Small firms on cusp of disaster
Restaurants chief calls for relief to save the industry
BANKS, landlords and utility companies are putting pressure on Covid-hit small businesses to pay up as they struggle to remain open, a Dáil committee has heard.
The Restaurants Association of Ireland (RAI) has said owners are facing demands for 100% of their rent, bills and utility payments.
RAI chief Adrian Cummins said the industry is seeking rent cuts from landlords, official grants and greater flexibility from banks and utility companies.
He told the special Covid-19 Oireachtas Committee yesterday: ‘Unless we get a July stimulus package, 50% of the restaurants will close and some have not even got to the starting line – they have closed already.’
Utility companies have been ‘targeting’ smaller, cash-strapped businesses for big deposits, he said. ‘There are some utility services now demanding payment upfront and they are targeting the restaurant industry for large deposits for connections.
‘We are being singled out as a sector in this respect. We have spoken to the regulator and identified that this is an issue.
‘We are being targeted by some but not all utility providers, and they seem to be targeting smaller businesses as opposed to larger ones.
‘Businesses do not have the cash deposits required,’ Mr Cummins added.
He called on banks, landlords and utility companies to ‘step up to the plate’ and help struggling businesses.
‘There has been no assurance by the banks for our sector in particular. We should remember the Irish people bailed out the Irish banks to the tune of €65billion and the banks must do a little more to help SMEs across the country,’ he said. ‘Everybody must step up to the plate in this crisis, including the banks, landlords and utility providers. We need some sort of burden-sharing for the landlords where everyone has to take a cut.’
Mr Cummins’s organisation has more than 2,000 members, from restaurants to gastropubs and coffee shops.
He said eateries which would not reopen included those catering for tourists in places such as West Cork and Connemara.
Mr Cummins said: ‘This is so serious and we need that package of measures, grant aid, temporary wage supplement scheme.’
The Government needs to inject €15billion, some €6billion of which needs to be paid out immediately, into SMEs if they are to recover, TDs were told.
The chair of SME Recovery Ireland, John Moran, told Dáil deputies that only €100million of the €6.5billion fund set up by the Government
had been paid out to SMEs and that a new system with easier access was needed.
‘SMEs are critically important to the fabric of Ireland right across our rural communities and in our cities. We need to recapitalise them. We think that is €15billion, with €6billion released immediately as liquidity,’ he said.
His words were echoed by Padraig Cribben, chief executive of the Vintners’ Federation of Ireland, who said: ‘This is not something that can wait, this is not something that can be long-fingered. There is no point in coming in with something in the budget in October.
‘Everything needs to be in the July stimulus so that people can see what they are facing and can plan properly.’
RAI chief John Moran added that
‘Targeted by some utility providers’ ‘Everything needs to be in stimulus’
a second wave of Covid-19 could be ‘absolutely devastating’ to small-tomedium businesses up and down the country, pointing to Leicester in England where an explosion of Covid-19 cases has led to a second lockdown.
‘The mayor of Leicester was describing the fact that now, because of the lockdown, balance sheets and businesses in Leicester will be disproportionately harmed,’ he said.
Mr Moran highlighted the importance that the money be given out through a grant scheme and that no debt should be incurred by the businesses. ‘We need the State to release a large scheme of grant aid,’ he added.
The new Minister for Public Expenditure, Michael McGrath, told Today FM that there was ‘a lot of merit’ in Mr Moran’s proposals.
He said: ‘I have engaged with John [Moran] and his team, and they’ve put in a huge amount of work into the SME recovery proposals. I think there is a lot of merit in proposals they have. There are a variety of working capital schemes there at the moment and they are being examined to see if we can improve them.
‘The duration of the loans, for example, can you give a longer period where no repayment is required to give the breathing space to firms.’