The Government has agreed a series of measures to support small, medium and large businesses recover after the impact of Covid-19.
After the announcement of the phased reopening of the Irish economy, the government said it “recognises that businesses require significant additional supports”.
Businesses who were forced to cease trading and others affected adversely from Covid-19 had been calling on the government to provide supports to help them deal with the unprecedented crisis.
The measures to support business announced today include:
A €10,000 “restart grant” for micro and small businesses based on a rates/waiver rebate from 2019.
A three-month commercial rates waiver for impacted businesses.
A €2 billion “Pandemic Stabilisation and Recovery Fund” within the Irish Strategic Investment Fund which will make capital available to medium and large enterprises on commercial terms.
A €2 billion credit guarantee scheme to support lending for SMEs for terms ranging from three months to six years that will be below market interest rates.
The “warehousing” of tax liabilities for a period of twelve months after the recommencement of trading during which time there will be no debt enforcement action taken by Revenue and no interest charge accruing in respect of the warehouse debt.
Minister for Finance Paschal Donohoe said that he appreciates “the massive economic and social challenges” for those out of work and said these measures today would help to rebuild “our jobs, our incomes and our economic health”.
He added: “We believe these are significant measures that will make a difference to the retention of jobs, and the creation of new jobs.”
On the specific call from pubs, restaurants and tourism sectors to reduce the VAT rate on the hospitality industry, Minister Donohoe said a decision had not been taken on that measure yet as – according to the roadmap - it’ll be some time before they reopen.
The measures will cost around €6.5 billion in all.
The government has also committed to local authorities to make up the shortfall on rates, so that these local authorities can still provide services to the public.
Minister for Business Heather Humphreys said: “We now have a comprehensive suite of supports for firms of all sizes, which includes grants, low-cost loans, write-off of commercial rates and deferred tax liabilities, all of which will help to improve cashflow amongst our SMEs.”
Humphreys said advice from Health and Safety Authority is available to those businesses looking to ensure they can enforce health guidelines when they go back to work.
SME credit supports
The credit guarantee scheme for SMEs will cost €2 billion.
Under this scheme, it’ll provide an 80% guarantee on leding to SMEs until the end of this year, for terms between three months to six years.
SMEs will be able to go directly to the banks in the Scheme, and the guarantee can be used for a wide range of lending products between €10,000 and €1 million.
The loans will have interest rates below current market rates, and the government said this is a “major component” of its strategy to support SMEs.
It will require legislation, and the drafting of this has already been approved. However, for legislation to pass, a new government must be formed as the Seanad cannot sit until the new Taoiseach nominates new members to the upper house.
Minister Donohoe acknowledged this was the case, and said a number of decisions had been made and would be made that would have to be ratified by the Dáil and the Seanad.