Overview of Government Support Schemes Announced on 2nd May 2020

On May 2nd 2020, the Irish Government announced a €6.5 billion package of further supports to help businesses reopen as COVID-19 restrictions are slowly lifted. The schemes announced included both new initiatives and extensions to existing ones. The measures are outlined below and in detail on our other webpages. The measures are in addition to the schemes previously announced on the 8th April 2020 which are explained here.

The ISIF Pandemic Stabilisation and Recovery Fund will provide the following:

  • €2billion is available to invest in medium and large scale businesses employing more than 250 employees or revenues in excess of €50m
  • Consideration will also be given to enterprises below these threshold levels where the enterprise is of substantial scale and significant importance at a regional or national level
  • Enterprises must be able to demonstrate their business was commercially viable prior to the COVID-19 pandemic and that they can return to viability and contribute to the Irish economy
  • There will be flexibility to invest across the capital structure (debt, equity, hybrid instruments etc.) with ISIF seeking an appropriate risk-adjusted return
  • ISIF is willing to participate alongside new investors while also expecting meaningful participation from existing shareholders where capital is available
  • The loan has capacity for long term investment horizon and the fund is designed to complement other Government policy initiatives

Available to:

  • Medium and large enterprises employing more than 250 employees or with re venues in excess of €50million (smaller enterprises will also be considered if deemed appropriate)
  • The scheme is open to organisations operating across all sectors and the qualifying business does not need to align with ISIF’s existing priority sectors (E.G. regional development, housing, climate change etc.)

The COVID-19 Credit Guarantee Scheme is a further development to the existing SBCI Credit Guarantee Scheme and will provide a €2bn credit guarantee scheme as follows:

  • Loans under this Scheme range from €10,000 to €1 million and are available per qualifying business to provide emergency liquidity
  • The scheme will provide an 80% guarantee on lending to SMEs until the end of 2020 for terms between three months and six years
  • It will be available to all SME sectors including primary producers
  • Interest rates will be agreed at or below current market rates
  • This Scheme is an extension to the existing SBCI Credit Guarantee Scheme already available from AIB, BOI and Ulster Bank and it will be possible for other lenders to access the Scheme
  • The funds can be used by qualifying companies to refinance existing debt, which is precluded under the other supports available

Available to:

Any viable micro, small and medium sized business and small MidCaps with less than 500 employees; and which have the following:

  • Turnover of €50m or less (or €43m or less on the balance sheet);
  • Independence and autonomy (i.e. not part of a wider group);
  • Less than 25% of their capital held by public bodies; and
  • Established and operating in the Republic of Ireland

The Government’s Restart Fund will include the following:

  • €550m fund to be made available for micro and small enterprises
  • The purpose of this fund is to provide grants to assist these businesses in reconnecting with the market, their employees and customers
  • Details of this Scheme are in the process of being finalised by the Government
  • It is intended that the Fund will provide grants through a system of rebates / waivers of commercial rates payments from 2019
  • Companies are expected to receive a total amount equivalent to no more than their 2019 rates bill with a cap per business of €25,000 and minimum of €4,000
  • Further payments may be available to firms that have received support in the past. The pool of eligible businesses will be widened to include previously excluded sectors such as B&Bs and charities

Available to:

Small and medium size enterprises that have the following:

  • 250 employees or less;
  • Turnover of less than €100,000 per employee; and
  • Reduced turnover by 25% as a result of COVID-19

The Commercial Rates Waiver includes the following:

  • Six- month commercial rate waiver available per qualifying business
  • This waiver is an extension to the three month waiver announced on 2nd May to defer rate payments for businesses most affected by COVID-19 (hospitality, retail, leisure and childcare sectors)
  • This waiver is available for all businesses who have been forced to close due to public health requirements
  • The qualifying period is a six- month period beginning 27th March
  • The Government will continue to actively engage with business owners and representative bodies impacted by COVID-19
  • It is estimated that this waiver will reduce Local Authority income by €600m and that the Exchequer will bear the cost

Available to:

  • Any business that was forced to close due to public health requirements

The Revenue Warehousing of Tax Forbearance includes the following:

  • Warehousing of tax liabilities including VAT and Payroll tax debt accrued by companies during the COVID-19 crisis
  • The warehoused tax liability will be interest free
  • The warehousing period will be twelve months from the date on which trading recommences i.e. post lifting of sectoral restrictions
  • Prior to the expiry of the warehousing period, the business will be expected to engage with Revenue to agree an exit strategy better suited to the specific business needs and the need for continued viability
  • Post the 12-month warehousing period, businesses will qualify for a considerably reduced rate of interest of 3% (down from 10%) on outstanding debts on agreement of such arrangements, to be set out in legislation
  • In order to continue qualifying for these arrangements, businesses must remain compliant with all of their return filing and tax payment obligation in respect of periods that postdate the periods covered by the warehouse debt

Available to:

  • Details to be finalised, but likely to be any business in every sector of the economy who has been negatively impacted by COVID-19
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