Dáil Éireann Debate, Wednesday - 20 May 2020
642. Deputy Michael McGrath asked the Minister for Business, Enterprise and Innovation the changes made to the credit guarantee scheme as a result of Covid-19; the number of loans that have been advanced under the scheme since the changes were made; the value of loans advanced under the scheme since the changes were made; and if she will make a statement on the matter. [6816/20]
Amharc ar fhreagraThe Government announced 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, on the 2nd May.
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. It will also have interest rates below current market rates. 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 and as it awaiting legislation, loans are not yet being advanced under the revised scheme.
There are a number of liquidity supports for COVID 19 impacted businesses available right now, including the existing Credit Guarantee Scheme supporting loans up to €1 million for periods of up to 7 years. The Scheme is designed to support a range of debt products appropriate to the borrowing needs of SMEs. Term loans and other products such as stocking facilities, performance bonds are covered by the Scheme. It is possible for SMEs to avail of between a three to six-month interest-only payment period subject to the lender’s assessment of the application.
An application to access the current Credit Guarantee Scheme can be made through one of the participating finance providers which are currently Allied Irish Bank, Bank of Ireland and Ulster Bank Ireland. The Scheme is operated by SBCI, the Department plays no role in the application or decision-making process, which, is fully delegated to the participating lenders. The Credit Guarantee Scheme facilitates guarantees up to a maximum of €150 million in any one year.
When the COVID-19 crisis began, I made changes to the Credit Guarantee Scheme to make it easier for businesses to access – including removing the requirement that businesses be refused a loan by the banks before they could access the scheme.
I can assure the Deputy that I continue to work with my colleagues across Government to examine supports to assist businesses impacted by Covid-19.
