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€20m in emergency EI loans has been paid to 1,100 firms

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Loans: Enterprise Ireland Julie Sinnamon says Covid loan volumes will rise

Loans: Enterprise Ireland Julie Sinnamon says Covid loan volumes will rise

Loans: Enterprise Ireland Julie Sinnamon says Covid loan volumes will rise

ENTERPRISE Ireland says it has disbursed €20m to 1,100 firms seeking State-subsidised loans since the Covid-19 crisis began.

Chief executive Julie Sinnamon - responding to criticism that small firms weren't receiving State-backed finance quickly enough - said the emergency Sustaining Enterprise Fund launched in April should provide its full €180m in loans to small and medium-sized enterprises (SMEs) by the end of the year.

She said at least 700 firms have taken up EI's provision of €5,000 grants to pay for a professional financial consultant to produce business plans for each financially distressed firm. As that support is tapped, she says, the flow of approved loans will accelerate.

"Many firms don't have the expertise in house to put together a plan and to be really clear about where they're going. That step is critical," she said. "It's always a lot easier to get funding when you have a well-thought-out financial plan for the company."

The approved €20m in loans so far equates to around €18,000 per firm. The scheme offers loans of up to €800,000, depending in part on the firm's size, and Ms Sinnamon confirmed that some firms already have received that maximum.

The loans accrue no interest for the first six months, then 4pc annually and must be repaid within five years.

Ms Sinnamon said she wasn't surprised that more loans have not been paid out yet, partly because many of the most cash-strapped firms had remained closed while their employees received State wage subsidies.

"I would expect demand to accelerate from here forward. We didn't expect a fast start," she said.

"Putting together their business plans takes time. They've had the wage subsidy scheme in the short term. That time taken to put together business plans is time well spent," she said. "These plans cover bank finance as well as from shareholders. It isn't just an application for the Sustaining Enterprise Fund."

She said the Government's expected Stimulus Plan next week would provide more EI-administered aid to small business that "will be on top of the existing range of supports".

Ms Sinnamon spoke to the Irish Independent after EI published its 2019 export figures and 2020 outlook. The report noted that EI-backed firms have seen export orders slump 12pc this year, with worse expected.

She said 1,900 of its 5,000 client firms have suffered Covid-19 disruption, while 1,400 export to the UK and will face higher costs and red tape from January 1.

Exports by EI-backed firms rose 8pc last year to €25.6bn. Exports grew twice as quickly to Europe and the US - by 15pc to €5.6bn in eurozone nations, and by 16pc to €4.7bn in North America.

Nonetheless, the UK remained EI's top export market, rising 2pc to €7.9bn, mostly for non-food goods.

Irish Independent