COVID-19: Supports for Irish businesses

On 2 May 2020, the Irish Government announced a number of measures to further support businesses affected by the covid-19 pandemic. The measures follow on from the publication of the Government’s Roadmap for Reopening Society and Business, and aim to help Irish businesses to restart commercial activity and to re-engage employees who have been laid off or furloughed.

The measures may be seen as the second phase of the Government’s economic response to covid-19, the first being the emergency income support provided by the Temporary Wage Subsidy Scheme and the Pandemic Unemployment Payment.

In this Insight, we look at the main features of the Pandemic Stabilisation and Recovery Fund.

Business Supports

The measures announced by the Irish government include:

• Pandemic Stabilisation and Recovery Fund (the “PSRF”): a EUR 2 billion sub-portfolio within the Ireland Strategic Investment Fund (“ISIF”), which will make capital available to medium and large enterprises;

• Restart Fund: a EUR 250 million fund providing EUR 10,000 restart grants for micro and small businesses which will be based on a rates waiver or rebate. Details of the scheme will be further developed by the relevant government departments;

• Credit Guarantee Scheme: a EUR 2 billion scheme to support lending to SMEs for terms ranging from 3 months to 6 years, which will be below market interest rates. This scheme now includes primary producers, such as farmers and fishermen;

• Rates Alleviation: a three month commercial rates waiver for impacted businesses, and a commitment to local authorities to make up the rates shortfall, so that local authorities can continue provide full services to the public; and

• Tax: the interest-free warehousing of tax liabilities for a period of twelve months after recommencement of trading during which time there will be no debt enforcement action taken by Revenue.

Pandemic Stabilisation and Recovery Fund

The PSRF is a EUR 2 billion fund to support medium and large enterprises in Ireland affected by covid-19, which has been established as a sub-portfolio within the Ireland Strategic Investment Fund (“ISIF”).

Primary Focus

The PSRF is primarily aimed at medium to large scale enterprises (those with more than 250 employees or an annual turnover of over EUR 50 million), but ISIF will consider investment in enterprises below these levels if they are deemed to be of substantial scale and of significant importance at a national or regional level.

Eligible Sectors

The PSRF is open to business operating in all sectors, and applicants do not currently need to align with ISIF's existing Priority Themes of Regional Development, Housing, Indigenous Businesses, Climate Change, Brexit.

Eligible Businesses

To be eligible, a business must be:

• clearly and materially impacted by the pandemic; and
• of scale in terms of employment and economic activity, or of national or regional significance.

Businesses must also have proven business models that were viable and profitable prior to the impact of Covid-19 and must be assessed to have a viable long term future post Covid-19.

Investment Type

Investment may be made through a range of instruments depending on the nature of the business, including equity, debt and hybrid instruments. Where existing shareholders have capital available, they will be expected to contribute alongside ISIF in any recapitalisation. ISIF will also seek to maximise the amount of additional capital that applicants can access from banks, potential new co-investors and from European sources, such as the European Investment Bank.

See our Coronavirus (COVID-19) feature for more information generally on the possible legal implications of COVID-19.