Having met with the Tánaiste Leo Varadkar and Finance Minister Paschal Donohoe last week, ISME, the voice of Irish SMEs, looks forward to the substance of the July Stimulus, which is expected to be announced early next week.
As ISME has advised, and as has been acknowledged by Government, SMEs are extremely debt averse at present, and banks are reluctant to lend to them.
By far the most successful COVID-19 support provided to small business has been the Restart Grant, of which approximately €110m of approvals have already been made. However, this grant is currently available only to businesses that pay rates, and to a maximum of €10,000.
In the July Stimulus ISME would expect to see grants decoupled from rates, increased in size, and dispensed more quickly by the local authorities.
Following the meeting with the Tánaiste and Minister for Finance ISME CEO, Neil McDonnell said;
‘SMEs don’t want to borrow in the current environment, but where they must, loan rates have to be below 2%. The first year will need to be free of repayments and the State must guarantee up to 100% of the loan and repayment periods must extend well beyond three years.’
In order to retain as many people in employment as possible, ISME would expect to see an extension of the Temporary Wage Subsidy Scheme. Every worker who loses a job because of COVID-19 costs the State €10,556 per year in social welfare, not forgetting the knock-on loss of tax, PRSI and USC lost.
ISME also reminded the Tánaiste and Minister for Finance that SMEs provide three quarters of the jobs in the productive economy. It is therefore essential that Government does all it can to maintain the viability of as many small and medium businesses as possible.