Further supports for Irish businesses affected by COVID-19Wednesday, 06 May 2020
Some welcome additional measures were announced by the Irish government on Saturday, 2 May to support small, medium and larger businesses that have been negatively impacted by the COVID-19 crisis (in reality the vast bulk of Irish business).
The key additional supports are:
- A €2 billion Pandemic Stabilisation and Recovery Fund within the Ireland Strategic Investment Fund (“ISIF”) which will make capital available to medium and large enterprises. ISIF’s general approach is to leverage its key strengths to support medium and large scale businesses in Ireland to underpin the recovery and ensure an appropriate return for the State. This is a significant support targeted at larger businesses which in this case are those enterprises which employ more than 250 people or have an annual turnover in excess of €50 million. Investments in enterprises below those levels can be considered on a case-by case-basis. These investments will be made on a commercial basis and the enterprises that are supported must be able to show that their business was commercially viable prior to the pandemic and that they can return to viability and contribute to the Irish economy. ISIF would regard this as patient capital and existing shareholders who have capital available will also be expected to contribute. ISIF will consider support in all sectors not just those that align with ISIF’s existing priority sectors and themes.
- Any tax liabilities for businesses affected will now be 'warehoused’ for a period of 12 months after recommencement of trading during which there will be no late payment interest applied or enforcement action taken, but all tax returns must be filed up to date as due.
- The COVID-19 Credit Guarantee Scheme has been extended, it will now be a €2 billion scheme and will support lending to SMEs for terms ranging from three months to six years at below market interest rates. There will be a partial government guarantee on the loans to 80%. SMEs are those with fewer than 250 employees and turnover of €50 million or less (or €43 million or less balance sheet total) and not part of a wider group. The scheme can be availed of through participating lenders being AIB, Bank of Ireland and Ulster Bank.
- Businesses which have had to close their premises will be able to avail of a three month commercial rates waiver. Central government will make up the shortfall to local authorities.
- There will be a €10,000 restart grant for micro and small businesses which will be paid by way of a rates/waiver rebate from 2019.
Certain of these supports such as the deferral of rates and tax deferrals do require legislation to be passed which is not possible until a new government is formed.
These supports are in addition to the range of supports for businesses and their employees previously announced including:
- The €450 million Strategic Banking Corporation Ireland COVID-19 working capital scheme
- The €200 million COVID-19 Funding for Future Growth Loan Scheme also administered by SBCI
- Business loans for micro enterprises administered through Microfinance Ireland
- The €180 million sustaining enterprise fund administered by Enterprise Ireland (available to enterprises employing 10 or more full time employees which are operating in the manufacturing and internationally traded services sectors). This will offer a repayable advance of up to €800,000.
- The Temporary Wage Subsidy Scheme, pandemic unemployment payment and short time work support.
The full range of supports can be viewed by clicking here.
The additional measures announced on Saturday, 2 May are to be welcomed and will go a long way towards the successful re-opening and continued viability of the many otherwise successful businesses impacted by the economic effects of the pandemic.
Please note that the content of this summary does not amount to professional advice. Legal and tax advice should be sought in respect of specific queries. The COVID-19 situation is evolving rapidly and this update is provided on the basis of information available as at 6 May 2020.