The COVID-19 pandemic continues to cause unprecedented business interruption across Irish enterprise. As businesses across every industry shut their doors for the foreseeable future, short- to medium-term liquidity will be a key challenge. The capacity to generate revenue in the short-term will be extremely limited for the majority of these businesses.
The Government and Irish banks have put in place measures to assist cash flows by agreeing to a three-month freeze on loan repayments for struggling businesses whose income has been reduced due to the outbreak. While this is a welcome pro-active step, it is clearly a short-term measure and unsustainable beyond this immediate timeframe.
The Strategic Banking Corporation of Ireland (SBCI) have announced a €200m Working Capital Loan Scheme for businesses impacted by COVID-19. The SBCI is a government agency with the primary mandate of providing flexible funding solutions to Irish SMEs. Funding under this scheme is provided via SBCI’s on-lending partners: Bank of Ireland, AIB and Ulster Bank.
The headline features are:
To meet the eligibility criteria, you must:
The process to successfully draw down a facility involves the following steps:
The process of obtaining credit approval will require the provision of a business plan to include (at a minimum) summary financials, cash flows and a business overview. Crowe is well placed to assist you in preparing and delivering this vital information which will ultimately determine the success or otherwise of your loan application.
Our corporate finance advisory team have a long-established track record of helping SMEs secure funding lines. We have developed strong and long-lasting relationships with all major lending institutions and can guide you through the process to help ensure a positive outcome.
This government-backed scheme is an important measure which will enable businesses who will undoubtedly run into cash flow difficulties to survive and grow in the medium term. No timeframes have yet been advised in terms of the length of the application process. Given the time-sensitive nature of the funding needs, we would expect that all parties will be fully engaged with a keen eye on swift and accelerated drawdowns.
* SMEs are defined by the Standard EU definition [Commission Regulation 2003/361/EC] as enterprises that:
A Small Mid-Cap is an enterprise that is not an SME but has fewer than 500 employees.
Businesses with up to 499 employees can apply for eligibility to the scheme.