€15m Covid-19 loan fund launched for Irish microenterprises
The State-backed group Microfinance Ireland (MFI) has announced a new Covid-19 fund to support microenterprises – companies that have nine employees or less – affected by the Covid-19 pandemic. The fund, worth a total of €15m, will allow for businesses to receive up to €25,000 with a three-year term.
As part of the agreement, the business does not make repayments or pay interest on the loan in the first six months. The interest paid between seven to 12 months after the start of the loan will be refunded by the Government in month 13, once repayments in the first six months have been paid in full.
The interest rate for these loans will by 4.5pc if they are applied for through a Local Enterprise Office or other referral partner. MFI said that it will also offer an interest rate of 5.5pc fixed APR from month seven to the end period of the loan if applications are made directly to it.
Demand ‘exceeded all expectations’
“Since March, demand for MFI loans, particularly the Covid-19 loans, has exceeded all expectations, resulting in all funds being fully subscribed some weeks ago,” said MFI’s CEO, Garrett Stokes.
“We can see where the demand is coming from most and our new Covid-19 loan scheme has been tailored to meet the ongoing needs of those micro-businesses as they navigate their way through the current challenges and beyond.”
Meanwhile, MFI board chair, Cyril Forbes, added: “MFI appreciates these additional Government funds that enable us to do what we do best, supporting, sustaining and protecting micro-enterprises and the jobs they create, in every town and county in Ireland.”
Last July , Tánaiste Leo Varadkar, TD introduced a Bill to the Dáil to amend an existing law that prevented MFI from providing increased funding to SMEs. Prior to suspending the fund, MFI said it had supported 687 businesses with approximately €20m in loans approved.
MFI also provided 760 of its existing customers with loan moratoriums and loan restructures.
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