COVID-19: Financial Aids and Supports for SMEs

A number of governing bodies and financial institutions have introduced grants, measures and funds to tackle this crisis. These supports will enable businesses to continue running and survive the economic downturn now and when normal service resumes.

Given the increased vulnerability of small to medium businesses, or SMEs*, they have been focus for support being made available. We also look at how financial institutions are assisting businesses who cannot meet payments. 

Disclaimer: Occupop is not a governing body or financial institution, this information has been collated from gov.ie, revenue.ie and various financial experts as at date of publication and is subject to change. Any information provided here is intended to inform rather than advise.

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What financial aids are available to help you run your business?

The main schemes available are:

• An increase in the maximum loan available from MicroFinance Ireland (MFI) from €25,000 up to €50,000, for businesses with fewer than 10 staff and less than €2 million in turnover. The terms include a six months interest free and repayment free moratorium, with the loan to then be repaid over the remaining 30 months of the 36-month loan period. Loans are available at an interest rate of between 6.8% and 7.8%. MicroFinance Ireland full criteria and FAQs on this loan can be found here.
   
• SBCI COVID-19 Working Capital Scheme Loan is available to SMEs. This loan offers €25,000 up to €1.5 million. No security required for loans of up to €500,000. Interest is limited to a maximum of 4%. To be eligible for this scheme, your business must demonstrate a reduction in turnover/profitability by a minimum of 15% due to the impact of COVID-19, and meet one innovation criterion as per EIF standard conditions. SBCI Working Capital Scheme loans criteria and FAQs can be found here. 

• The Credit Guarantee Scheme supports loans up to €1 million for periods of up to 7 years for SMEs. Applications can be made to AIB, Bank of Ireland and Ulster Bank. Credit Guarantee Scheme support loans FAQs can be found here.

• A €200m Package for Enterprise Supports including a Rescue and Restructuring Scheme is available through Enterprise Ireland for vulnerable but viable firms that need to restructure or transform their business.

• A full scope of existing and newly created grant supports are available from the following: 

• Enterprise Ireland
• IDA Ireland
• Local Enterprise Office
• Údarás na Gaeltachta

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• The Department of Employment Affairs and Social Protection (DEASP) and DBEI will provide a joint first responder support service through the Intreo Offices, Enterprise Ireland and IDA Ireland in each region to provide tailored supports to impacted firms, with the objective of avoiding mass lay-offs and buying firm's time to work through short-term disruption.

• Local Enterprise Offices in every county will be providing vouchers for  third party consultancy costs from €2,500 up to €10,000 (with 50:50 match funding) to support business continuity preparedness, innovation and productivity. This is designed for businesses that employ up to 50 people and can be used by companies and sole traders to develop short-term and long-term strategies to respond to the COVID-19 pandemic. Apply for this voucher here.

• Outside of the specific Coronavirus, the Brexit Loan Scheme is also now available to SMEs and provides an 80% Government Guarantee on loans up to €1.5m for a 3 year term with a fixed interest rate of 4% for Brexit impacted (15% of your business either directly or indirectly exposed to the UK or NI) businesses. This loan cannot be used for refinancing. Businesses must satisfy one Brexit criteria e.g. export products, services or raw materials to the UK (including Northern Ireland) equate to at least 15% of business turnover, and one innovation criteria e.g. you will have registered at least one technology right in the last 24 months and the purpose of the loan is to enable use of this technology right. Full details and an eligibility application form are available here.

*SMEs are defined as: Viable micro, small and medium sized enterprises (SMEs). SMEs are defined as enterprises that:

• Have fewer than 250 employees
• Have a turnover of €50 million or less (or €43 million or less on their balance sheet)
• Are independent and autonomous i.e. not part of a wider group of enterprises
• Have less than 25% of their capital held by public bodies
• Is established and operating in the Republic of Ireland
• A Small Mid-Cap is an enterprise that is not an SME but has fewer than 500 employees

Source: https://dbei.gov.ie/

What if you can’t pay bank loans, mortgage or rent? 

The main Irish banks and other lending institutions have agreed to a loan repayments deferral scheme. This will allow businesses to apply for a 3-month deferral of loan repayments. Banks and other lending institutions, at their own discretion, are creating applications for businesses to apply for these bank loan deferrals. Contact your appropriate institution directly to apply.

Further to this, banks, non-bank mortgage lenders and credit servicing firms have agreed to increased flexibility over payments, including the possibility of a payment break of up to 3 months for customers struggling to pay mortgages due to the current crisis. This includes buy-to-let customers whose tenants are being adversely affected by COVID-19, allowing landlords to temporarily stop rental payment requirements. Note, this will not affect credit ratings. 

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We will be posting up regular updates and information for businesses, employees and the self-employed in regard to the Coronavirus. Follow us on LinkedIn to ensure you don't miss out on these updates.

For advice on everything financial and COVID-19 related for businesses, we recommend using the TaxAssist COVID-19 content hub. TaxAssist are a full service accountancy service that focus on helping SMEs.