Dáil Éireann Debate, Tuesday - 31 January 2023
249. Deputy John Paul Phelan asked the Minister for Finance if the Covid-19 loan scheme is being replaced by another similar type of loan, rather than a sudden wind-up of the scheme, given that the scheme has now finished; and if he will make a statement on the matter. [4022/23]
View answer250. Deputy John Paul Phelan asked the Minister for Finance if the Brexit impact loan scheme is being replaced by another similar type of loan, rather than a sudden wind-up of the scheme, given that the scheme has now finished; and if he will make a statement on the matter. [4023/23]
View answerI propose to take Questions Nos. 249 and 250 together.
As both concern credit guarantee schemes operated by the Strategic Banking Co-operation of Ireland (SBCI), I propose to take the Deputy’s questions, PQ 4022/23 and PQ 4023/23, together.
As the Deputy will be aware, the Covid-19 Credit Guarantee Scheme (CCGS), operated by the SBCI in response to the challenges of the pandemic, was the largest loan guarantee scheme in the history of the State. This scheme provided €2 billion of additional credit capacity to SMEs and small mid-caps, including primary producers. The CCGS allowed loans with terms of up to five and a half years; and offered a range of lending products between €10,000 and €1 million. This scheme came to an end on 30 June 2022, due to the expiration of the EU Covid-19 Temporary State Aid Framework which underpinned the scheme.
The Brexit Impact Loan Scheme (BILS) to which the Deputy also refers was launched by the SBCI in October 2021. The BILS was designed to address the impact of Brexit on SMEs and small mid-caps, including primary producers. Its remit was extended to include a Covid Loan Scheme (CLS), which replaced the Covid-19 Credit Guarantee Scheme. The combined Brexit Impact Loan Scheme/Covid Loan Scheme was in place from 4 July to 31 December 2022; with a total lending capacity of €315 million.
While these schemes expired on 1 January 2023, I am pleased to advise the Deputy that the Ukraine Credit Guarantee Scheme (UCGS) was launched – 30 January 2023. This scheme, which unlocks €1.2 billion of low-cost, unsecured working capital, utilises the EU’s State Aid Temporary Crisis Framework to assist SMEs, Small Mid-caps and primary producers affected by the inflationary challenges being posed by the invasion of Ukraine by Russia.
In order to qualify for the scheme, the borrower will have to declare that costs have increased by a minimum of 10% on their 2020 figures and that the loan is being sought specifically as a result of difficulties being experienced due to the Ukraine crisis. Loan facilities ranging from €10,000 to €1 million will be available. Loans of up to €250,000 can be unsecured and can be used for overdrafts, working capital and term loan facilities.
The Deputy may also wish to note that the €500 million Growth and Sustainability Loan Scheme (GSLS) will be launched in Q2 2023. This scheme will be the successor scheme to the very successful Future Growth Loan Scheme (FGLS), which had made available up to €800 million in lending to assist long-term, strategic investment by eligible businesses, including in response to Brexit and Covid-19.
Similar to the FGLS, the GSLS will provide for loans of €25,000 to €3 million for terms of 7 to 10 years. Loans of up to €500,000 can be unsecured. The GSLS will be available to SMEs, including farmers and fishers, with maximum loans to mid-caps limited to €937,500 due to State Aid restrictions.
Under the GSLS, 70% of the lending volume will be provided for investment in business growth and sustainability, while a minimum of 30% of lending volume will be directed to investment in environmental sustainability. The SBCI will deliver the GSLS on behalf of the Minister for Enterprise, Trade and Employment and Minister for Agriculture, Food and the Marine.
