Plan’s loan focus won’t help: ISME

SMALL and medium-business lobby ISME has welcomed the Government’s stimulus package but said it fears it won’t go far enough.

ISME said the number of businesses that fear closure in the next six months has fallen – from 69 per cent to 37 per cent – but add it is clear many will not survive the pandemic.

While the stimulus plan is welcome, ISME said its primary focus on loans rather than grants will not suit many struggling SMEs.

“It is in this context that many of the liquidity measures announced in the July Stimulus have fallen short: the majority of measures announced are debt-based at a time when both

SMEs and their lenders are sceptical about their ability to repay lending,” said ISME CEO Neil McDonnell.

“While the wage subsidy scheme has reduced the rate of cash burn for businesses, it can only be used to service payroll costs, not to pay down debt. And the grant element of €300m makes up only four per cent of the total package,” he said.

“ISME hopes to see a strong take-up of the measures announced by Government in the July Stimulus, and we will be assisting SMEs in accessing those funds to the best of their ability. But ISME believes that more robust measures will be required sby surviving businesses come the October budget”.