Coronavirus: €400m package for businesses unveiled

Government has provided details of supports available to firms grappling with the crisis

Taoiseach Leo Varadkar with Cabinet colleagues Simon Harris and Heather Humphreys, as well as Tony Holohan, chief medical officer, following the meeting of the Cabinet sub-committee on Covid-19. Photograph: Dara Mac Dónaill / The Irish Times

Taoiseach Leo Varadkar with Cabinet colleagues Simon Harris and Heather Humphreys, as well as Tony Holohan, chief medical officer, following the meeting of the Cabinet sub-committee on Covid-19. Photograph: Dara Mac Dónaill / The Irish Times

 

The Government has unveiled a package of supports for businesses grappling with the fallout from coronavirus, including a 200 million liquidity fund as fears grow for the viability of some companies.

The Department of Business, Enterprise and Innovation said on Tuesday that loans of up to 1.5 million will be available at reduced rates, with up to the first 500,000 unsecured.

The loans will be made available through the Strategic Banking Corporation of Ireland (SBCI)’s Covid-19 Working Capital Scheme.

Minister for Business Heather Humphreys will also meet the pillar banks this week, while Enterprise Ireland is to activate a €200 million “rescue and restructuring scheme” for vulnerable but viable companies.

The department said vouchers from 2,500 up to 10,000 for “business continuity preparedness, innovation and productivity” would also be available through the Local Enterprise Offices in every county.

A specific “finance in focus” grant of 7,200 will also be available to Enterprise Ireland and Údarás na Gaeltachta clients that need consultancy support to undertake immediate finance reviews.

The department’s credit guarantee scheme will be available specifically to Covid-19 impacted businesses through the pillar banks. Loans of up to 1 million will be available over terms of up to seven years.

The threshold for lending through MicroFinance Ireland will be increased from 25,000 to 50,000 as an immediate measure to “specifically deal with exceptional circumstances” that micro-enterprises are facing.

The Department of Business is also working with the European Commission on additional changes to state aid rules to ensure enterprise development agencies can respond effectively.

Ibec chief executive Danny McCoy said the health issues posed by Covid-19 require a “whole of society approach”.

“Business must take a strong leadership role and support whatever measures are required to address this unprecedented health challenge,” he said.

ISME chief executive Neil McDonnell said the main issue facing small and medium sized enterprises will be the provision of working capital supports for person-to-person businesses and others such as manufacturing and construction where “working from home is not an option”.

One of the industries hardest hit by Covid-19 is the hospitality and tourism sector. Elaina Fitzgerald Kane, president of the Irish Hotels Federation (IHF), said the disease “poses enormous challenges” for the hotels sector and the wider economy.

“Our members are already reporting increased levels of coronavirus related cancellations and we expect they will increase further with the cancellation of St Patrick’s Day events,” she said.

“The IHF is calling for the immediate implementation of measures that will assist with cash flow for those businesses facing short-term problems as well as a reduction in the rates of VAT, PAYE and PRSI, and arrangements for the deferral of these payments.

“We also call on the Government to waive local authority rates until this crisis is over, together with the introduction of direct business supports including finance and marketing assistance.”

Restaurants Association of Ireland chief executive Adrian Cummins said Covid-19 is “set to hit Irish restaurants hard”.

“We are already seeing a drop in bookings for the coming months and an increase in cancellations,” he said. “Decisive action needs to be taken immediately by the Government.

“My members need to know that the Government supports them in this crisis and that the survival of Irish businesses is a top priority.”

He said the RAI’s “top four asks” from the Government include the immediate reduction of the VAT rate in the sector to 9 per cent for a minimum period of six months, as well as a moratorium on VAT payments by the Revenue Commissioners.

He also called on Irish banks to defer loan repayments for at least six months, and said employer PRSI must be halved.

“These measures are essential, and we are demanding that the Government immediately implement these emergency business supports to prevent closures and job losses,” he said. “Restaurants need this small reprieve from the crippling costs of doing business.”