Dáil Éireann Debate, Wednesday - 20 May 2020
634. Deputy Michael McGrath asked the Minister for Business, Enterprise and Innovation if the exclusions in the current credit guarantee scheme will be removed from the new scheme announced on 2 May 2020; if the new scheme will avail of the relaxed state aid rules; if state aid approval has been sought for the new scheme; and if she will make a statement on the matter. [6676/20]
Amharc ar fhreagraSince the Covid-19 crisis began, Government has worked to put in place a suite of supports to ensure appropriate financing is available to businesses that have been impacted by the outbreak or by the restrictions that have been put in place to mitigate the spread of the disease.
As announced on Saturday, May 2, Government has agreed a new €2 billion COVID-19 Credit Guarantee Scheme as a further development of the existing Credit Guarantee Scheme already available from AIB, BOI and Ulster Bank. This Scheme forms a major component of the Government’s strategy to aid SMEs in these difficult times by providing critical support to ensure businesses are facilitated in having access to credit facilities to assist a return to a more regular trading environment. It will provide an 80% guarantee on lending to SMEs until the end of this year, for terms between 3 months and 6 years. The guarantee will be able to be used for a wide range of lending products between €10,000 and €1 million that have a maximum term of 6 years or less.
The Scheme will be available to all SME sectors, including primary producers in agriculture, horticulture and fisheries. These sectors are excluded from the current Credit Guarantee Scheme under State aid rules. They will be included under the Covid-19 Credit Guarantee Scheme arising from the amended State Aid rules under the the European Commission’s State Aid Temporary Framework. The Scheme will also be available to small Mid-Caps (up to 499 employees) which are also excluded from the current Scheme.
The new Scheme will include re-financing arrangements, the terms of these arrangement are currently under discussion with the financial institutions.
My officials are currently engaged with the European Commission in seeking approval for the Covid-19 Credit Guarantee Scheme and ensuring the Scheme's adherence to the rules set out in their Temporary Framework.
The implementation of this Scheme will require primary legislation, the drafting of which has been approved by Government, and my officials are already working with the Office of the Parliamentary Counsel on this drafting work.
