COVID-19: Minister Humphreys announces major expansion of business supports for SMEs
Update from Dept of Business, Enterprise and Innovation 8th April, 2020
€1 billion in liquidity measures available for SMEs
€180m Sustaining Enterprise Fund launched
- Expansion of two SBCI Loan Schemes by €450m to provide an extra €250m for working capital and €200m for longer-term loans, bringing the total allocation to support liquidity in companies affected by the COVID-19 crisis to €650m
- €180m Sustaining Enterprise Fund for firms in the manufacturing and international services sectors
- Extension of supports for online trading to €7.6m
- Expansion of Microfinance Ireland funding by €13m to €20m for COVID-19 loans with interest rates dropped from 7.8% to 4.5%
- Free mentoring, free online training for all businesses
Minister for Business, Enterprise and Innovation, Heather Humphreys TD, today announced a major expansion of supports for all businesses impacted by COVID-19. The package is now worth €1 billion in liquidity measures including a new €180m Sustaining Enterprise Fund for firms in the manufacturing and international services sectors. Free mentoring and online training are also available for all SMEs.
Minister Humphreys said:
This package is a significant step-up in the supports available for all businesses in all sectors at this very difficult time. The measures have been developed to meet the varying needs of Irish enterprise and they are very specifically targeted by size, sector and need.
The Minister continued:
The impact of COVID-19 presents unprecedented difficulties for businesses who have already spent the past three years preparing for the possible consequences of Brexit, but those preparations will stand to us.
I want to reiterate to firms that we will continue to use all available tools at our disposal to support them and keep money flowing through the economy in the difficult months ahead.
Minister for Finance and Public Expenditure and Reform, Paschal Donohoe TD added:
Businesses are experiencing unprecedented difficulty of varying degrees. Many have let staff go, many have retained staff through the Government’s Wage Subsidy Scheme and many are shifting their model to adapt to new circumstances. This package of measures being announced today is designed to offer supports to businesses of all hues, from start-ups to more established companies. It is vital that traders examine what is on offer, apply for schemes and loans, many of which are available at reduced rates, to give themselves the best chance of survival during this difficult time.
Commenting on the Trading Online Voucher Scheme for microenterprises, one of two online trading schemes to receive additional funding today worth a combined €7.6m, Minister for Communications, Climate Action and the Environment, Richard Bruton TD, said:
Trading Online Vouchers are a key government grant to help small and micro enterprises get online. The changes which we are announcing today will help companies, working with their Local Enterprise Office, to get online during this difficult period. This is particularly important when so many small businesses are closed. However, the value of the Trading Online Voucher will stand to your company for years to come, will boost your revenue, and will help you sustain and create jobs into the future.
Minister Humphreys announced that an additional €450m of lending will be provided through the Strategic Banking Corporation of Ireland (SBCI) for SMEs in all sectors including agri-food. This will provide much needed liquidity for firms and bring total SBCI COVID-19 lending capacity up to €650m with loans available through the pillar banks.
- Firstly, the €200m SBCI COVID-19 Working Capital Loan Scheme will increase by €250m to €450m. The Scheme is providing essential liquidity support to businesses with over 1,400 applications received by the SBCI so far. Loans can be between €25,000 and €1.5m at a maximum interest rate of 4%. Loan terms range from one year to three years and loans can be unsecured up to €500,000. Interest-only repayments may be available at the start of the loans.
- Secondly, she announced an additional €200m in COVID-19 funding for the Future Growth Loan Scheme, which will be released in tranches, to provide longer-term loans to COVID-19 impacted businesses. Loan amounts will range €100,000 to a maximum of €3,000,000 per applicant. Loan terms range from 8 to 10 years and loans of up to €500,000 can be unsecured. Interest-only repayments may be available at the start of the loans. The maximum interest rate will be 4.5%.
In addition, the new €2,500 Business Continuity Voucher, available through Local Enterprise Offices, is designed for businesses across every sector that employ up to 50 people. The voucher can be used by companies to develop short-term and long-term strategies to respond to the Covid-19 pandemic.
These measures are in addition to the €150m of funding capacity in the Government’s Credit Guarantee Scheme, which Minister Humphreys encouraged businesses to avail of.
Microenterprises (under 10 employees)
The supports also include an additional €30m for microenterprises through the 31 Local Enterprise Offices (LEOs) comprising additional funding for Microfinance Ireland and Trading Online Grants for those businesses that are in a position to do business online while complying with the public health guidelines.
Firstly, Microfinance Ireland (MFI), which is administering special COVID-19 Loans, will receive an additional €13m in capital support bringing its total lending capacity up to €20m for the coming period.
The Minister also announced a substantial reduction in interest rates on these loans from 7.8% to 4.5%. Loans can be made up to €50,000 with no repayments required and no interest charged in the first six months.
This reduced rate will be available to all micro-enterprises from retail and tourism, to software and transport, with less than 10 employees, where the application is made through the LEOs or Local Development Committees. The new rate for direct applications to MFI will also be reduced to 5.5%.
Secondly, the Minister is increasing support for two trading online initiatives to a total of €7.6m – the first for microenterprises in partnership with the Minister for Communications, Climate Action and Environment, Richard Bruton TD, and the second for retailers with over 10 employees.
This is a very important route for businesses to grow and improve their business in the current crisis, and an important element in their recovery over the longer term. The LEOs have reported an increased interest from companies in accessing Trading Online Vouchers and other supports, for example, for businesses that want to provide takeaway services while their restaurants are closed or provide online courses.
The first online initiative is an expansion of the €2,500 Trading Online Voucher Scheme for microenterprises, in agreement with Minister Bruton. An additional €3.3m is being provided to the scheme bringing the total available to €5.6m. The Ministers also announced new flexibilities with the €2,500 Trading Online Vouchers, allowing businesses to apply for a second voucher of up to €2,500 where they have successfully utilised their first one; and allowing subscriptions to low-cost online retailing platform solutions to quickly establish a retailing presence online.
Businesses with over 10 employees
The second online trading support will be available exclusively for indigenous retail businesses with over 10 employees. The Minister is making a new €2m COVID-19 Retail Online Scheme available through Enterprise Ireland.
Today the Minister also announced a further two new supports to assist companies planning for the future, a Business Financial Planning Grant from Enterprise Ireland to the value of €5,000 to assist companies to develop a Business Sustainment Plan and to engage the services of an approved Financial Consultant, and a new €2,500 LEAN Business Improvement Grant from Enterprise Ireland and IDA Ireland to help companies quickly access expertise to review and optimise operations at a time of crisis and identify the key measures needed to ensure continued viability.
In the manufacturing and international services sectors, which employ over 460,000 people directly and a similar number of indirect employees, Minister Humphreys announced a major new Sustaining Enterprise Fund of up to €180m. This is specifically aimed at all firms with 10 or more employees impacted by COVID-19 that are vulnerable but viable. The Fund will be operated by Enterprise Ireland, providing repayable advances of up to €800,000 as agreed with the EU under new State Aid rules and, together with leveraged lending from the financial markets, should see up to €500m of additional investment in vulnerable but viable firms. These grants will only be repayable if and when a business returns to financial good health.
Government will continue to explore funding potential at EU level including through the European Regional Development Fund.
Finally, access to equity continues to be an important part of the supports for start-up and scaling firms. Therefore, the Minister encouraged early stage firms to apply for a new €750,000 Competitive Start Fund (CSF) now available from Enterprise Ireland. This is in addition to a new €30 million Seed and Venture Capital call for proposals to support early stage and scaling firms through Enterprise Ireland under the Government’s €175m Seed and Venture Capital Initiative.
Commenting on the extension of funding for the SBCI Loan Schemes, Minister for Agriculture, Food and the Marine, Michael Creed TD, concluded:
The expansion of the COVID-19 Scheme, co-funded by my Department, will provide additional working capital support for SMEs in the agri-food sector. Considering the requirement at this time to keep homes here and abroad stocked with high-quality, nutritious food, this assistance is significant. The expansion of the Future Growth Loan Scheme long-term investment support for primary producers and food businesses, which is also co-funded by my Department, is also welcome. I continue to liaise with the banks on liquidity for the primary sector and also want to highlight the availability of working capital assistance to farmers and fishers through Microfinance Ireland’s COVID-19 Business Loan. In times like these we realise the importance of those who produce, process, package and distribute our food and we will continue to keep the finance needs of the whole agri-food sector under review.
Notes to Editor:
The full range of Enterprise Ireland, IDA Ireland, Local Enterprise Office (LEO) and Údarás na Gaeltachta grant and advisory supports continue to be available to eligible firms to help with strategies to access finance, commence or ramp-up online trading activity, reconfigure business models, cut costs, innovate, diversify markets and supply chains and to improve competitiveness.
Local Enterprise Offices (LEOs) €2,500 Trading Online Voucher
The Local Enterprise Offices (LEOs) €2,500 Trading Online Voucher is a Government grant scheme, designed to assist small businesses. It offers financial assistance of up to €2,500 along with training and advice to help your business trade online. The Trading Online Voucher grant scheme is administered by the LEOs on behalf of the Department of Communications, Climate Action and Environment. The grant is available to cover 90% of the costs of an online initiative and recipients can be awarded up to two grants of €2,500 to companies which have successfully implemented an initial grant offer. Participating in this scheme can make the process of trading online much easier for businesses. See: localenterprise.ie/Discover-Business-Supports
COVID-19 Retail Online Scheme
The new COVID-19 Retail Online Scheme will be administered by Enterprise Ireland and will be open to retailers employing over 10 people. A similar Scheme ran on a pilot basis over two calls in 2018 and 2019. The Department of Business, Enterprise and Innovation (DBEI) has proposed this Scheme in response to the COVID-19 crisis and the urgent need for retail companies to achieve a step change in online capability to achieve business continuity, and also to lay foundations for future recovery and growth. The total fund size will be up to €2 million under this competitive call. The objective of the Scheme is to support companies in the indigenous retail sector with a pre-existing online presence to respond to both the domestic and international consumer demand for a competitive online offer. Successful applicants will be awarded funding to support a maximum of 80% of the project costs. Grants ranging from €10,000 to €40,000 will be awarded under the competitive scheme.
Sustaining Enterprise Fund
The new Sustaining Enterprise Fund of up to €180m, which is approved under the DG Competition Temporary Framework, is open to eligible companies that:
- Employ 10 or more full time employees
- Are operating in the manufacturing and internationally traded services sectors
- For SMEs – have applied for funding from a financial institution, including, where appropriate, through the SBCI COVID-19 Working Capital Loan Scheme
- For large companies – have completed a formal application process for funding with an appropriate financial institution.
Businesses qualifying under this EU supported scheme will be offered a Repayable Advance of up to €800,000.
The Sustaining Enterprise Fund will be used to support the implementation of a Business Sustainment Project Plan which must be provided by the company outlining the eventual stabilisation of the business and a return to viability.
The funding is open to all Enterprise Ireland, IDA and Údarás na Gaeltachta clients and other companies employing 10 or more in the manufacturing and internationally traded services sector.
The first port of call for liquidity support will continue to be the SBCI/banks. This new Sustaining Enterprise Fund will be a distinct offer of funding support via a repayable advance which would only be provided where all SBCI/bank options have been fully exhausted.
DG Competition Temporary Framework
The Commission has developed a Temporary Framework to allow member states to put in place short term, targeted responses to the impact of COVID-19 on their economies. The Framework operates under Art 107(3)(b) TFEU which the Commission may declare aid compatible with the internal market “to remedy a serious disturbance in the economy of a Member State”. The Framework allows for aid, in the form of grants or tax or payment advantages of up to €800K per undertaking. Aid may also be granted in the form of loan guarantees and subsidised interest rates.
€5,000 COVID-19 Business Financial Planning Grant
The €5,000 COVID-19 Business Financial Planning Grant will help companies to develop the Business Sustainment Project Plan.
The grant will support companies with 100% funding to engage the services of an approved financial consultant to develop this plan for use when applying for bank or investor funding and when developing their own medium-term financial strategy. Enterprise Ireland will work with these companies on a one-to-one basis to support the implementation of the plan.
€2,500 Lean Business Improvement Grant
The €2,500 Lean Business Improvement Grant is for a Training project of up to three days carried out by an approved external advisor/trainer directly with an eligible company. It is expected that the three days will be spread over a longer period so that there is time for the company to implement changes between sessions.
It is expected that this support would be delivered online in most cases.
The project should focus on the Operations of the company in terms of;
- Crisis response where appropriate
- Sustaining operations including process re-engineering
- Planning for resilience post crisis.
For more information, go to www.enterprise-ireland.com/businessresponse
€750,000 Competitive Start Fund
The new €750,000 Competitive Start Fund is aimed at start-ups and the call for proposals is open for three weeks through Enterprise Ireland closing on 14 April, 2020. This fund is open to early stage companies in all sectors in manufacturing and internationally traded services. The maximum support available is €50,000 for a 10% ordinary equity stake in the start-up company.
Orders may be processed and fulfilled online, but must adhere to the following:
- The administration/processing activities associated with online orders and fulfilment must be done home-based (i.e. home-based working and not office-based);
- The employer must have only a minimum level of staff on site (e.g. in warehouse, depot) for fulfilment; and
- The requirements in relation to physical distancing must be rigorously adhered to in the carrying out of the fulfilment and delivery activities.
These principles apply and must be adhered to, and if not, the activity needs to be curtailed. Online suppliers must be confident in their ability to comply with the public health guidelines announced by Government on Friday, 27 March.