Massive supports needed for businesses to survive – Chamber
BUSINESS owners across Co Wexford are not getting the supports they need to survive during the coronavirus, according to County Wexford Chamber President Sean Reidy.
Mr Reidy said: ‘The focus now is on how we can stand still without going backwards too much. There are a lot of businesses on the edge and they will find it difficult to recover. There will be a lot of supports needed at that point to get businesses up and running again and that is going to be really challenging.’
Mr Reidy said: ‘The crisis is having a devastating effect on small and medium size businesses. Most of them are having to close their doors and let workers go. Our members’ businesses are being devastated but business owners will act in the national interest and in the interest of the health and welfare of their staff. All of us have a duty to play a part in delaying its spread by social distancing, we all need to act together by staying apart and heeding the advice of Government. But the SME sector needs help.’
He said there is still a lack of tangible and meaningful supports for businesses from Government to date.
‘For micro businesses, we in the Chamber are supportive of the Microfinance Ireland loans being increased to €50,000 as they are relatively easy to access but this is not enough. Almost one week ago the Deptartment of Business announced a €200m SBCI Covid-19 Working Capital Scheme. This scheme is still not even open for applications. This should be fast-tracked and made user friendly. As this is channelled through the pillar banks, Government should instruct them to release funds immediately on approval by the Strategic Bank. Britain has proposed a €330 billion fund. €200m is an awful long way from that. Finance Minister Pascal Donohoe is talking about releasing €1 billion which, in turn, would trigger liquidity of €10 billion when everything gets up and running again.’
He said among other measures, businesses need the following additional supports:
A wage subsidy scheme whereby the Government subsidises wages by providing a payment of €250 per week to businesses in respect of every full time employee.
Payments to Revenue need to be suspended for six months.
Commercial rates need to be waived for the next 12 months, as is the case in the UK.
Government needs to mandate the banks to provide a six month loan repayment holiday to businesses.
He said: ‘Waiving rates for three months, as suggested, is unrealistic. To expect businesses forced to close to bankroll its laid off employees social welfare payments is also totally unrealistic. Most businesses are laying off staff because they have to cease trading. To expect these businesses to bankroll the unemployment benefits for six weeks would be impossible for them, even if they can reclaim it.’
A short term social solidarity parachute payment to every citizen over 18 equivalent to unemployment benefit should be considered, he added.
He said whenever the Covid-19 crisis ends national Government will need to subsidise local authorities who will be at a major loss in rates.
‘Everyone is just reacting at the prospect of a short term hit. At Spring and summer time most businesses – including the tourism industry – are having their best time. The Government have talked about a three month loan repayment break but it’s not a holiday as interest will accrue. Every business and company keeping their enterprises at the moment should get a €250 a week payment as it keeps moment in circulation and promote productivity.’
He said job losses in retail businesses across the county ‘must be horrendous’.
‘I am involved in a business in Limerick. We are making a sci-fi film for Apple. A fortnight ago we won Business of the Year in Co Limerick and the week after Donald Trump announced the travel ban so all the actors had to return to America so we had to lay our seven staff off, temporarily. This is almost unprecedented and it’s very hard to know. Health is number one.
‘Hopefully we will come through this eventually. We will have a very different societal and business landscape in its wake. Social solidarity and environmental sustainability will need to be at the centre of the recovery. But most of all for the moment we all need to keep each other as safe as possible. In the meantime County Wexford Chamber will keep its website updated with the latest news on reliefs for businesses and CEO Chamber CEO Fiona Lewis urged business owners to talk to their bank.’
Ms Lewis said: ‘All the banks have announced that they will offer flexibility to their customers and they may be able to provide payment holidays or emergency working capital facilities.’
She urged Wexford businesspeople to take immediate steps to manage cashflows. Look for scope to: ‘lower variable costs, delay discretionary spend, extend your payables, expedite your receivables, explore supply chain financing options, use available government supports for working capital, get advice – County Wexford Chamber will help anyway we can get advice from your accountant or use the advisory support available from your local LEO.’
She also advised people to check their insurance cover. ‘Check if your insurance policy covers you for an interruption in your business, or a temporary business closure, caused by COVID-19. Engage with Revenue – do not ignore your tax liability. If you have concerns about your ability to pay your tax liabilities speak to the Revenue Commissioners.’
She said Revenue will engage with viable businesses experiencing temporary cash flow or trading difficulties that affect the timely payment of tax.
Ms Lewis asked business owners to be aware of government supports.
‘Employees of businesses that need to reduce hours or days worked can avail of the Department of Employment Affairs and Social Protection Short-time Work Support. For those workers who have been laid off without pay, there is no need to visit an Intreo Centre. The DEASP has introduced a new support payment for the self-employed who have lost business and to those who have lost employment as a result of the COVID-19 pandemic, the COVID-19 Pandemic Unemployment Payment. This support pays a flat rate of €203 per week for a six-week period. Government is asking those employers who have ceased trading if at all possible, to continue to pay workers during this period – at least at the jobseeker rate of €203 per week.’
The Department of Employment Affairs and Social Protection is setting up a refund scheme for employers to pay staff the €203 per week for each worker. This means that workers retain their link with employers and there is no need for them to submit a Jobseekers claim.
The full range of Enterprise Ireland, IDA Ireland, Local Enterprise Office and Údarás na Gaeltachta grant supports will be available to firms to help with strategies to innovate, diversify markets and supply chains and to improve competitiveness, she said.
‘The Department of Employment Affairs and Social Protection and the Department of Business, Enterprise and Innovation will provide a joint First Responder support service through the Intreo Offices and development agencies, Enterprise Ireland and IDA Ireland in each region to provide tailored supports for impacted firms, with objective of avoiding mass lay-offs and buying time for firms to work through the short-term disruptions.’
Sole traders and companies with up to nine employees in need of microfinancing will see the maximum available amount for immediate loans increase from €25,000 to €50,000. Loans are available at an interest rate of between 6.8 per cent and 7.8 per cent. Businesses can apply through their Local Enterprise
Office or directly at microfinanceireland.ie. Eligibility criteria apply.
A Finance in Focus grant of up to €7,200 available to Enterprise Ireland and Údarás na Gaeltachta clients that want to access consultancy support to undertake immediate finance reviews/and or support financial planning.
Vouchers for business continuity preparedness, innovation and productivity will be available through Local Enterprise Offices in every local authority area. Every local authority will be providing vouchers from €2,500 up to €10,000 (with 50:50 match funding), in addition to their current range of business supports to microenterprises.
The Chamber also has information on other important supports on its website.
AT SPRING AND SUMMER TIME MOST BUSINESSES – INCLUDING THE TOURISM INDUSTRY – ARE HAVING THEIR BEST TIME