The Irish Government announced extensive new public health restrictions today which will have a drastic impact for many businesses. Naturally, this may pose challenges for businesses that have loan obligations to meet.
These loan difficulties may be manifested in missed loan repayments, or it could lead to financial covenant breaches. Most loan agreements will also contain a “material adverse change” event of default which a bank may argue is triggered by the wider COVID-19 crisis as a means to demand early repayment of a loan or to prevent any further drawdowns. 
The Banking & Payments Federation Ireland announced a joint plan with the Irish retail banks on 18 March 2020 to support borrowers that may be adversely impacted by COVID-19. Amongst other things, that plan included a payment break for borrowers of up to 3 months during which time, no repayments of interest or capital would be required. The interest and any other fees due on the loan during that moratorium period would however continue to accrue. It would be up to the individual banks and borrowers to reach agreement on whether those deferred interest and fee payments would be repayable over the original loan term leading to increased repayments at the end of that 3 month period or whether the original loan term would be extended by 3 months. The plan announced also involves the deferral of court proceedings for 3 months. It is apparent that while the plan offers a potential welcome temporary relief for borrowers, it may not go far enough for borrowers if the effects of the COVID-19 crisis on their business are more protracted than that initial 3 month period contemplates.
It may be necessary for borrowers to reach further waivers and amendments with their bank to restructure their loans on a more permanent basis to reflect their changed business prospects. Banks may be willing to reach such agreements on a case by case basis, but potentially, they might seek additional security collateral, equity injections and/or guarantees from directors/shareholders in return for their forbearance. It is important that a borrower takes legal advice on the effect of agreeing to any such debt restructuring.