Funding supports for SME’s to help deal the impact of Covid-19

Impact

The impact of this crisis is already being seen with many shutting their doors temporarily and for others, maybe permanently. The impact will be felt across many sectors with some affected much more than others.

Supports and assistance have been announced with hopefully a lot more to follow. I will try to capture some of them here and talk about how businesses can go about accessing what they need.

Estimating the scale of the problem for your business

I know for many businesses, if I asked how much financial support they need, the answer would be as much as they can get. But to get approval for support you will have to provide some information to help the relevant bank/agency to make a decision.

A good starting point for this is to prepare a projected cashflow to show the scale of the problem. I would recommend doing one for the next 3 months and have included a link below to a template to use. This should be a high-level review capturing the main inflows and outflows of cash.

How to go about it

Step 1: List all payments in and out of the business that you expect over the period.

Step 2: Then look at everything and see if there is anything you can defer. Call your creditors and see if they can offer some assistance to defer payment. Some will be in a much healthier financial position and may be able to help. This is going to take a joint effort and hopefully businesses that can help, will help.

Step 3: Finalise the project cashflow and see what your funding requirement is.

Funding Options

Now that you have some idea of how much you need, the good news is that there are already some supports in place.

Below are some of the supports available:

Banks

Talk to your current bank to see how they can help. 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.

Microfinance Ireland

  • Loans from €5,000 – €50,000
  • Supports businesses who have been impacted negatively by coronavirus in Ireland
  • Loan terms typically up to 3 years
  • Up to 6 months Interest only payments
  • No fees/no hidden costs/charges
  • Fixed repayments/no penalty for early repayment

Eligibility

  • Any business (Sole Trader, Partnership or Limited Company) with less than 10 employees and annual turnover of up to €2m
  • Not in a position to avail of finance from Banks and other commercial lending providers
  • 15% of actual or projected turnover or profit is negatively impacted by COVID-19

https://microfinanceireland.ie/loan-packages/covid19/

SBCI

The €200m SBCI COVID-19 Working Capital Scheme for eligible businesses will be available within the next week.

https://dbei.gov.ie/en/What-We-Do/Supports-for-SMEs/COVID-19-supports/SBCI-Covid19-Working-Capital-Scheme-FAQ.html

Enterprise Ireland

Specific supports include:

  • A €200m Package for Enterprise Supports including a Rescue and Restructuring Scheme available through Enterprise Ireland for viable but vulnerable firms that need to restructure or transform their businesses, details of these supports are being finalised
  • “Finance in focus” grant of up to €7,200 available to Enterprise Ireland and Údarás na Gaeltachta clients to support financial planning

https://enterprise-ireland.com/en/About-Us/Services/Covid-19/Supports/Covid-19-Guide.pdf

Local Enterprise Office

LEOs can also provide business continuity vouchers from €2,500 to assist in preparing a plan for any business continuity issues that arise in the current challenging environment.

They can also assist in applying to Microfinance Ireland

https://www.localenterprise.ie/

Revenue

Revenue have said they will work with businesses that are experiencing cashflow issues. Some key points include:

  • Interest on late payments suspended for Jan/Feb VAT and both Feb and March PAYE (Employers liability)
  • All debt enforcement suspended until further notice

https://www.revenue.ie/en/corporate/press-office/press-releases/2020/pr-130320-revenue-announce-measures-to-assist-smes-experiencing-cashflow-difficulties-arising-from-covid-19.aspx

Peer to peer lending

This provides an option to borrow money on the lending platforms such as Linked Finance, Flender and others out there.

These platforms work by matching businesses with people that have excess cash and want to lend to SME’s.

https://www.linkedfinance.com/

https://flender.ie/

Required Action

Now is the time to start applying for any funding/support your business needs. I imagine there will be a lot of applications and while the different bodies will look to move quickly, there is bound to be delays.

No matter the scale of the potential impact, it is important to have the approval for funding in place, just in case you do need to draw it down.

It is important to remember, many businesses will struggle, not because they are not good businesses, but because of this short-term crisis we find ourselves in.

I would ask other businesses that are less impacted to do all they can to help the more vulnerable. Deferring a payment by a month or two could make all the difference.

Peer to peer lending also gives people who have the funds to help, the platform to lend to SMEs.

I am asking everyone to do their bit and I will do what I can to help. If any business needs help with anything funding related, get in touch and I will help in any way I can.

Hope this helps,

Luke

Email: luke@financechief.ie

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