The government has topped up Microfinance Ireland with €15m to reopen its Covid-19 Loan Fund. The relaunched scheme now offers a maximum loan value of €25,000, instead of the €50,000 upper loan limit in the original scheme.

MFI’s Covid-19 Loan Fund launched in March 2020, with €20m disbursed in low-cost loans to micro enterprises whose turnover was hit by the Covid-19 pandemic. The original scheme was fully subscribed by July, with almost 690 businesses availing of the loans.

Key features of the relaunched loan scheme include the €25,000 upper loan limit with a three-year term. Zero repayments and zero interest is charge for the first six months.

Interest paid between months seven and 12 will be refunded by the government in month 13, once all repayments in the preceding six months are paid in full. The measure effectively provides a 12-month interest-free period.

An interest rate of 4.5% is charged on MFI Covid-19 loans for applications made through Local Enterprise Office or other referral partners, or 5.5% APR for applications made directly to MFI.

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Garrett Stokes (pictured), CEO of Microfinance Ireland, said that the Covid-19 loan scheme reopened for applications from August 31 onwards. “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,” Stokes added.

The Covid-19 Loan Scheme is open to:

• Any business (sole trader, partnership or limited company) with fewer than 10 employees and annual turnover of up to €2m that was trading prior to the coronavirus pandemic in Ireland;
• Unable to secure finance from the bank or commercial lending provider;
• The business has been impacted by Covid-19 resulting in a 15% or more reduction in turnover or profit.