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The Minister of Finance, Paschal Donohoe, has announced a series of additional supports for companies affected by Covid-19, worth approximately € 6.5 billion.
Speaking on Saturday after a cabinet meeting, Donohoe announced a waiver of business fees for companies that have been forced to close for three months, beginning March 27. The measure has cost around € 260 million.
Guaranteed loans of up to € 2 billion will also be offered to the most affected SMEs. The loans will range between 10,000 and 1 million euros and will be guaranteed 80 percent by the State. The terms will be between three months and six years, and the interest rates will be significantly below market rates. This occurs amid criticism of existing schemes that are burdensome to access.
Donohoe also plans to legislate to allow Revenue to “store” VAT and payroll tax debt at zero interest rates stemming from the restrictions.
The measures also include a new “Restart Fund”, worth € 250 million, to help micro and small businesses directly through grants.
The financing will be linked to what each company paid in commercial rates last year and will have a limit of € 10,000.
The Irish Strategic Investment Fund also establishes and operates a “Pandemic Stabilization and Recovery Fund” worth € 2 billion.
Donohoe said the measures are designed to “minimize the damage” from the pandemic. “Our collective public health has been directed; our businesses and our economy have been burdened with an unimaginable burden; and our society is dealing with this new reality, “he said. But by working together, we are minimizing the damage,” said Donohoe.
“In addition to the measures previously implemented by the Government, this set of measures described today is designed to build trust, further assist companies in terms of managing their companies, and allow them to start looking to the future and start charting a way forward for weeks and months ahead, “he said.
Donohoe also said the government has not made a decision on whether to reduce the VAT rate for the tourism and hospitality industry, noting that it will be some time before they reopen.
The measures come amid criticism of existing government schemes operated by the Strategic Banking Corporation of Ireland (SBCI), which are deemed too difficult to access.
The government’s € 200m Covid-19 working capital fund for small businesses has had a low share with € 17m loans made to 100 borrowers, according to figures provided to The Irish Times.
As a result, business groups have been requesting additional support for companies to cover general expenses such as rent, utilities, and working capital.
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