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Farmers will be included in a € 2bn credit guarantee scheme as part of a series of measures to help businesses across the economy recover from Covid-19.
The measures were announced today, Saturday, May 2, after a cabinet meeting. The € 2 billion Covid-19 credit guarantee plan aims to support loans to small and medium-sized enterprises (SMEs) for terms ranging from three months to six years, which will be below market interest rates .
Michael Creed, Minister of Agriculture, Food and Marine, said: “I appreciate the announcement of the expanded Credit Guarantee Plan. I have worked with my colleagues to ensure that our primary producers are included in the new scheme and I am now happy to confirm that they will.
Cash flow and liquidity are a key issue throughout the food chain and this scheme will give confidence to all companies that assistance will be available when needed.
The Credit Guarantee Plan will provide an 80% guarantee on loans to SMEs until the end of this year, for terms between three months and six years.
SMEs will be able to go directly to the banks in the scheme, and the guarantee can be used for a wide range of loan products between € 10,000 and € 1 million that have a maximum term of six years or less. It will be available to all sectors of SMEs, including primary producers, the government confirmed.
Interest rates will be below current market rates. This scheme “forms an important component of the Government’s strategy to help SMEs in these difficult times.”
The Covid-19 Credit Guarantee Scheme is a further development of the existing Credit Guarantee Scheme which is now available from AIB, Bank of Ireland and Ulster Bank, and other lenders may have access to the scheme.
Lenders will be subject to a 50% portfolio limit. This reduces “contingent exposure” to the treasury, which means that the size of the scheme may be larger, a government statement explained.
The implementation of this scheme will require legislation, the drafting of which has been approved by the Government.
Parallel to the drafting of the legislation and its passage through the Oireachtas, three government departments (including Minister Creed) and the Strategic Banking Corporation of Ireland will work to ensure that the scheme can be implemented “as soon as possible after the enactment of the legislation, ”according to the statement.
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