Government measures in key jurisdictions 5th edition - Flipbook - Page 61
Ireland
Adrian Benson | adrian.benson@dilloneustace.i.e. | +353 1 673 1705
Contributor: Dillon Eustace
Loans and
financial
support
Yes. The Covid-19 crisis has prompted the Irish Government to announce a range of
supports for impacted businesses and individuals who are experiencing financial
difficulties during the Covid-19 pandemic. The range of measures introduced by the Irish
Government include the follows.
Has the
government put
in place any new
bank funding
schemes?
•
The Strategic Banking Corporation of Ireland (“SBCI”) Covid-19 Working Capital Loan
Scheme (the “Irish Liquidity Scheme”) – the Irish Liquidity Scheme is designed to support
lending to Irish small and medium enterprises (“SMEs”) only and is not available to larger
firms. Loans under the Irish Liquidity Scheme (the “Loans”) can be provided to
SME’s to fund future working capital requirements in order to mitigate the impact of
the pandemic. The Loans will be available through Allied Irish Banks, p.l.c., Bank of Ireland
and Ulster Bank in amounts of between Ä25,000 and Ä1.5 million per eligible enterprise,
with a maturity of between one and three years. In addition, the Loans will bear a fixed
rate of interest negotiated with the lending bank, subject to a maximum of 4% per annum.
For Loans of up to Ä500,000, no security will be required, however any Loans in excess
of this amount will require collateral to be posted. The SBCI has stated that a three
month interest only option may be available for the initial period of the Loan (depending on
the lender’s assessment of the relevant application). For more information on the Irish
Liquidity Scheme, please see our recent article available here.
•
Future Growth Loan Scheme (“FGLS”) – the FGLS was originally established in June 2019
via the SBCI to support the development of SMEs and businesses in the agri sector. In light
of the pandemic, the FGLS has recently received a boost of Ä500 million in funding
from the Department of Business Enterprise and Innovation which will be released in
tranches to provide long-term loans to businesses impacted by Covid-19. Loan amounts will
range from Ä25,000 to a maximum of Ä3 million per applicant. In addition, loan
terms will range from seven to ten years and loans of up to Ä500,000 can be unsecured. Int
erest-only repayments may be available at the start of the loan and interest rates will be
capped at 4.5%. Close Brothers and KBC Bank are currently accepting loan applications for
the FGLS from businesses meeting SBCI eligibility.
•
The Covid-19 Credit Guarantee Scheme (the “Covid-19 CGS”) – the Irish
Government has repurposed an existing SME Credit Guarantee Scheme which has
been in place in various forms since 2012. Under the Covid-19 CGS, the Irish
Government will guarantee up to Ä2 billion of loans provided by Irish banks to SMEs
whose businesses have been impacted by the pandemic. The Covid-19 CGS will
be available to certain SMEs established and operating in Ireland through a range of
financial providers in the form of a State guarantee to the relevant bank against 80% of
losses. Loans of Ä10,000 up to Ä1 million will be made available for terms of up to fiveand-a-half years. It may also be possible to avail of a three to six month interest only
period. The Covid-19 CGS has now been brought into law through the enactment of
The Credit Guarantee (Amendment) Act 2020. The Covid-19 CGS will be available until
the end of June 2021 on a first-come, first-served basis.
•
Microfinance Ireland Covid-19 Business Loan (the “MFI Business Loan”) – the MFI
Business Loan is a Government initiative to support small businesses through
the current period of uncertainty and to protect job creation or sustainment in Ireland.
The maximum MFI Business Loan available from Microfinance Ireland has been
reduced back down to Ä25,000 from the previously increased amount of Ä50,000 by
the Government for this phase of the fund. It is still available to specifically deal with
exceptional circumstances that micro-enterprises – (sole traders and firms with up to
9 employees) – are facing in order to alleviate the financial pressures arising from
Covid-19. In addition, the terms of the MFI Business Loan include a six-month interest
free period and a repayment moratorium of up to six months, with the loan then
repayable over the remaining 30 months of the 36-month loan period at an interest
rate of between 4.5% and 5.5%.
Government measures in key jurisdictions
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