Government measures in key jurisdictions 3rd edition final - Flipbook - Page 61
Adrian Benson | adrian.benson@dilloneustace.i.e. | +353 1 6731705
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 include the follows.
•
(the “
”) 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 €25,000 and €1.5 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 €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 a three month
interest-only option may be available for the initial period of the Loan
For more information on the Irish Liquidity Scheme,
please see our recent article available here.
(“
”) – 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 €200 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 €100,000 to a
maximum of €3 million per applicant. In addition, loan terms will range from eight to ten years and loans of up
to €500,000 can be unsecured. Interest-only repayments may be available at the start of the loan and
interest rates will be capped at 4.5%.
(the “
”) – 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.
•
(the “
”) – 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 €2 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
and
a State guarantee
to the relevant bank against 80% of losses. Loans of €10,000 up to €1 million will be made
available for terms of between three months and six years. It may also be possible to avail of a
three to six month interest only period. The Covid-19 CGS is conditional on new legislation
being passed which cannot be done until a new government is formed following the general
election held in February. Therefore, it is expected that the Covid-19 CGS will not be available
until later in June (at the earliest).
Government measures in key jurisdictions
61