The coronavirus pandemic is affecting the lives of people around the world, but small businesses have been particularly impacted by this global crisis. With the closure of businesses everywhere in an effort to slow the spread of COVID-19, cash flow and even business survival is a major issue. That’s why it’s important for business owners to know what support is available to them. We’ve compiled a list of some of the supports, loans and grants that are available for businesses in Ireland, the UK and Australia.
Microfinance COVID-19 Business Loans
These loans are a Government initiative provided by Microfinance Ireland in order to protect jobs and support small businesses.
Loans: Up to €50,000.
Term: 36 months.
Interest Rate: Between 4.5% and 5.5%.
Special Features: 6 months interest free and repayment free.
Loan repaid over the remaining 30 months of the 36-month period.
Eligible: Any business with less than 10 full time employees and an annual turnover of up to €2 million.
SBCI COVID-19 Working Capital Loan Scheme
The SBCI Scheme has the financial backing of the European Union under Horizon 2020 Financial Instruments. Though the loans will be available through AIB, Bank of Ireland and Ulster Bank; businesses cannot complete an application until they have received their eligibility letter from the SBCI.
Loans: from €25,000 up to €1.5 million.
Term: Ranging from 1 to 3 years.
Interest rate: Max interest 4%.
- First €500 borrowed unsecured.
- Optional interest-only repayments may be available at the start of the loan.
Credit Guarantee Scheme
By offering a partial Government guarantee the aim of this scheme is to encourage lending to small businesses and make it easier for them to access finance.
Loans: €10,000 - €1 million.
Term: Up to 7 years.
Interest Rates: Banks SME lending rates and a premium (currently 0.5%) which partially covers the cost of the guarantee.
Special Features: Government guarantees 80% to banks.
Sustaining Enterprise Fund
Enterprise Ireland has a €180 million fund aimed at vulnerable but viable businesses.
Loan: Repayable advances up to €800,000 available.
Term: Offers a 3-year grace period and repayment is expected at the end of year 5.
Interest Rate: Annual administration fee of 4%.
Eligibility: Aimed at firms with 10 or more employees.
Future Growth Loan Scheme
There are two versions of this loan; one for SMEs (as discussed below) and one for businesses involved in Primary Agriculture.
Loan: €100,000 to €3 million.
Term: From 8 to 10 years.
Interest Rates: Maximum rate of 4.5% for loans less than €250,000 and 3.5% for loans greater than or equal to €250,000.
- Unsecured loans up to €500,000
- Optional interest-only repayments available in certain circumstances
COVID-19 Wage Subsidy Scheme
Employers can pay employees through payroll and claim back €410 for each qualifying employee. No tax will apply to this subsidy payment and employers should be reimbursed approximately 2 working days after the submission of their payroll.
Short-time Work Support
Employees of businesses that need to reduce hours or days of work can avail of this support. This means that your staff can still support themselves even if you don’t have the capacity to maintain their full hours.
Lean Business Continuity Voucher
Distributed by Enterprise Ireland this voucher can be used to help businesses to continue operation during the COVID-19 pandemic. It is worth €2,500 in training or advisory services support from an approved list of providers. This voucher is open to Enterprise Ireland or Údarás na Gaeltachta clients across any sector, as well as companies that employ 10 or more people in the manufacturing or internationally traded services sectors and are domestically focused.
Trading Online Voucher
This is another LEO government grant scheme. It offers financial assistance up to €2,500 (with co-funding of 10% from the business) along with training and advice to help your business trade online. Any small businesses with up to 10 employees are eligible to apply. Due to the current crisis businesses that have already availed of this support can now apply for a second voucher where upgrades are required.
COVID-19 Online Retail Scheme
Fund size up to €2 million which will be distributed by Enterprise Ireland.
Grants: €10,000 to €40,000.
Aim: To support companies in retail with a pre-existing online presence to respond to domestic and international consumer demand for competitive online offers.
Eligible: Retailers employing 10 or more people.
Commercial Rates Deferral
Impacted businesses are able to defer rates payments due until the end of May.
Coronavirus Business Interruption Loan Scheme
This scheme allows commercial lenders to have confidence in lending to SMEs because of the government’s guarantee on these loans.
Loans: Up to £5 million facility.
Term: Up to six years for term loans and asset finance facilities (subject to credit approval). For overdrafts and invoice finance facilities, terms will be up to three years.
Interest Rates: No maximum on interest rates banks can charge.
- Interest and fees paid by the government for 12 months.
- 80% guarantee provides the lender with a government-backed, partial guarantee against the outstanding facility balance, subject to an overall cap per lender.
Eligible: UK-based small businesses with turnover of no more than £45 million per year, and within an eligible industrial sector.
Bigger companies with an annual turnover of between £45 million and £500 million can borrow up to £25 million.
Coronavirus Job Retention Scheme
This grant covers up to 80% of the average wage. It is worth up to £2,500 a month and allows companies to continue paying staff who’ve been sent home due to Coronavirus impact on business. This is a temporary scheme that has initially been put in place for 3 months, but this may be extended depending on how the situation progresses.
Registered businesses who have a VAT payment due between 20 March 2020 and 30 June 2020 have the option to defer the payment. This deferral of tax payments for another quarter should give businesses a chance to regroup costs.
Small Business Grant Fund (SBGF) / Retail, Hospitality and Leisure Grant Fund (RHLGF)
Under the SBGF all eligible businesses are able to seek grants worth £10,000.
Higher cash grants of £25,000 are available for retail, leisure and hospitality sectors to help them survive the closure of business.
The Australian Government has pledged $189 billion to help SMEs impacted by COVID-19. Many States are also introducing their own measures such as waiving fees, payroll tax refunds, rent relief, and some States are even offering grants of their own.
Coronavirus SME Guarantee Scheme
By offering a partial Government guarantee the aim of this scheme is to encourage lending to small businesses and make it easier for them to get funding.
Loans: Maximum of $250,000 per borrower.
Term: Up to 3 years.
Interest Rates: Decided by bank.
Eligible: Have a turnover of up to $50 million.
6-month repayment holiday.
Government will provide eligible lenders a 50% guarantee for loans.
Unsecured finance (meaning you will not have to provide assets as security).
Grants are based on tax withheld on employee’s wages and calculated automatically from business account statements. Businesses can access up to 100% of the tax withheld. The grant is up to $50,000 but can be received twice so ultimately businesses could be eligible for up to $100,000. To be eligible SMEs must have an aggregated turnover of less than $50 million and have employees.
Instant Asset Write-Off Scheme
The government expanded access to this scheme to include businesses with a turnover of under $500 million. They have also increased the threshold for instant asset write-off from $30,000 to $150,000. This means that businesses can immediately write-off assets costing less than $150,000. This provides cash flow benefits for businesses and leads to less taxable income.
Pause on SME Loan Repayments
Australian Banking Association have announced that banks will allow SMEs to defer repayments for up to 6 months. While interest will still be added during this period it will hopefully give businesses a chance to get back on their feet and start earning again before having to make further repayments.
The Australian Tax Office (ATO) is also offering some tax relief options. Businesses should contact the ATO to access a tailored support plan. Options include deferral of payments, income tax assessments, temporary reduction of payments etc.
How CurrencyFair is Supporting SMEs
With so much uncertainty we want to reassure our business customers that we are operating as normal. CurrencyFair allows you to exchange currencies at rates that can be up to 8x cheaper than the banks. As well as providing a secure platform for your business to send and receive money across borders, our customer support team is online 7 days a week.
All data and information correct as of the 20th April 2020.This publication is provided for general information purposes only and is not intended to cover every aspect of the topics with which it deals. It is not intended to amount to advice on which you should rely. You must obtain professional or specialist advice before taking, or refraining from, any action on the basis of the content in this publication. The information in this publication does not constitute legal, tax or other professional advice from CurrencyFair Limited or its affiliates. Prior results do not guarantee a similar outcome. We make no representations, warranties or guarantees, whether express or implied, that the content in the publication is accurate, complete or up to date.