Dáil Éireann Debate, Thursday - 23 July 2020
71. Deputy Michael Healy-Rae asked the Tánaiste and Minister for Business, Enterprise and Innovation if he will address a matter regarding the credit guarantee scheme (details supplied); and if he will make a statement on the matter. [17734/20]
Amharc ar fhreagraThe new €2 billion COVID-19 Credit Guarantee Scheme announced by Government 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 is a further development of the existing Credit Guarantee Scheme and will initially be available through the current finance providers Allied Irish Banks, Bank of Ireland and Ulster Bank Ireland.
The Scheme will provide an 80% guarantee on lending until the end of this year, for terms of up to 6 years and will offer a range of lending products between €10,000 and €1 million including overdrafts, working capital and term loan facilities.
I can assure the Deputy that the Scheme will permit lenders to refinance and roll-over credit facilities. However, lenders will not be permitted to end existing credit facilities early or prematurely in order to artificially engineer access to the COVID-19 CGS. This will ensure that refinancing can be used by those businesses that need to do so.
The key feature of the Scheme is that it will ensure the provision of liquidity to businesses by leveraging the strong relationship between banks and their customers all over the country.
A distinction must be made between the current Credit Guarantee Scheme whereby banks offer loans at their normal market rates and the new COVID-19 Credit Guarantee Scheme which, due to the increased size of the guarantee as a result of the removal of the portfolio cap, is expected to provide interest rates at below market rates.
Officials from my Department and from the Department of Finance and Department of Agriculture, Food and the Marine along with the Strategic Banking Corporation of Ireland continue to engage with finance providers in relation to the specific terms and conditions of the Scheme.
The legislation in relation to the Scheme is going through the Oireachtas this week, allowing for its swift enactment.
