60% of Irish Businesses Negatively Impacted by COVID-19

60% of businesses who have engaged with Enterprise Ireland’s Business Response Unit since March say that COVID-19 has had a very negative or critical impact on their business to date.

Financial planning was listed as one of the key priorities identified by client companies in responding to the crisis. 34 per cent of the client companies in contact have engaged with a financial institution, and one in three have put a financial plan in place.

As part of the Sustaining Enterprise Fund recently announced by the Government, Enterprise Ireland today announced that it will administer a specific Sustaining Enterprise Fund for Small Enterprises.

This fund will provide a €25k to €50k short term funding injection to eligible smaller companies to support business continuity and to strengthen their ability to return to growth. Eligible companies will have suffered, or be projected to suffer, a 15 per cent or more reduction in actual or projected turnover or profit as a result of the Covid-19 outbreak.

Minister for Business, Enterprise and Innovation, Heather Humphreys said: “The impact of Covid-19 presents unprecedented difficulties for businesses who have already spent the past three years preparing for the possible consequences of Brexit, but those preparations will stand to us. Last weekend, the Government announced a major expansion of supports for all businesses impacted by Covid-19 by €6.5bn.

“We now have a comprehensive suite of supports for firms of all sizes, which includes grants, low-cost loans, write-off of commercial rates and deferred tax liabilities, all of which will help to improve cash flow amongst our SMEs.

“This package, which includes the €180 million Sustaining Enterprise Fund, has been developed to meet the varying needs of Irish enterprise and the supports are very specifically targeted by size, sector and need.”

Julie Sinnamon, CEO, Enterprise Ireland said: “This is a very serious and challenging time for businesses with many facing acute challenges particularly around cash flow, investment and holding onto the skills that they worked so hard to recruit. Our focus is on supporting companies through this period, getting the right advice and access to funding that they may need.

Cash flow and business continuity are key at this point. To help in these critical areas, the €180 million Sustaining Enterprise Fund will provide repayable advances of up to €800K, while smaller businesses can access repayable funding of up to €50k to support business continuity. We are in constant contact with our clients about the range of Enterprise Ireland supports and wider Government supports available to them.”

Of the 1,000 companies who have been in contact, three main areas of business which have been negatively impacted were identified;

— 63% cited sales exports
— 50% cited staffing and retaining employees
— 28% cited supply chain

“The findings today cite that a third of companies have put in place a financial plan, but this should be a priority for all and we need more companies to start engaging in a planning process. My strong advice to companies is if you haven’t already done so, to prepare an assessment of your financial requirements and progress funding applications to the banks and other financial institutions immediately. Enterprise Ireland’s Business Financial Planning grant will help companies to prepare a Business Sustainment Plan,” Julie Sinnamon added.

Innovative Start-Ups

In relation to addressing the funding needs of start-ups, Enterprise Ireland also said that its innovative High Potential Start-Up (HPSU) Fund, which provides up to €800k for innovative technology companies will help start-ups to maintain liquidity and sustain their businesses in the short to medium term.

“The innovation and dynamism of Enterprise Ireland-supported High Potential Start-Up (HPSU) firms are vital to future economic growth, and it is absolutely essential that HPSUs that were making strong commercial and technical progress prior to Covid-19 receive the support they need to get through the crisis. Start-ups, by their nature, are more vulnerable to the challenges that Covid-19 brings and we are working on a one-to-one basis with our HPSUs to identify their challenges and needs.”

“The wide range of supports for business available from Enterprise Ireland will support companies during this unprecedented time. It is a rapidly evolving situation and our response will also evolve to continue to meet the needs of industry”, Julie Sinnamon concluded.