‘Particular concern’ for SMEs as winter comes – Varadkar
Minister for Enterprise, Trade and Employment, Leo Varadkar, has said there is “particular concern” for survival rates among small and medium businesses (SMEs) as winter approaches.
Speaking at the launch of the Government’s Covid-19 Restart Plus grant for small businesses, Mr Varadkar said: “Then we would have a concern in spring, when the wage subsidy scheme ends, that this may be a pinch point for companies.”
There are currently over 248,000 SMEs in Ireland employing people in cities, towns and villages across the country, according to figures from the Irish SME Association (Isme).
Mr Varadkar said his department does not have up-to-date figures on the insolvency rates among SMEs. However, he said he’s heard anecdotally of a number of firms that have tried to reopen for business but found “they can’t get by or can’t make money”.
“I don’t have up-to-date numbers on insolvencies, but it is something that we will monitor,” he said.
Yesterday, Mr Varadkar also warned that a very strong economic recovery next year following the Covid-19 lockdown now looks less certain.
The country’s economy – which had been the fastest growing in Europe before the pandemic hit – is forecast to contract by 10.5pc this year and bounce back by 6pc next year, the Department of Finance predicted in April.
“I think, to be frank, the economic impact is going to be a lot worse than you or I may have thought back in March or April or when the Government was formed [in June],” Minister Varadkar said on Newstalk.
“Back in March or April I would have said this is going to be a three-month phenomenon, a single-quarter severe hit to the economy and that we would be in a very strong recovery by next year. That now looks less certain.”
The Government is currently paying the pandemic unemployment payment to 262,500 people, down from a lockdown peak of 600,000. A further 370,000 employees are being supported by a wage-subsidy scheme.
The Covid-19 Restart Grant Plus, which was announced as part of the July stimulus, increases the maximum grant available to SMEs to €25,000 from €10,000 – in order to help firms recover. The minimum grant has increased to €4,000 from €2,000.
Companies with up to 250 employees can now apply, where previously the grant was for businesses with fewer than 50 staff.
“I’d like people to see this [grant] as part of a wider package,” Minister Varadkar said.
“There are other supports as well, for example: the wage subsidy scheme, the Vat cut, the rates holiday for six months, it’s a really big package for business. We are open to doing more, but that is a matter for the budget in October,” he added.
The grants are being run by the local authorities and the Government is aiming for decisions to be made on applications within two weeks. However, he said in some cases it might take “a few more weeks”.
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