Microfinance Ireland opens new € 15m Covid-19 fund



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State fund Microfinance Ireland has opened its new € 15 million Covid-19 fund to support small businesses during the current period of uncertainty and protect jobs that have been affected by the coronavirus pandemic here.

Small businesses can apply for loans of up to € 25,000 for a term of three years with no repayments and no interest for the first six months of the loan.

Repayments begin in month seven, but the interest paid in months seven to 12 of the loan will be repaid by the government in month 13, once all repayments in those six months have been paid in full, that gives 12 months without interest.

The loan is only available to micro businesses, but Microfinance Ireland CEO Garrett Stokes said the definition covers most businesses in the country.

“Any business, and it can be a sole trader or a partnership or a limited partnership, that has less than ten employees and a turnover of up to 2 million euros is what is defined as a micro-enterprise,” he said.

“That covers about 94% of all businesses in Ireland.”

To apply, businesses must have been turned down by a traditional lender such as a bank. This particular scheme is also for those affected by Covid-19, so it would not be suitable for newly established companies.

“The Covid loan is specifically for people who were negatively affected by the pandemic,” Stokes said.

“We have other funds for startups or other micro-businesses that would support businesses that are just starting out or are looking for expansion funds,” he said.

Stokes said he hoped the money would be used by companies trying to restart their businesses, perhaps by buying shares or investing to make a location Covid-compliant.

He said he anticipated that most applicants would still have their businesses closed, or at least have significantly reduced income, and this could help them get back on track.

After unprecedented demand from micro-businesses, the initial Covid-19 Microfinance Ireland Loan was fully underwritten in July.

Before suspending the fund, MFI said it had supported 687 companies with around € 20 million in approved loans.

It also supported 760 of its existing clients with moratoriums and loan restructurings.

Mr. Stokes said he was delighted to receive additional government funding that would allow us to reopen applications starting today.

“Since March, the demand for MFI loans, particularly Covid-19 loans, has exceeded all expectations, resulting in all funds being fully subscribed a few weeks ago,” Stokes said.

“We can see where most of the demand is coming from and our new Covid-19 Loan Plan has been designed to meet the current needs of those micro-businesses as they move through today’s challenges and beyond.”



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