CEO Update: Sustaining distressed SMEs
The latest CEO Update newsletter to Ibec members from Danny McCoy
As our society begins to re-emerge from the Covid related restrictions, the economic impact and consequences for our businesses are becoming revealed. All aspects of our economy have been impacted but SMEs have been particularly hard hit. As SMEs account for 99% of active enterprises and 70% of employment, assessing the impact and addressing their recovery needs must be prioritised in the coming month.
Ibec is today launching our Sustaining SMEs campaign to support SMEs at this critical time. To reboot SMEs it is crucial that the proposed ‘July Stimulus Plan’ delivers the following three outcomes:
1. Significantly improve the Restart Grant: increase the fund to over €1 billion, including a flat rate payment of €15,000 per company to match the German and UK schemes and remove the link to the rates system which disqualifies so many smaller operators
2. Introduce a new and radically improved ‘bounce-back’ credit guarantee scheme for firms with below 50 employees: with 100% guarantees on loans, no portfolio limit and an interest rate holiday of 12 months followed by interest rates well below the eurozone average
3. Introduce measures to address fixed costs and debts: Introduce a fund to write down debts under the Revenue tax warehousing scheme where they threaten business viability, extend the commercial rates waiver to six months with a further six-month deferral, and introduce a binding mandatory arbitration model for disputes over commercial leases. This arbitration model should include some State burden sharing based on the recent Swedish state-aid approved model.
Further information about the scale of the challenges facing SMEs and the measures Ibec is pushing for are available in this Sustaining SMEs messaging document (attached below). I would urge you to share these messages within your own organisations and amongst your wider stakeholder groups.
As part of the campaign we will host a number of events, the first on Monday 29th June, 08:30-09:30 at which a stellar line up of SME CEOs from across industry will join myself and Ibec Chief Economist Gerard Brady for a discussion on supports and liquidity needed for the sector. Please click here to register your attendance.
I would also encourage you to engage with the campaign on social media with the hashtags #RebootReimagine and #IrishSMEs and by liking and sharing Ibec’s content on LinkedIn and Twitter.