Specific SME supports in July Stimulus plan

We take a look at some of the specific SME supports in the July Stimulus in terms of grants and funds.

The much-anticipated July Stimulus Plan from the Irish Government contains €7.4bn worth of measures aimed at getting the economy up and running after the Covid-19 pandemic.

The plan includes more than €5bn in cash and €2bn in loan guarantees devised to keep businesses afloat and keep people at work.

“This series of additional initiatives will provide important targeted assistance to Irish companies as they stabilise, reset and recover from the impact of the Covid-19 pandemic and get ready for Brexit”

It consists of five key elements: €2.6bn in income support, including the wage subsidy and PUP (Pandemic Unemployment Payment) scheme; a €2bn credit guarantee scheme; some €1.3bn worth of tax measures; €1bn worth of business supports including training and education; and €500m worth of accelerated public investment.

A crucial lever in the plan includes cutting the main rate of VAT from 23pc to 21pc which will take place from September this year until February 2021.

Also crucial is the decision to extend the temporary wage subsidy to April next year but in a different shape that will involve lower payment rates to employers but will include newly hired staff as well as hiring of seasonal workers.

To boost the tourism sector, a “staycation” subsidy will allow people who spend €625 to claim back an income tax credit worth €125.

Among a raft of measures for SMEs is the provision of €5.5m for a second round of the successful Online Retail Scheme, a grant for retail companies to develop a more competitive online offer.

The measures also include €10m additional funding for the Seed & Venture Capital Fund to address shortages of liquidity and provide increased sources of finance for VC-backed SMEs.

“This series of additional initiatives will provide important targeted assistance to Irish companies as they stabilise, reset and recover from the impact of the Covid-19 pandemic and get ready for Brexit,” said Enterprise Ireland CEO Julie Sinnamon. “It will also assist companies reduce their carbon footprint and move to a more sustainable future.

Key measures include:

Sustaining Enterprise Fund

Important amendments are being made to liquidity and medium-term financial supports provided under the Sustaining Enterprise Fund (SEF) to Covid -19 impacted enterprises operating in the manufacturing and internationally traded services areas. Supports being provided under the SEF will now comprise a non-repayable grant element of up to 50pc of the total value of the support being provided, up to a maximum value of €200,000, with the balance of funding being in the form of repayable support (equity, loan note or repayable advance).

These changes are being made in response to the extended ongoing difficulties and evolving liquidity needs being experienced by companies resulting from Covid-19.

The changes being introduced will provide greater assistance to vulnerable but viable companies to address their immediate liquidity needs, while taking the necessary actions to return to a position of viability and growth over the medium term.

SME Brexit Preparedness

€20m in funding has been allocated for two initiatives to support SMES to strengthen their customs and other supply chain infrastructure. Support will be in the form of:

Recruitment grants towards the costs of recruiting customs intermediaries.

Funding of up to €5,0000 towards the cost of software, IT systems and other supply chain upgrades that are needed to meet future trading and customs declaration requirements.

Covid-19 Life Sciences Fund

The COVID-19 Life Sciences €25m Scheme is a targeted State support managed by Enterprise Ireland and IDA Ireland to aid the research, development and production of Covid-19 products in Ireland that are used in the fight against COVID-19.

Green Enterprise Fund

A new €10m Green Enterprise fund, which will support enterprises to strengthen the sustainability of their activities and realise the market opportunities arising from the transition to the low carbon economy. The fund will support capacity building, investment in R&D and Innovation and capital investment in start-ups, established SMEs and large companies.

Restart Grant

Enterprise Ireland also welcomed the enhancement and broadening of the Restart Grant with an additional allocation of €300m. Sinnamon said the Restart Grant, which is administered by local authorities, will benefit many Enterprise Ireland client companies as they stabilise, reset and recover from the impact of Covid-19.

Local Enterprise Offices (LEOs)

A package of liquidity and enterprise investment measures worth €55m will be put in place to support small and micro companies through additional resources for MicroFinance Ireland and the Local Enterprise Offices.

“Since the effects of the Covid-19 lockdown began to impact on small businesses, the Local Enterprise Offices have been working around the clock to get supports to companies to help stabilise them and prepare them for the new normal,” said Oisin Geoghegan, chair of the network of Local Enterprise Offices.

“Supports like the Trading Online Voucher and the Business Continuity Scheme have been invaluable in this process and have enabled small businesses across the country adapt and keep their doors open, if only virtually.

“The Trading Online Voucher Scheme in particular has helped almost 5,000 small businesses both get online and improve their online presence since March.  This has been crucial in recent months and for many has been the difference between staying open and shutting the doors for good.  The opportunity to help even more businesses with this new announcement will no doubt have a similar impact.

“Since March we have completed training for almost 30,000 individuals involved in small businesses along with one to one mentoring of over 6,000 business owners directly affected by Covid-19.  We have been working with small businesses to show them how to move forward, to stabilise their businesses and plan for the future and with today’s announcement it significantly strengthens our position to do so,” said Geoghegan.