Future Growth Loan Scheme expanded by €200 million
The Future Growth Loan Scheme (FGLS), which is available to agri-food businesses and primary food producers, will be expanded by an additional €200 million due to Covid-19.
Speaking in the Dáil last week, Tánaiste and Minister for Enterprise, Trade and Employment, Leo Varadkar, issued revised estimates of expenditure for the year, due to measures taken to address the pandemic.
Among these measures is included an expanded FGLS, which has been “repurposed” to assist small and medium enterprises (SMEs), including agri-businesses and farmers.
The three functions of the “repurposed” scheme, as outlined by Minister Varadkar, are:
- Assisting enterprises to recover from the impact of Covid-19;
- Assisting enterprises to adapt to a ‘post-Brexit’ environment;
- Allowing businesses to achieve “growth, sustainability and resilience”.
“It seeks to provide longer-term financing by SMEs including farmers and fishers…in the event that alternate state help is not available,” Minister Varadkar said.
According to the new details announced by the minister, loans under the scheme will range from €25,000 to €3 million per eligible applicant, with loans of up €500,000 unsecured. Loan periods of seven to 10 years will be made available for investment loans, and five to 10 years for financing debt management. Interest rates will be “competitive”.
The cost of the scheme is jointly met by Minister Varadkar’s department and the Department of Agriculture, Food and the Marine, on a 60:40 basis, meaning 40% of the funding is ring-fenced for farmers and food SMEs.
Altering the scheme requires new legislation, which is in the process of being drafted, Minister Varadkar said.
The minister also announced changes and expanded funding to a number of other schemes and measures that effect the agri-sector.
This includes the Working Capital Scheme, which was originally announced as part of Budget 2018, but has also been revised to assist in dealing with the economic fallout of Covid-19.
It will receive an additional €250 million in funds, with its overall funding co-financed by Minister Varadkar’s department and the Department of Agriculture on a 60:40 basis, as with the FGLS.
The scheme provides loans from €25,000 up to €1.5 million, with the first €500,000 unsecured, and a maximum interest rate of 4%.
Primary producers are entitled to apply for the Microfinance Ireland loan scheme (for which the maximum loan amount has been increased to €50,000 for businesses impacted by Covid-19), as well as the already-in-place Credit Guarantee Scheme.