Supports for business in the current climate
In the wake of the current Covid-19 pandemic, businesses are facing truly unprecedented times. This is definitely an unexpected challenge that came out of left-field. Many businesses have weathered the storm through lengthy recessions and come out the other side, let’s be hopeful that this phase, while extremely challenging, is only temporary. This phase has unfortunately lead to some businesses having to shutdown completely, others to operate on a smaller scale and others to work remotely or behind closed doors.
Whatever industry your business falls into, here are some practical steps, supports and guidance to help your business:
Talk to your bank
All the banks have announced that they will offer flexibility to their customers, and they may be able to provide payment holidays or emergency working capital facilities. We advise to contact your Business Advisor in branch as soon as possible in an effort to negotiate an action plan adapted to your particular business.
The main non-bank lenders also confirmed their intention to also support the range of measures announced by the country’s main retail banks which is to be welcomed.
A deferral of up to 3-months on loan repayments will be available to many businesses. In addition, the banks are adopting a customer-focussed approach to these businesses with a wide variety of tailored supports including extensions of credit lines, risk guarantees, and trade finance. These supports complement the range of government supports available through the Strategic Banking Corporation of Ireland.
The Central bank has confirmed that it will allow banks to dip into their rainy-day capital reserves to keep lending flowing. It is anticipated that this move could free up considerable additional credit for households and businesses.
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.
Get advice
Get advice from your accountant, solicitor, tax consultant and other professionals. There are lots of emergency legislative and supportive measures recently enacted to assist people in this testing time and you should contact the relevant professional to advise you further. The team at Healy Crowley Ahern will be happy to assist.
Commercial Rents and Rates
As regards payment of commercial rents, it is suggested that landlords and tenants should discuss a path forward. It could be a case that there is a reduction in rent for a period or deferral of payment for an agreed time. In order to keep the economy going, where people can afford to pay even a contribution this will go towards keeping as many establishments in ‘business as usual’. It is very much a case by case basis. Where trade has ceased entirely, a deferral of payment may be suggested. Given that these are unprecedented times, it would be hoped that people will afford each other a degree of flexibility provided it is exercised in good faith by all parties.
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. The terms include a six months interest free and repayment free moratorium, with the loan to then be repaid over the remaining 30 months of the 36-month loan period. 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 apply.
- The €200m SBCI COVID-19 Working Capital Scheme for eligible businesses supports loans from €25,000 up to €1.5 million (first €500,000 unsecured) with a maximum interest rate of 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.
Engage with Revenue
Taxation Measures to alleviate short-term difficulties: Revenue has also posted specific advice for businesses experiencing trading difficulties as a result of COVID-19 including information on tax returns, the application of late payment interest, debt enforcement, tax clearance and customs.
Be aware of other government supports in respect of your employees
- The government has announced a National COVID-19 Income Support Scheme. This provides financial support to Irish workers and businesses affected by the crisis.
- COVID-19 Wage Subsidy Scheme: The COVID-19 Wage Subsidy Scheme enables employees, whose employers are affected by the pandemic, to receive significant supports directly from their employer through the payroll system. The scheme is operated by Revenue and is expected to last 12 weeks from 26 March 2020.
- Pandemic Unemployment Payment: The COVID-19 Pandemic Unemployment Payment is a payment of €350 per week. It is available to all employees and the self-employed who have lost their job due to the COVID-19 pandemic
- COVID-19 Wage Subsidy Scheme: The COVID-19 Wage Subsidy Scheme enables employees, whose employers are affected by the pandemic, to receive significant supports directly from their employer through the payroll system. The scheme is operated by Revenue and is expected to last 12 weeks from 26 March 2020.
- Short-time Work Support: 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.
For those businesses who are still operating ‘business as usual’, albeit in an improvised manner, the following is of note:
Respond: Business Continuity Planning COVID-19 Checklist
The Department of Business, Enterprise and Innovation has updated its checklist on Business Continuity Planning which provides a checklist for businesses in responding to COVID-19.
Essential Service Providers
A list of essential service providers under new public health guidelines was published on 28 March 2020.
Essential Retail Outlets
The National Public Health Emergency Team (NPHET) has recommended that all non-essential retail outlets close to members of the public. All other retail outlets are to implement social distancing.
While, this is a unique challenge for everyone, the main thing is to keep the communication lines open between all parties and to support each other. We are a notoriously resilient nation and by working together and supporting each other, we can hopefully keep the country afloat!
We hope you have found this information of use and please contact Colm Kelly or Orla Howe for any further queries.