On Friday 27th March the Irish Government announced further restrictions on the movement of citizens which effectively ordered non-essential workers to stay in their homes until 12th April.
These measures were announced shortly after the Emergency Measures in the Public Interest (Covid-19) Act came into effect. The Act brought some welcome news for businesses throughout the country. While the new restrictions will no doubt cause greater uncertainty and concern for already struggling small-to-medium enterprises (SMEs) during this already difficult time. SMEs are particularly vulnerable in any economic crisis with concerns around cash-flow and trading. Below, we list some practical steps SMEs can take to stay afloat for the next few months.
SMEs should contact their banks as soon as possible if they are experiencing any financial difficulty. All major banks recently announced that they will offer support to their customers by providing 3 month payment holidays or emergency working capital facilities.
SMEs should also check if their insurance policy covers them for business interruption or a temporary business closure caused by Covid-19.
During this emergency period, SMEs should consider the government supports available for working capital. For example, the Credit Guarantee Scheme supports loans up to €1 million for periods of up to 7 years. Applications can be made to AIB, Bank of Ireland and Ulster Bank.
Small enterprises can access Covid-19 loans of up to €50,000 from MicroFinance Ireland. Loans are available at an interest rate of between 6.8% and 7.8%. Businesses can apply through their Local Enterprise Office or directly at microfinanceireland.ie.
The SBCI Covid-19 Working Capital Scheme for eligible businesses supports loans from €25,000 up to €1.5 million with a maximum interest rate of 4%. Applications can be made through the SBCI website at sbci.gov.ie.
Revenue has recently introduced a number of measures to assist businesses experiencing tax payment difficulties.
Revenue will not apply interest on late VAT returns from January and February 2020 due to SMEs experiencing financial issues caused by Covid-19. Interest has also been suspended on late payments of employers PAYE liabilities during February and March 2020.
However, revenue have stated that the measures adopted do not amount to permission to deter payment of taxes and that SMEs should continue to send in their tax returns on time and engage with Revenue as early as possible if they are encountering issues in tax payment.
No doubt, the fallout of the pandemic will push the country into recession. More supports will be required, past the proposed 12 week emergency period to get SMEs back on their feet. SMEs are an essential element of Ireland, accounting for over 50% of turnover.
About the author: Conor Robinson, Consultant
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