Coronavirus - Government measures in key jurisdictions - Flipbook - Page 45
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Ireland
Adrian Benson | adrian.benson@dilloneustace.i.e. | +353 1 673 1705
Contributor: Dillon Eustace
Loans and
financial
support
Has the
government put
in place any new
bank funding
schemes?
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 are as follows:
•
The Strategic Banking Corporation of Ireland 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 COVID-19 pandemic. The Loans will be available through Allied
Irish Banks, p.l.c., Bank of Ireland and Ulster Bank in amounts of between €25,000
and €1.5m 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 €500,000, no security
will be required, however any Loans in excess of this amount will require collateral to
be posted. The SBCI has stated that an interest-only option may be available for the
initial period of the Loan. However, it is not clear under what circumstances and for
how long repayments may be deferred. For more information on the Irish Liquidity
Scheme, please see our recent article available here,
•
The Credit Guarantee Scheme (the “CGS”): the CGS was originally launched in
2012, however in response to the COVID-19 pandemic, the CGS was amended in
April 2020 to assist SMEs whose businesses have been impacted by the virus.
The CGS is directed at commercially feasible SMEs which, under normal lending
criteria, are unable to obtain new or additional facilities from their bank due to
insufficient collateral or because they are impacted by COVID-19. In addition,
the CGS is targeted at commercially viable SMEs which due to their sectors,
markets or business models are perceived as a higher risk under current credit
risk evaluation procedure. The CGS will be available to COVID-19 impacted firms
through the pillar banks and provides lenders with a State guarantee, covering
eligible credit facilities for 80% of the facility value, over a maximum seven-year
period. Essentially, the CGS is an additional form of security provided to the
lending bank by the Irish Government on behalf of the relevant borrower,
•
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
increased from €25,000 to €50,000 as an immediate measure 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%, and
•
Enterprise Ireland Supports: the Department of Business, Enterprise and
Innovation has implemented a €200m package for Enterprise Supports including
a Rescue and Restructuring Scheme available through Enterprise Ireland for
vulnerable but viable firms that need to restructure or transform their business.
Government measures in key jurisdictions
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