New €15m Covid-19 Fund announced by Microfinance Ireland to support small businesses affected by COVID-19

Microfinance Ireland recently announced further funding of €15m for businesses that have been impacted by COVID-19.  The business loan is a government initiative to support small businesses through current challenges and to protect job creation and sustainment.

An earlier €20m COVID-19 loan scheme from Microfinance Ireland launched in March was fully subscribed and closed in July. 

The loans of up to €25,000 are for companies with less than 10 employees, with zero interest or repayments for the first six months and the equivalent of an additional six months interest free, subject to certain terms and conditions.

Applications via Local Enterprise Offices can avail of a 4.5% interest rate and businesses will also be appointed an MFI mentor to guide them through the application process.

Richie Walsh, Head of Enterprise at Local Enterprise Office Waterford said that access to the microfinance loan will help alleviate the financial pressures on small businesses that have been adversely affected by COVID-19. “As a result of the first round of Microfinance Ireland business loans, €365,000 has been accessed interest free and repayment free for the first six months by fifteen local businesses.”

“To qualify for the loan, businesses will have to show that they have been adversely impacted by COVID-19 in the form of a loss of at least 15% of actual or projected turnover or profit.  At a time when many businesses are worried about cashflow, this offering from Microfinance will alleviate some of the worry about access to finance in the coming weeks and months.”

The Old Couch Café opened its doors just as the COVID-19 pandemic began to take hold.  Within days of announcing a new, contemporary restaurant in O’Connell Street, owners Damira Levacic and Przemek Muszynski were left with many of the financial commitments associated with opening a new business, with no customers and an uncertain future.

By applying for a Microfinance Ireland loan, Damira and Przemek were able to access finance with no interest rate or no repayments for 6 months.  Damira said, “It really was the shot in the arm we needed to continue with our vision of opening our restaurant in Waterford city.  Our plans to open came to a halt in March when the Government required the mandatory shut down of businesses.  While we had no paying customers, we were still faced with the costs of running a restaurant, such as paying suppliers, rent, and utilities.”

“The microfinance loan allowed us to not only to pay these bills and keep the lights on, but also helped us to purchase the necessary health and safety equipment to keep us, our staff and customers safe when we reopened.”

Richie Walsh added, “It’s now that companies need access to finance without having to worry about immediate repayments or accruing interest.  In fact, the new scheme stipulates a government rebate for interest paid on loans in months 7 to 12, with the rebate paid automatically into the business account in month 13 of the loan.”

“For any small business that wishes to apply for the Microfinance Ireland loan through the Local Enterprise Office, we will assign a dedicated MFI mentor to assist with preparing cash flow projections in order to make the process as seamless as possible.”

To apply for a Microfinance Ireland loan visit here or call Local Enterprise Office Waterford on 0761 10 2905.

 

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