The stimulus package announced today provides a number of supports for businesses with regard to funding and grants. Key measures include:
1. Business Restart Grant
The Business Restart Grant, which can be applied for through Local Authorities, has been increased and expanded, with a further €300m in funding available, to an extended range of businesses and rateable sports clubs, who may now seek a grant in the region of €4,000 to €25,000. While these are relatively small amounts, the funding will allow many smaller, struggling businesses to address the additional costs they may be facing due to Covid, providing assistance with the defraying of ongoing fixed costs, replenishing stock and for measures needed to ensure employee and customer safety. We would encourage all eligible businesses, including those who applied previously to assess your current position and apply as appropriate for either a new or extended grant.
2. Covid-19 Credit Guarantee Scheme
Replacing the pre pandemic guarantee scheme, worth €150m, the new scheme will be worth €2bn and see the State guarantee 80% of a loans bank value (for loans between €10k and €1m) for up to 6 years. The scheme will help companies get access to funds from Irish banks. Earlier commentary on the scheme noted that the interest rate is the standard SME interest rate plus a premium of around 0.5%. As legislation is yet to be enacted, we believe clarity on the interest rate should be provided.
3. The Future Growth Loan Scheme
This scheme is being expanded from €200 million to €500 million, with the support of the EIB, with businesses up to 499 employees eligible for longer-term loans at competitive rates. Loans under the scheme will range from €25,000 to €3 million per eligible applicant, with loans of up €500,000 unsecured, for a period of up to 10 years, providing longer term financing where an alternative is not available. However, a degree of caution is advised with such loans as one may simply be replacing liquidity issues, for debt issues.
4. Additional resources for Micro-Finance Ireland and the Local Enterprise Offices
A package of liquidity and enterprise investment measures worth €55 million will be put in place, with measures to reduce interest rates on lending for micro and small businesses, including grants equivalent to 0% interest on the first year of SBCI and MFI loans.