Businesses have received less than a f ifth of Covid support funds
LESS than 20pc of the Covid and Brexit business support money available through the Department of Business, Enterprise and Innovation (DBEI) has been channelled into struggling businesses.
Companies have been approved for less than €900m of the approximately €5bn allocated in various grants, loans and credit guarantees put in place by the Department to help business with Covid and Brexit costs.
According to the DBEI Covid-19 and Brexit Business Support Tracker, some of these programmes have proved very popular, with high take-up among businesses leading to almost full draw-down of the available funds.
However, most of the loan programmes have not come close to distributing the hundreds of millions earmarked to help companies facing capital needs because of Covid restrictions or the impact of Brexit.
Grants from local enterprise offices have been almost fully allocated in some cases. For example, the Business Continuity Voucher scheme has paid out €26m of a possible €27m.
The larger Restart Grant scheme, which provides up to €42,500 for businesses that had to close due to Covid, has approved grants of more than €400m from its €550m in funding.
The Covid-19 Working Capital Scheme, by contrast, has approved just 877 of 3,747 loan applications for a total of €111.3m of its €425m fund.
The largest component of the available supports – a €2bn credit guarantee scheme backed by the Strategic Banking Corporation of Ireland (SBCI) – was in the works through the spring and summer but only became fully operational in the last month, so its contribution is negligible so far.
But SBCI’s Brexit loan scheme has sanctioned only 280 loans from 1,184 applicants, who have received €56.3m of the €425m available in the programme.
Separately, data published by the Central Bank yesterday showed the cost of borrowing for Irish SMEs is more than two-and-a-half times the euro area average.
Small businesses in Ireland were paying an average interest rate of 5.03pc in August on borrowings up to €250,000, according to the data. However, the equivalent euro area rate was just 1.90pc.
That penalty for Irish SME borrowers versus their peers is far wider than the difference between the cost of Irish mortgages and the cost of mortgages in most other euro area countries, which is 2.83pc here versus 1.35pc.