As many Irish businesses are facing into uncertain futures, new supports are being announced to help. That’s good news for SMEs who have worked hard to build their businesses, and who are eager to get through the period of the pandemic, and remain viable into the future.
With new restrictions rolling out into the autumn and potentially beyond, real help and assistance are what Irish businesses need to back them through what is one of the most challenging periods many of them are likely to ever experience.
One point of genuine help for SMEs is the Covid-19 Credit Guarantee Scheme, which is attractive to business owners for several reasons: for starters, it offers low-cost loans at a much lower rate than they would normally get to avail of. Application is also simple, and the Scheme is backed by the government, which is another point of reassurance.
“It is for businesses that were viable before Covid-19 and is aimed at giving them an opportunity to trade their way through it,” confirms Michael Lauhoff, director of business banking with Bank of Ireland.
Get help and apply
So what exactly is the scheme and who can apply? The Covid-19 Credit Guarantee Scheme is a €2 billion fund designed to support lending to SMEs for terms ranging from three months to five years and six months, at below market interest rates.
Loans can be used to fund working capital including liquidity needs, investment in innovation, or to refinance debt incurred as a result of Covid-19 – this can include pandemic-related expenses that were initially funded through short term or temporary facilities such as overdrafts.
“With some of the other support measures now coming to an end, the Credit Guarantee Scheme is coming at a perfect time to help businesses recover from Covid-19,” Lauhoff says.
Eligibility is straightforward. A business must have been viable and not in financial difficulty on 31 December 2019 and be capable of returning to viability in future. In addition, a business will need to declare that its actual or projected turnover or profitability has been reduced by 15 per cent as a result of Covid-19.
There are some limits to know about: “the size of the loan is limited to twice the company’s wage bill or 25 per cent of its annual turnover based on 2019 figures”, eligibility will be assessed and checks will be carried out. “It doesn’t do anyone any good if you add debt to a business that won’t be able to support it,” Lauhoff says.
Bank of Ireland has already started accepting applications.
“This is an opportunity to get an injection of cash to support your business during the next stage of the recovery”, says Lauhoff. “The majority of businesses will be able to apply online through the portal and I would encourage them to do that as early as they can as we are already experiencing strong demand. The portal offers a streamlined and very easy to use application process. It also contains a lot of information and resources to guide business through the process.”
[ bankofireland.com/cgsOpens in new window ]
