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State pledges extra €1bn in support for virus-hit SMEs

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Business Minister Heather Humphreys

Business Minister Heather Humphreys

Business Minister Heather Humphreys

The Government yesterday announced €1bn of extra support for firms hit by Covid-19 but admitted further measures will be needed to nurse businesses through a recovery.

Almost half of the package to support small and medium enterprises (SMEs) involves expansion of two loan schemes managed by the State-run Strategic Banking Corporation of Ireland (SBCI).

The SBCI will provide an extra €250m of lending for working capital and €200m of longer-term loans.

In addition, manufacturing and internationally traded SMEs with 10 employees or more will be eligible for advances of as much as €800,000 each from Enterprise Ireland, up to a fund size of €180m.

On a smaller scale, retailers hit by the Covid-19 lockdowns can avail of a €2,500 grant under the trading online voucher which can be used to develop online trading, though only if the retailer already has some online operation.

Microfinance Ireland, a lender to very small businesses, has been given €13m of extra funding and will slash interest  rates from 7.8pc to 4.5pc. Business Minister Heather Humphreys promised further measures for the "reboot stage" when the Covid-19 crisis is over.

"When the time comes, we will come forward with another suite of packages. But it's about providing the right suite at the right time," she said.

Difficulties faced by road hauliers collecting goods had been brought to her attention and the Government would deal with them to ensure continuity of the supply chain, she added.

Enterprise Ireland chief executive Julie Sinnamon said that liquidity was the major issue for businesses, but the agency does not have figures for the number of companies that will not survive.

"There are some sectors that are more challenged than others but I believe the package of supports is very significant in terms of the issues that have been raised by companies to us on a daily basis," she said.

Ms Humphreys said there was support for businesses who do not have any online presence through the trading online voucher for €2,500 that companies can already access from their Local Enterprise Offices.

The newer retail online scheme will be open to retailers employing over 10 people who already have a website to sell their goods.

"It's about deepening their online presence," she said.

Business groups including Ibec welcomed the rollout of new supports.

The Small Firms Association (SFA) earlier said Government needed to provide quick access to cash flow supports, VAT and rates holidays, and new debt forgiveness options to allow small firms "to survive and to bounce back".

SFA chairman Graham Byrne said small businesses' most urgent need was "a cash grant to enable them to meet current outgoings, 100pc relief on business rates for the remainder of 2020, and VAT deferral for the next two quarters".

Mr Byrne said the SBCI should provide €2bn of low-interest investment and working capital loans to small firms.

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