Government Supports for COVID-19 impacted businesses
In this testing time and as an SME owner who has also been effected by COVID-19, I wanted to share a few sources of information and useful steps that we have found helpful to date.
With the Irish COVID-19 landscape evolving on a daily basis, we will try to keep this blog as up to date as possible. As of the 20th March, the below information is up to date however we understand that government officials are meeting to discuss a further stimulus package which could resemble the recently announced packages in the UK, French and US governments.
If, like many businesses, you have also been impacted by COVID-19 then take a look at the below practical steps which might bring about some relief.
Talk to your bank
Having met with government officials, all 5 of the pain banks in Ireland have agreed to offer support to businesses in need. This can be in the form of a moratorium on business loans or additional credit facilities.
Banks are working to ensure a wide range of credit, cash flow and supply chain supports are offered to businesses who are trying to manage the pressures arising from COVID-19. A deferral of up to 3-months on loan repayments will be of assistance to many businesses. in addition, the banks are adopting a customer-focused approach to these businesses with a wide variety of tailored supports including extensions of credit lines, risk guarantees, and trade finance.
Quickly review company liquidity and project CashFlow for 3-6 months
Look for scope to:
Lower variable costs
Delay discretionary spend
Extend your payables
Expedite your receivables
Explore supply chain financing options
Seek professional advice
Get advice from your accountant and lawyers, both of which will receive regular official updates from Revenue and Government bodies.
Use available government supports for working capital
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. Eligibility criteria apply
Microenterprises 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. Eligibility criteria for these specific COVID 19 loans are as follows:
Your business is a micro-enterprise (fewer than 10 employees and up to €2m annual turnover) AND
You are having difficulty in accessing finance from Banks and other commercial lending providers, AND
Your business is currently negatively impacted or may be impacted by COVID-19 resulting in a reduction of 15% or more in turnover or profit
As every business situation is different, if you do not meet the above eligibility criteria, you may be eligible to apply for one of their other standard loan packages with more information on their website.
The €200m SBCI COVID-19 Working Capital Scheme for eligible businesses will be available within the next week. Maximum loan size will be €1.5 million (first €500,000 unsecured) and the maximum interest rate will be 4%. Applications can be made through the SBCI website at sbci.gov.ie. Eligibility criteria apply.
A €200m Package for Enterprise Supports including a Rescue and Restructuring Scheme is available through Enterprise Ireland for vulnerable but viable firms that need to restructure or transform their business.
Check your insurance cover
Check if your insurance policy covers you for an interruption in your business, or a temporary business closure, caused by COVID-19.
Engage with Revenue
If you have concerns about your ability to pay your tax liabilities speak to the Revenue Commissioners, see www.revenue.ie.
Current measures in place:
Tax Returns:businesses experiencing temporary cash flow difficulties should continue to send in tax returns on time.
Application of Interest: the application of interest on late payments is suspended for January/February VAT and both February and March PAYE (Employers) liabilities.
Debt Enforcement: All debt enforcement activity is suspended until further notice.
Tax Clearance: current tax clearance status will remain in place for all businesses over the coming months.
Revenue has also posted advice for businesses experiencing trading difficulties as a result of COVID-19. This includes information on tax returns, the application of late payment interest, debt enforcement, tax clearance and customs.
Have you looked into new Government supports?
Employees of businesses that need to reduce hours or days worked can avail of the Department of Employment Affairs and Social Protection Short-time Work Support.
Government is asking those employers who have ceased trading if at all possible, to continue to pay workers during this period – at least at the jobseeker rate of €203 per week. The Department of Employment Affairs and Social Protection is setting up a refund scheme for employers to pay staff the €203 per week for each worker. This means that workers retain their link with employers and there is no need for them to submit a Jobseekers claim.
For those workers who have been laid off without pay, there is no need to visit an Intreo Centre. The DEASP has introduced a new support payment for the self-employed who have lost business and to those who have lost employment as a result of the COVID-19 pandemic, the COVID-19 Pandemic Unemployment Payment. This support pays a flat rate of €203 per week for a six-week period.
The full range of Enterprise Ireland, IDA Ireland, Local Enterprise Office and Údarás na Gaeltachta grant supports will be available to firms to help with strategies to innovate, diversify markets and supply chains and to improve competitiveness.
The Department of Employment Affairs and Social Protection and the Department of Business, Enterprise and Innovation will provide a joint First Responder support service through the Intreo Offices and development agencies, Enterprise Ireland and IDA Ireland in each region to provide tailored supports for impacted firms, with objective of avoiding mass lay-offs and buying time for firms to work through the short-term disruptions.
A Finance in Focus grant of €7,200 will be available to Enterprise Ireland and Údarás na Gaeltachta clients that want to access consultancy support to undertake immediate finance reviews.
In addition to their current range of business supports to microenterprises, LEOs can also provide business continuity vouchers from €2,500 to assist in preparing any business continuity issues that arise in the current challenging environment.
Enterprise Ireland has published a COVID-19 Business Response Plan.
As it stands, the above information is accurate but we will do our best to share up to date news, insights and relevant information across our social media channels and website.