Posted by Conor Houlihan, Kate Curneen and Elaine Cummins on 6 May 2020
Tagged to COVID-19, Government Assistance

On 2 May 2020, the Irish government announced a further EUR6.5 billion suite of supports for businesses affected by COVID-19. The new measures are primarily aimed at helping businesses revive operations and rehire staff in line with the government’s Roadmap for Reopening Society and Business, published on 1 May.

The new measures include low-cost loans, a waiver of commercial rates and a deferment of tax liabilities. These measures are in addition to the governmental assistance for SMEs announced by the Minister for Business, Enterprise and Innovation on 8 April (link to previous briefing here) and the forbearance and support measures already implemented by the Irish banks, credit-servicing firms and retail-credit firms (link to previous briefing here).

Below we summarise the key points.

Pandemic stabilisation and recovery fund

A EUR2 billion sub-portfolio named the Pandemic Stabilisation and Recovery Fund (PSRF), will be established within the Ireland Strategic Investment Fund (ISIF). The PSRF will invest in businesses affected by COVID-19 to help them return to long-term viability. While the PSRF will primarily focus on investment in large and medium-sized enterprises employing more than 250 employees or with an annual turnover over of EUR50 million, ISIF may consider investing in enterprises below these thresholds if they are assessed to be of “substantial scale and of significant importance at national or regional level.”

The PSRF investment may be in the form of senior debt, equity or hybrid instruments depending on the particular circumstances and requirements of the applicant. Applicants must demonstrate that their business was commercially viable before the COVID-19 pandemic and that they can return to viability and contribute to the Irish economy post-COVID-19.

For example, as part of the application process, businesses will be required to provide details of their revenue, EBITDA and profit after tax for each of the last three years and projected turnover for the next 12-month period. Businesses will be required to maximise other capital sources, such as existing shareholders, banks, potential new co-investors and available funding from European sources (such as the European Investment Bank), thereby minimising the amount of ISIF capital that may be needed. The PSRF will be invested on a commercial basis and ISIF will therefore require an appropriate risk-adjusted return from any investment it makes.

Commercial rates payment break/reductions

Commercial rates for businesses forced to close due to public health requirements are being waived for a three-month period beginning on 27 March 2020. It is estimated that this waiver will reduce local authority income by EUR260 million and the Exchequer will meet these costs.

Some of the measures (as detailed below) will not be available immediately, as they need legislation. This process will take some time, and will likely be affected by the ongoing government formation talks.

COVID-19 credit guarantee scheme

A EUR2 billion COVID-19 Credit Guarantee Scheme has been announced. It will provide an 80% guarantee on a wide range of lending products in amounts between EUR10,000 and EUR1 million that have a maximum term of six years or less. Interest rates will be below current market rates. The new scheme is a development of the existing Credit Guarantee Scheme, which is  available from AIB, Bank of Ireland and Ulster Bank. It will be possible for other lenders to access the scheme and it will be available to all SME sectors including primary producers, such as farmers.

As mentioned above, before commencing this scheme, the implementing legislation must be signed into law. However, the government and Banking & Payments Federation Ireland (BPFI) have confirmed that they will work together with all relevant stakeholders to ensure the implementation and operation of the scheme is as efficient as possible after legislation is enacted.

“Warehousing” of tax liabilities

New arrangements (the details of which are yet to be finalised, but are expected to be contained in the Finance Bill 2020) will be put in place by the Irish Revenue Commissioners (Revenue) to allow businesses in any sector of the economy who have been negatively affected by the COVID-19 pandemic to warehouse certain tax liabilities associated with the COVID-19 crisis that they cannot, for liquidity reasons, pay while the crisis is ongoing.

It is expected that such debts will be warehoused, interest-free, for a year from the recommencement of trading, during which time there will be no enforcement action taken by Revenue in respect of such debt. Qualifying businesses will be expected to engage with Revenue prior to the expiry of the warehousing period to reach an agreement on an exit strategy suited to their specific business needs and the need for continued viability. To qualify (and to continue to qualify) for the arrangements, businesses will be required to remain compliant with their return filing and tax payment obligations in respect of tax periods that postdate the periods covered by the warehoused debt.

Provision of a restart grant for micro and small businesses

A Restart Fund of EUR250 million will be created for micro- and small enterprises to help them reconnect with the market, their employees and their customers. Details of the scheme are yet to be finalised (but are expected in the coming weeks). It is intended that the fund, which will provide up to EUR10,000 per business, will be implemented either through a rebate or waiver scheme based on rates payments for 2019, and will be targeted more widely at micro- and small enterprises that have suffered significant decreases in revenue as a result of the crisis.

Other developments

Separately, on 30 April 2020, BPFI announced that its members, including the five main retail banks, together with retail credit and credit servicing firms, have agreed that a further three-month extension to the current payment break would be made available to customers that continue to be directly affected by the fallout from the COVID-19 pandemic. This permits a payment break of up to six months in total. BPFI also confirmed that the same extension arrangement will be available to affected customers who have not yet applied for a payment break.


These measures have been broadly welcomed across the business community. It is hoped the necessary implementing legislation can be enacted quickly to give all of the measures full effect, given the unprecedented and time-critical difficulties faced by many businesses as a result of the ongoing crisis.

For more information and support, please get in touch with your usual DLA Piper contact.


The authors

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