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Minister for Business, Enterprise and Innovation Heather Humphreys TD today (Tuesday 8 October) announced that her department will have immediate access to an emergency support package of €110 million in a No Deal Brexit.
The funding will be available on day one of a crash-out to activate four specific schemes and other measures supporting those businesses most affected. The schemes will be available to vulnerable but viable firms with verifiable Brexit-exposure.
This is an initial tranche of emergency funding, which can be built upon as the situation evolves in consultation with the Minister for Finance and Public Expenditure and Reform.
The total allocation to the department in Budget 2020, without this emergency funding, is €971 million.
Minister Humphreys said:
"Given the ongoing political uncertainty in the UK, the chances of a No Deal Brexit are high. The suite of schemes I am announcing today will be immediately activated on day one of a crash-out. They will support vulnerable but viable firms and build on the many supports already introduced by Government over the last three years. They have been designed using the feedback of businesses, and will ensure that Irish enterprise is able to respond to the challenges that a No Deal Brexit presents."
The four schemes and other initiatives, which will be activated in a No Deal scenario include:
This fund is for the worst-case scenario. It will rescue firms with acute liquidity or insolvency problems and support them to put a restructuring plan in place to adjust to their new reality with investment support potentially of up to €10 million under state aid rules for firms of all sizes depending on circumstances. The funding will be provided in the form of equity or loans through Enterprise Ireland and it will be available to eligible EI, IDA Ireland and Údarás na Gaeltachta clients, as well as non-agency clients.
This Fund will support businesses in the manufacturing and internationally traded services sector, ranging from food and engineering firms to business process outsourcing firms. It will help those businesses to adapt their business model as needed and adjust to the new trading reality. It is targeted at businesses with 10 or more employees, through grants, equity and loan support of up to €1 million dependent on the circumstances of individual firms. Similar to the Rescue and Restructuring Fund, it will be delivered through Enterprise Ireland and available to eligible Enterprise Ireland, IDA Ireland and Údarás na Gaeltachta clients, as well as non-agency clients.
This Fund will be administered by Enterprise Ireland. It is a grant scheme supporting larger indigenous firms to transform their business to develop new products and processes, to achieve a step-up in levels of competitiveness and innovation and to assist in diversifying to new markets. There will be initial funding of €5 million for primary food processing companies and €3 million for non-food companies, for example, in traditional engineering sectors. Additional funding for food transformation is also being made available through the Department of Agriculture, Food and the Marine.
A micro enterprise is a small business (including a self-employed person) with fewer than 10 employees and an annual turnover of less than €2 million. Budget 2020 includes two related measures to support these businesses in a No Deal Brexit.
Firstly, the department will increase its funding to Microfinance Ireland (MFI) to allow it to increase the amount that it can lend to micro enterprises from €25,000 to €50,000 over a 2-5 year period at a competitive rate.
Secondly, the above MFI supports will be linked to a “Micro-Enterprise Emergency Brexit Fund” operated by the Local Enterprise Offices (LEOs). Enterprises will have first recourse to MFI and then , if required, they may avail of further support in the form of a repayable grant worth up to €50,000 through their LEO.
In tandem with these Schemes, the Minister announced that, in a No Deal scenario, an additional €2 million will be immediately granted to InterTrade Ireland to support firms in the Border region, North and South.
Furthermore, an extra €3 million will be allocated to regulatory bodies to meet additional demands in the areas of market surveillance, accreditation and conformity. These bodies include the National Standards Authority, the Irish National Accreditation Board, the Competition and Consumer Protection Commission and the Health and Safety Authority.
Minister of State for Trade, Employment, Business, EU Digital Single Market and Data Protection, Pat Breen TD, said:
"Building enterprise capability in the regions, especially among our smallest firms, is a key driver of productivity growth and resilience. I fully support these measures, which will ensure that microenterprises and SMEs in every part of the country are given every possible support in the face of a No Deal Brexit. The government already offers a range of supports to help businesses prepare and I would urge anyone who has not already engaged with these supports to visit their Local Enterprise Office as a first port of call."
Minister Humphreys also announced that she had secured an additional €10 million in capital funding for the second phase of the Disruptive Technologies Innovation Fund, one of the first funds of its type in the world and a key element of Project Ireland 2040. Already, €75 million has been allocated to 27 ground-breaking projects under the Fund, which will change how we work and live. This funding has been immediately allocated and is not conditional on a No Deal Brexit.
Minister Humphreys also announced that she has secured an additional €2 million in capital funding for Science Foundation Ireland. This will go towards the renewal of the cutting-edge research programme run by the SFI Research Centres.
Discussing the funding for the Disruptive Technologies Innovation Fund and Science Foundation Ireland, Minister of State for Training, Skills, Innovation, Research and Development, John Halligan TD, said:
"This additional investment will enable us to address a number of actions contained in Future Jobs Ireland, our whole-of-Government plan to prepare our businesses and workers for the future. Not only will it help us to create and safeguard the jobs of the future, it will also allow us to support partnerships between academia and businesses, both indigenous and foreign-owned, which will keep both sectors at the cutting edge of innovation on the global stage."
Also in the context of Brexit, Minister Humphreys welcomed the measures announced by Minister Donohoe which will enhance a number of the taxation supports specifically targeted at our SMEs.
These include:
Changes to the R&D tax credit scheme will help drive our enterprises towards innovation, thereby stimulating greater productivity amongst our SMEs which is a key focus of Future Jobs Ireland. The amendments to the Employment and Investment Incentive Scheme and the KEEP share option scheme will help our enterprises secure investment and attract and retain talent.
ENDS
Please see further information on the Department of Business, Enterprise and Innovation’s key Budget 2020 initiatives below.
The Rescue and Restructuring Fund is for the worst-case scenario. It will rescue firms with acute liquidity or insolvency problems and support them to put a restructuring plan in place to adjust to their new reality. The funding support can be provided in the form of equity or loans potentially of up to €10 million under state aid rules, depending on the circumstances of the business in difficulty, to meet the restructuring needs of the firm.
The Fund will be delivered through Enterprise Ireland to firms of all sizes in difficulty, and EI will work with impacted firms on developing their viability and restructuring plans. It will be available to clients of eligible Enterprise Ireland, Údarás na Gaeltachta and IDA Ireland, as well as non-agency clients.
The introduction of the Rescue and Restructuring Fund has already been approved under EU State Guidelines. In the event of a no Deal Brexit an initial tranche of €42 million in funding will be made available to enterprises requiring rescuing and restructuring in the immediate aftermath of the of the UK leaving the EU without agreement.
The Transition Fund, which will also be delivered by Enterprise Ireland, will be available to vulnerable but viable enterprises employing 10 or more employees who have a verifiable Brexit exposure and who are engaged in manufacturing and international traded services. Transitional graduated support will be by way of a grant, loan facility or equity investment, whichever is most appropriate for the viability of the enterprises concerned. Supports of up to €1m will be available to assist enterprises in their transition, albeit that the quantum in each instance will be related to the nature of the support provided and the needs of the enterprise concerned.
Similar to the Rescue and Restructuring Fund, it will be delivered through Enterprise Ireland and available to eligible Enterprise Ireland, IDA Ireland and Údarás na Gaeltachta clients, as well as non-agency clients.
The provision of transitional support fully accords with EU “de Minimis” State Aid Regulations. In the event of a no Deal Brexit an initial tranche of €45 million in “de Minimis” support will be made available to support eligible vulnerable but viable enterprises to affect the transition required by a post No Deal trading environment.
This Fund will be administered by Enterprise Ireland. It is a grant scheme supporting larger firms to transform their business to develop new products and processes, to achieve a step-up in levels of competitiveness and innovation in indigenous enterprises and to assist in diversifying to new markets, with an initial funding of €5 million for primary food processing companies and €3 million for non-food companies, for example in traditional engineering sectors. Additional funding for food transformation is also being made available through the Department of Agriculture, Food and the Marine.
Budget 2020 includes two specific and related measures to support micro enterprises to deal with a No Deal outcome. The measures will be available to micro enterprises who operate as sole traders, co-ops, partnerships and other small businesses employing 9 or fewer employees and whose turnover is less than €2 million.
The first such measure will provide an additional capital injection of €5 million to Microfinance Ireland (MFI). This would allow MFI to increase the amount that it can lend to micro enterprises from €25,000 to €50,000 at a competitive rate.
The additional MFI supports will be linked to an “Emergency Brexit Fund” to be run by the Local Enterprise Offices (LEOs). An additional €5 million will be provided by way of repayable grants of up to €50,000. Enterprises would first have recourse to MFI where they could receive up to €50,000 in loans over a 2-5 year period and if required could avail of up to a further €50,000 in a repayable grant from their local LEO.
In tandem with these Schemes, the Minister announced that, in a No Deal scenario, an additional €2 million will be immediately granted to Intertrade Ireland to support firms in the border region, North and South.
An additional funding package of €3 million will be made available in a No Deal Brexit to provide the Regulatory Bodies such as the National Standards Authority, the Irish National Accreditation Board, the Competition and Consumer Protection Commission and the Health and Safety Authority with the necessary resources to meet the expected additional demand for their services, in terms of market surveillance, accreditation and conformity. The additional €3 million in funding will build upon the €8 million Brexit staffing package provided in Budget 2019 and the related measures in Budgets 2017 and 2018.
The Brexit Loan Scheme, which was launched in March 2018 provides affordable financing to businesses that are either currently impacted by Brexit or will be in the future. The Scheme is delivered by the Strategic Banking Corporation of Ireland (SBCI) through Bank of Ireland, Ulster Bank and AIB and makes €300 million available to eligible businesses with up to 499 employees at an interest rate of 4% or less.
Loan features:
Loans can be used for:
The Future Growth Loan Scheme, which was launched in March 2019, provides affordable financing to Irish businesses and the primary agriculture and seafood sectors to support strategic long-term investment in a post Brexit environment. The Scheme, which is delivered by the Strategic Banking Corporation of Ireland (SBCI) through Bank of Ireland, Ulster Bank, KBC and AIB makes €300 million available to eligible businesses with up to 249 employees at an interest rate of 4.5% or less for loans up to €249,999 and 3.5% and less for loans greater than or equal to €250,000.
Loan features:
Loans can be used for:
Microfinance Ireland was established to operate the Microenterprise Loan Fund Scheme, which was introduced in 2012. The purpose of the fund is to provide loans of €2,000 up to €25,000 to microenterprises (defined as businesses with less than 10 employees and /or turnover of less than €2 million) who cannot obtain funding through traditional sources.
Key features of the scheme:
ENDS
The Department of Business, Enterprise and Innovation (DBEI) plays a key role in implementing the government’s policies of stimulating the productive capacity of the economy and creating an environment which supports job creation and maintenance. The department has lead responsibility for Irish policy on global trade and inward investment and a remit to promote fair competition in the marketplace, protect consumers and safeguard workers.
For further information please contact Press Office, D/Business, Enterprise and Innovation, press.office@dbei.gov.ie or (01) 631 2200
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