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SMEs call for more Govt funding to survive

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Source: – 30th June 2020 

The Oireachtas Special Committee on Covid-19 Response has heard calls for more help for small and medium businesses affected by the pandemic.

The Chair of SME Recovery Ireland, John Moran, told politicians that small and medium businesses across Ireland are dying and need more funding to help them to survive.

In his opening statement, Mr Moran called for a €15bn bailout, including an immediate injection of liquidity worth €6bn to help small and medium businesses impacted by Covid-19.

Mr Moran said the Government’s response has been “too slow, too small and too expensive” and that existing schemes must be restructured as grant aid and not debt.

He said the Government’s July stimulus package must make lower cost liquidity available immediately for firms and include a major fiscal grant scheme.

Mr Moran told the committee that small and medium businesses need cash and not mountains of debt.

He said the economic epicentre of this pandemic has been SMEs, with 85% of businesses having closed to some degree, of which 34% shut completely during lockdown.

Mr Moran said the State is not getting ahead of the problem and does not appear to have a handle on the huge cost of the pandemic to the SME sector.

Jean McCabe, managing director of fashion retailer Willow Boutique, told the committee that many businesses are opening up with significant debt.

She said that the trading environment going forward would be very difficult and taking on more debt is not possible.

She said business owners in fashion are at their “wits end” about whether to continue trading or not because the challenges facing them are so great.

Ms McCabe said businesses need cash and liquidity now.

Representatives of the hotel, pub and restaurant sectors told the committee that employment supports should be continued, and be extended to seasonal workers, and that ongoing assistance with commercial rates is needed.

Chief Executive of the Vintners Association of Ireland Padraig Cribben said this period has been difficult for pubs and turnover in the industry dropped to zero and said there is no indication as to when “normal trading” conditions will return.

The Irish Hotels Federation said it is vital that the Temporary Wage Subsidy Scheme is continued and extended to include seasonal employees, with Chief Executive Tim Fenn saying additional Government measures on liquidity and competitiveness are also required to protect tourism livelihoods.

He called for a reduction in tourism VAT to 5% until December 2021 followed by a permanent restoration to 9% to assist recovery.

Adrian Cummins, Chief Executive of the Irish Hotels Federation, said the restaurant and hospitality sector was hit hardest by this crisis and it will take the longest to recover.

He warned that without immediate access to the TWSS, seasonal businesses, the mainstay of Irish Tourism, will not reopen.

Our comment:

“We work with SMEs on a daily basis and have been for over 10 years – We are hearing the stories of pain they are going through and facing down the road, on a daily basis. The new Government need to take action. We have been delighted to work alongside John Moran and the team at SME Recovery over the past number of weeks.

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