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Financial lifelines to keep your business healthy through the Covid crisis

These State-backed initiatives to support business could be just what the doctor ordered

‘The suite of supports the Government has introduced is a welcome boost in supporting Irish businesses through this recovery’

‘The suite of supports the Government has introduced is a welcome boost in supporting Irish businesses through this recovery’

 

Restart Grant Plus

The Restart Grant Plus is worth between €4,000 and €25,000 to help businesses reopen their premises. To qualify they have to have less than 250 employees and have suffered a hit to revenues of at least 25 per cent as a result of Covid. It’s a follow-on from the initial Restart Grant, but if you’ve already availed of that that you can apply for a top-up, to the revised maximum grant level. With Restart Plus, the turnover allowable has gone up from €5 million to €25 million. The new scheme is also open to some who were ineligible first time around, such as rateable sports businesses or trading charity shops. Small company chains are eligible too, but multinational companies are not. Apply through your local authority.

Covid-19 Credit Guarantee Scheme

A development of the SBCI’s (Strategic Banking Corporation of Ireland) existing Credit Guarantee Scheme, the Government’s new €2 billion Covid-19 Credit Guarantee Scheme provides an 80 per cent guarantee for credit products ranging from €10,000 to €1 million, for terms of between three months and six years. It’s available to all SME sectors, including primary producers, with interest rates set below current market rates. To qualify you have to declare an adverse impact of a minimum of 15 per cent of actual, or projected, turnover or profit due to the impact of Covid-19. Available through AIB, BOI and Ulster Bank.

Pandemic Stabilisation and Recovery Fund

The Ireland Strategic Investment Fund (ISIF), controlled and managed by the National Treasury Management Agency (NTMA), is a €15.1 billion fund. It is currently assisting medium- and large-scale enterprises through the new €2 billion Pandemic Stabilisation and Recovery Fund, which makes capital available on commercial terms via a mix of equity, debt and hybrid instruments. The fund will consider investments in enterprises in all sectors, with minimum investment of €10 million. Though most transactions come via its network, you can contact the fund directly at isif.ie.

Covid-19 Working Capital Loan Scheme

A repurposing of the existing Brexit Loan Scheme, this €450 million initiative helps to fund working capital requirements, or to fund any changes to a business to mitigate the impact of Covid-19. Loans of between €25,000 and €1.5 million are available, at a maximum interest rate of 4 per cent, over a term of between one and three years. Crucially, it includes unsecured loans of up to €500,000, with the option of interest-only repayments initially.

Covid-19 Online Retail Scheme

Online has proven the big winner in Covid. For retailers looking to boost their online offer, check out Enterprise Ireland’s €5.5 million Covid-19 Online Retail Scheme, launched as part of the Government’s July Jobs Stimulus package. It is designed to enable businesses enhance their digital capability, drive online sales and grow their customer base, at home and, hopefully, abroad. It’s a grant worth between €10,000 and €40,000, to cover up to 80 per cent of project costs. It can be used to fund fees for service providers, to develop and implement a digital strategy, supported by in-house training, and to enhance your website and related systems. The competitive funding round opened at the end of August and closes September 28th.

Trading Online Voucher

For smaller businesses at an early stage of their ecommerce journey, Local Enterprise Office (LEO) Trading Online Voucher Scheme is worth up to €2,500 to help them boost their online sales. Where previously the scheme was set up on a 50:50 matched funding basis, it’s now 90 per cent funded by the LEOs. A portion of it can be used for online advertising and if you’ve already received one, you can now apply for a second one to upgrade your online offering.

Covid-19 Business Loan

Local Enterprise Office clients can also avail of lower-cost loans (at interest rates of between 4.5 per cent and 5.5 per cent) from Microfinance Ireland. Keep an eye out for its Covid-19 Business Loan offering. Though currently closed to new applicants, if it receives new funding it will be able to offer business loans of up to €50,000, for terms of 36 months which include an initial six-month interest-free and repayment-free moratorium.

Sustaining Enterprise Fund

Enterprise Ireland’s €180 million Sustaining Enterprise Fund provides funding from €100,000 to €800,000 for manufacturing and internationally traded services companies, with more than 10 employees. It’s aimed at businesses that are, as it puts it, “vulnerable but viable”, with up to 50 per cent of the funding provided being non-repayable, to a maximum non-repayable support element of €200,000. It’s designed to ensure recipients have enough short-term liquidity to see them through the current crisis, which is why the repayable advances element of the vehicle aren’t due for repayment until years four and five – that is, no repayments fall due for the first three years. Applications, which require a Sustaining Enterprise Project Plan, close in December of this year.

Sustaining Enterprise Fund - Small Business

Smaller businesses are addressed through Enterprise Ireland’s Sustaining Enterprise Fund – Small Business instrument. This provides an injection of between € 25,000 and € 50,000 in short term working capital to support business continuity through the crisis, with a view to strengthening recipients’ ability to survive, thrive and return to growth in three years time.

Private equity

The crisis may have put merger and acquisition activity on ice, but a mid-year review from law firm William Fry sees indications of a thaw from May, as dealmakers returned to the table. Ireland may look surprisingly good to funds right now, as the European Commission predicts GDP here will return to growth in 2021 at a rate of 6.1 per cent (after contracting by 7.9 per cent this year) compared with a predicted EU average of 4.8 per cent. With valuations attractively low and little else providing much by way of return on investment, private equity will be of interest to some.

Peer-to-peer lending

Linked Finance funded more than €5.2 million in loans to SMEs since the start of lockdown. It provides loans for working capital, new kit or to hire staff. To proceed you need six months’ bank statements, two years’ accounts, and a tax clearance certificate. Applications take minutes online and, once you get the documentation in, decisions come within 24 hours. Loans are for anything from €5,000 to €300,000.

Covid-19 Business Financial Planning Grant

Not sure what kind of financial assistance you require? There’s a grant for that too. Enterprise Ireland’s Covid-19 Business Financial Planning Grant gives qualifying companies €5,000 to help them develop a robust financial plan, to get through the current crisis. The money can also be spent preparing the documentation required to support applications for external finance from banks or other finance providers, enabling you put your best foot forward.

If it doesn’t work, it’s worth remembering that the team at the Credit Review office is always there to assist any viable business having difficulty in accessing finance for whatever reason, including the business impact of Covid-19. Its strike rate is impressive – 90 per cent of the business owners it supported had unfavourable credit decisions taken by their banks overturned.

But debt isn’t necessarily the complete answer, according to Hazel Cryan, head of debt advisory with KPMG in Ireland.

“The suite of supports the Government has introduced is a welcome boost in supporting Irish businesses through this recovery,” she notes. “Many of the supports that are available provide debt at market rates. We would recommend that finance directors fully evaluate their liquidity requirements across a range of scenarios and stress cases, and then decide on the appropriate mix of debt and equity funding to ensure their business survives and maybe even thrives.”