Carol Nolan demands urgent SME support and criticises insurers
Carol Nolan addressed the minister about the national recovery plan for the small business sector and urged targeted liquidity, favourable loan terms and broader access to lending for SMEs. She criticised insurance companies for high costs, raised problems with the commercial rates waiver and questioned eligibility rules for the online retail support scheme.
SME recovery plan and sector facts
The national recovery plan for small businesses, backed by Ismay Retail Excellence Ireland and the Restaurant Association among others, was highlighted as recognising that SMEs account for 99.8% of active enterprises, 65% of total employees and 31% of exports. The plan requests improved liquidity schemes up to €6 billion, a minimum one-year payment holiday, 0% interest and easier access to funds via a broader range of lending partners and increased guarantees.
Loan terms and access to finance
Carol Nolan said most small businesses will need time to recover and stressed that loan schemes must be easier to access and better targeted. She said some firms will need 0% interest loans while others will require direct grants and proposed considering a 30% grant based on VAT already paid in 2019 as one possible measure for larger employers. She also welcomed free mentoring and online training but warned support must reflect the realities of many businesses.
Restart grant and commercial rates waiver
She acknowledged immediate stabilisation measures such as a €10,000 restart grant for micro and small businesses and a three-month commercial rates waiver. Nolan raised concerns that the commercial rates waiver may be hampered by contractual obligations many SMEs have in place and asked the minister to explain how those difficulties might be overcome so businesses in Leash and Offaly can plan.
Urgent local cases and job risks
Nolan recounted contacting the minister about an urgent Offaly business with serious concerns about access to finance and noted she had emailed earlier on the case. She warned hundreds of jobs are at risk and said one business reported paying €11,000 every week in insurance costs despite having no trading activity during the pandemic.
Insurance firms criticised and online retail limits
She strongly criticised insurers, saying their approach shows a blatant disregard for business survival and asking whether the minister or the Minister for Finance has engaged with insurance companies over their treatment of firms. She also highlighted limits in the COVID-19 retail online scheme, noting eligibility was reportedly restricted to retailers with more than 10 employees and a pre-existing online presence, which she said is impossible for many small retailers and needs to be addressed.
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Minister, last week a national plan to recover the small business sector and to ensure that employment is sustained was published. This plan is backed by Ismay Retail Excellence Ireland and the Restaurant Association among others. It recognises that SMEs account for 99.8% of active enterprises and 65% of all total employees. It also recalled that 31% of our exports are SME related, so it just goes to show how important our SMEs are to our economy. These facts clearly point to the significance of the sector for all of our communities and indeed all of our regions, families and our wider economy. One of the key points in the recovery plan was a request to ensure that improved liquidity schemes up to 6 billion are put in place, which better target small businesses. It recognises that most small businesses will require time to recover and that money will need a minimum one-year payment holiday and 0% interest rate. It also stressed that key to all loan schemes should be the capacity to make the funds easier to access, which means government channelling liquidity to a broader group of lending partners and increasing the level of guarantees on this capital. The fact that these suggestions are coming directly from the SME sector itself highlights the value in adopting this kind of approach and I welcome it. My own sense has been that since the start of this crisis, you have taken a strong and very pragmatic lead and I commend you for that. You were quick to recognise the need to put in place immediate and ongoing stabilisation measures. These include a €10,000 restart grant for micro and small businesses based on rates and waiver rebate from 2019 and a three-month commercial rates waiver for impacted businesses. As I understand it, however, the commercial rates waiver may be running into some difficulty due to the nature of the contractual obligations that many SMEs have in place. And I would just like you to elaborate on that and maybe give suggestions as to how this could be overcome. I know that many businesses in Leash and Offaly will want to know that as soon as possible in order to plan going forward. One business that I have been in contact with in Offaly yesterday evening has very serious concerns around access to finance and I know I have emailed you on that earlier today, Minister. It is very urgent and I would ask that any help you can give would be given in this respect because hundreds of jobs are on the line. Businesses also have informed me. The same business indeed informed me that it is paying €11,000 every week in insurance costs, despite the fact that there is absolutely no business given the pandemic. And I feel that action needs to be taken in terms of the insurance companies. I just feel that there is a blatant disregard. They are the only sector in our economy that is not supporting or helping businesses in any way. In fact, they are hindering business and threatening their very survival. And I know that there was mention today in the Irish Times of a case being taken against an insurance company by a business. I just feel that their whole approach and indeed the attitude is totally unacceptable and it is unhelpful at this time. And I would just like to ask Minister, have you engaged or has the Minister for Finance engaged with the insurance companies in respect of their ill treatment of businesses? I feel also, Minister, on a different point that some businesses at present, as I say, will need the 0% interest loan and others will require direct financial support and grants. Every business obviously is different and we cannot employ a one-size-fits-all approach. But I am just wondering also on the proposal in regard to the possibility of giving a 30% grant based on VAT already paid by businesses from the 2019 tax year. Is that a possibility? It won't benefit all businesses but certainly there are bigger ones out there that employ hundreds of people that really could benefit from something like this. I know, Minister, you have emphasised also on another point that free mentoring and online training are available for SMEs and I welcome that. But again, I would just like to say that there are genuine concerns here with respect to the focus on online retail supports. I recently highlighted some of these difficulties with respect to the COVID-19 retail online scheme. I know in a reply to a recent PQ that I submitted, Minister, you noted that the scheme will only be open to retailers employing over 10 people and that they will have to have had a pre-existing online presence. That is impossible for many, many businesses out there and indeed it is a difficulty. So I would just like you to address that. Thank you very much.
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