Dáil Éireann Debate, Wednesday - 25 January 2023
42. Deputy Louise O'Reilly asked the Minister for Enterprise, Trade and Employment the amount of funding that was allocated to the Strategic Banking Corporation of Ireland loan schemes by his Department in 2021, 2022 and to date in 2023, in tabular form; and if he will make a statement on the matter. [3479/23]
Amharc ar fhreagraSME Loan Schemes 2021 and 2022 payments
The following payments were made in 2021, 2022 and to date in 2023 by my Department, the Department of Enterprise, Trade and Employment (DETE) for Strategic Banking Corporation of Ireland (SBCI) SME loan schemes.
Loan Schemes 2021 and 2022 payments
|
Loan Scheme |
2021 |
2022 |
To date 2023 |
|
Future Growth Loan Scheme |
€30,074,810 |
€708,813 |
0 |
|
Brexit Impact Loan Scheme/Covid Loan Scheme |
€8,260,000 |
€8,203,093 |
0 |
|
Growth and Sustainability Loan Scheme |
0 |
€55,000,000 |
0 |
|
Credit Guarantee Scheme/Covid Credit Guarantee Scheme |
€2,172,182 |
€4,677,745 |
0 |
|
Ukraine Credit Guarantee Scheme |
0 |
€20,561 |
0 |
Note:
The funds indicated relate only to funds allocated by DETE to the scheme. The scheme is also underpinned by funds allocated by the Department of Agriculture Food and the Marine and resources of the European Investment Fund. These funds include management fees to the SBCI and the European Investment Bank Group (EIBG) to administer the schemes and a first loss provision to meet the cost of loan defaults to the SBCI and EIBG. If losses on the scheme due to defaulting loans are less than modelled, then there will be a return of a potentially significant portion of the allocated funds to the Exchequer.
Brexit Loan Scheme/Covid-19 Working Capital Scheme
Launched in March 2018, the Brexit Loan Scheme (BLS), made up to €337.5m in lending available to eligible businesses exposed to then current or future impacts arising from the UK’s withdrawal from the EU. Loans available under the Brexit Loan Scheme range from €25,000 to €1.5 million and are for terms of up to three years. Loans were offered at favourable terms, including a maximum interest rate of 4% and no security on loans of up to €500,000.
In the early stages of the pandemic, a proportion of the funding available under the Brexit Loan Scheme was made available to COVID-19-impacted businesses through the COVID-19 Working Capital Scheme (‘the CWCS’). Loans under this scheme are similar to those offered under the Brexit Loan Scheme, but to businesses seeking to innovate, change or adapt in response to the pandemic.
The Brexit Loan Scheme closed in October 2021 and remaining capacity transferred to the Brexit Impact Loan Scheme which took account of the onset of the Covid Pandemic. The final drawdown of lending through the Brexit Loan Scheme was 292 loans to a total value of €57.5m. The Covid-19 Working Capital Scheme closed in July 2021. The final drawdown of lending through this scheme was 948 loans to a total value of €118.5m.
Brexit Impact Loan Scheme/Covid Loan Scheme
In October 2021, the Department of Enterprise, Trade and Employment together with the Department of Agriculture, Food and the Marine launched the Brexit Impact Loan Scheme (BILS), to support SME and small mid-cap businesses (including those in the farming and fishing sectors) that have been affected by the UK’s withdrawal from the EU. Loans under this scheme range from €25,000 to €1.5m and are for terms of up to six years. Loans of up to €500,000 are available unsecured. The Brexit Impact Loan Scheme closed to new applications on 31st December 2022. As of 23rd January 2023, there have been 1,979 loans progressed to sanction under the scheme, to a total value of €273.m
To ensure that an appropriate option for access to finance remained in place for COVID-19 impacted SMEs, the Brexit Impact Loan Scheme (BILS) was widened by Government to allow access to COVID-19 impacted SMEs. The implementation of this change resulted in the launch of a new scheme called the Covid-19 Loan Scheme (CLS) on the 4th of July 2022. The Covid-19 Loan Scheme closed to new applications on 31st December 2022. As of 23rd January 2023, there have been 289 loans progressed to sanction under the scheme, to a total value of €30.3m.
The Future Growth Loan Scheme (FGLS)
The Future Growth Loan Scheme (FGLS) was first launched in June 2019 to provide an option for SMEs and small mid-caps to access appropriate finance for investment purposes. The scheme initially provided for up to €300m in long-term lending, however in July of 2020 it was expanded by €500m to make a total of €800m available through participating financial providers. The scheme is operated by the Strategic Banking Corporation of Ireland and is funded by the Department of Enterprise, Trade and Employment and the Department of Agriculture, Food and the Marine. All the participating lenders are now closed to new applications under the FGLS indicating that they are of the view that they have received sufficient applications to use their full allocation under the scheme. Final use of allocations to participating finance providers may be impacted by decisions on loan approval and customer decisions to draw or not draw the approved loans. As of 23rd January 2023, there have been 3,513 loans progressed to sanction under the scheme, to a total value of €773.9m.
Credit Guarantee Scheme/Covid Credit Guarantee Scheme
The Covid-19 Credit Guarantee Scheme, which operated in accordance with the European Commission’s Temporary Framework on state aid rules in response to the Covid-19 emergency, was launched in September 2020. The Scheme closed to new lending on 30 June 2022 on the expiration without further extension by the European Commission of the Temporary framework. 9,857 loans with a total value for €708.8m were drawn by businesses under the Covid-19 Credit Guarantee Scheme. Schemes operating under the Credit Guarantee Act are based on contingent liability. There is no cost to the State unless loans remain unpaid for more than 90 days and the finance provider calls on the guarantee for 80% of the outstanding balance. Departmental funds were allocated to this scheme to pay claims to finance providers under the State guarantee in respect of defaulted loans and administration costs incurred by the SBCI in operating the scheme and other costs such as legal advice and legal services.
Ukraine Credit Guarantee Scheme (UCGS)
To assist the wider business sector with liquidity and to invest in energy efficiency, a new State-backed Ukraine Credit Guarantee Scheme is being developed based on the European Commission Ukraine Crisis State Aid Framework and will be launched in the coming weeks. This will provide low-cost working capital to SMEs, primary producers and small mid-caps (businesses with fewer than 500 employees) of up to €1 million, on a six-year term, with no collateral required for loans up to €250,000.
Growth and Sustainability Loan Scheme
The ‘Growth and Sustainability Loan Scheme’ (GSLS) is a new long-term loan guarantee scheme that is being jointly developed by the Department of Enterprise, Trade and Employment (DETE) and the Department of Agriculture Food and the Marine (DAFM) in partnership with the SBCI and the European Investment Bank Group (EIBG). It is planned that the GSLS will be launched in the market in the first half of 2023.
When implemented, the GSLS will make up to €500 million in longer-term lending available to SMEs, including farmers and fishers and small mid-caps. Up to 70% of lending will be for strategic investments with a view to increasing productivity and competitiveness and thus underpinning future business sustainability and growth. The GSLS will also target a minimum of 30% of the lending volume towards Environmental Sustainability purposes.
