SMEs require further liquidity supports or tens of thousands of jobs will be permanently lost – Pearse Doherty TD
Sinn Féin Finance spokesperson Pearse Doherty has called for further liquidity supports to be provided to SMEs impacted by the COVID-19 outbreak, warning that failure to support the SME sector will see businesses fail and jobs permanently lost.
Despite over 200 thousand SMEs employing over 750 thousand workers in affected sectors, only 209 COVID-19 loans have been approved through Microfinance Ireland or the COVID-19 Working Capital Loan Scheme.
Teachta Doherty said:
“The key task of Government, in addition to halting the spread of this virus, is to contain its economic damage.
“That requires income support for workers, but also ensuring that as many employers and viable businesses survive this crisis as possible.
“Our SMEs, particularly in hospitality, tourism and retail, are under threat; and with them thousands of jobs.
“SMEs employ over 1 million people in the State, with the Central Bank estimating that nearly 80 percent have been affected by the COVID-19 pandemic. Without support, many of them will not survive, with catastrophic implications for employment.
“The Central Bank projects that our SMEs will require at least €2.4 billion in the next three months. At present, Government supports fall far short of this requirement, with limited take-up in the schemes currently in place.
“Despite over 200 thousand SMEs employing over 750 thousand workers having been affected by COVID-19, only 56 loans have been approved through the COVID-19 Working Capital Loan Scheme.
“Only 153 COVID-19 loans have been approved through Microfinance Ireland.
“It is clear that supports are insufficient in scale and too difficult to access for SMEs.
“The Department of Finance in the North has provided grants ranging from £10,000 to £25,000 to more than 17,000 SMEs since the 26th March. Government should now consider immediate liquidity supports to our SMEs in the form of targeted grants.
“In addition to this, it is clear that existing schemes are not working for SMEs, with low levels of take-up and applications.
“Both the Credit Guarantee and Working Capital Loan Schemes should be reformed for SMEs with zero-interest applied to loans and, where necessary, 100 percent State-guarantees.
“Unless supports for SMEs are increased and improved, what began as business interruption will end in business failure and permanent job loss.”