The Irish government on Sunday published legislation to expand funding for two of its emergency loan programmes. Publishing the Microenterprise Loan Fund Amendment Bill 2020, the legislation will expand the Microfinance Ireland Covid-19 loan scheme and the Future Growth Loan scheme.
The former scheme will expand from €7m to €20m, with the latter jumping by €200m. The Irish Times references that the ISME chief executive noted that drawdowns on the schemes to date were “totally inadequate” and that overall, less than €75m has actually found its way to Irish businesses in enterprise support since the pandemic began.
These schemes were expanded on April 8 when the government initially announced liquidity measures of c.€1bn available for SMEs. But the government subsequently expanded its liquidity support substantially in early May to €6.5bn, the main components of which were a €2bn capital plan, a €2bn loan guarantee scheme (80% guarantee) and €2bn of tax debt warehousing.
According to Goodbody Stockbrokers, "In a recent report, the Central Bank estimated that liquidity support needed for SMEs ranged from €2.4-5.7bn for a 3-month lockdown. However, at the time we noted that this level of requirement looked low to us. In a detailed note published last week on the Irish banks, Back to the future; Sizing Covid-19 for the Irish Banks, we estimated that total liquidity support for all enterprises (SMEs and larger corporations) could total as much as €12.5bn, potentially requiring a significant step-up in likely support for companies."