loan scheme with a state guarantee to provide loans to meet working capital and liquidity requirements. Loans can also be used for investment purposes as businesses deal with a changing working environment as a consequence of the pandemic. Typically loans for investment purposes relate to purchasing new equipment, a refit of premises or investment in a new product or process. Up to the end of January 2022, loans to meet working capital requirements account for 47% of all loans drawn by value and loans to purchase new equipment, refit premises or invest in a new product or process account for a further 49% of all loans drawn by value.
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. It has been approved by the European Commission on the basis that it will be used by viable businesses for working capital/liquidity requirements and investment purposes to meet the challenge of a changed working environment arising from COVID-19.
While a loan application for purposes of financing real estate is ineligible under the CCGS, it is a matter for the lending institution as to whether it would consider such an application outside of the CCGS.
