Half of firms fear closure as calls for €3bn scheme mount

Warning that supports available are not adequate to tackle scale of problem

ALMOST half of Irish businesses believe that they will be out of business within six months if the current situation continues, according to a new survey.

The survey comes as pressure mounts on the Government to provide a grant scheme to adequately support the liquidity of the more than 250,000 small and medium enterprises in the country.

Representative body ISME, which carried out the survey over the past week, has asked the Government to provide an average grant of about €20,000 to every Irish SME – a rescue programme that would cost the Exchequer well over €3bn.

ISME chief executive Neil McDonnell told the Sunday Independent that many smaller companies were unable to access the emergency supports in place because they were unsuitable and too expensive.

McDonnell said that there seemed to be “an ideological rather than an intellectual aversion” in the Department of Public Expenditure and Reform to the idea of providing substantial grant aid to SMEs.

Asked to comment, a spokeswoman said the department had noted the finding of the ISME survey. In a statement it listed a range of supports that the Government had introduced, including the €2bn Pandemic Stabilisation and Recovery Fund within the Ireland Strategic Investment Fund (ISIF) and a €2bn Covid-19 Credit Guarantee Scheme to support lending to SMEs. “This department gives due consideration to all possible options in relation to supporting enterprises as they seek to resume activity,” she said.

But the ISME survey showed that while 60pc of firms had availed of the wage subsidy scheme and about 25pc had availed of the Pandemic unemployment payment and Revenue forbearance, very few had availed of other State supports.

Fianna Fáil spokesman on business, enterprise and innovation Robert Troy said that the supports available were not adequate and from a liquidity perspective were “cumbersome, too expensive and not suitable for companies that were risk averse”.

Ireland was an outlier on providing direct support to small businesses through the pandemic period, he said.

“My fear is that if we don’t look at this drastically then we are going to see more and more businesses closing, more and more jobs going and instead of investing in businesses now we are going to be paying an additional Social Welfare bill later in the year.”