Irish SMEs have lost more than €10bn in revenue as a result of the economic disruption caused by Covid-19, according to new estimates by the Central Bank of Ireland (CBI).
In a financial stability note published today, the CBI estimated revenue shortfalls across the SME sector range between €10.3bn and €11.7bn, putting many small businesses in financial distress.
While the bank said that many of these firms will be viable over the medium term, additional loan forbearance and restructuring may be required to help them trade through the current disruption.
It said that businesses could cover their shortfalls with a combination of cash reserves, credit facilities, new borrowing, cost cuts, and government support such as grants, reliefs and guaranteed loans. The report noted that wage subsidies alone will provide more than €5bn in fiscal support to SMEs by March 2021
The Central Bank warned, however, that policymakers should “prepare for the likelihood that some SMEs are unlikely to survive this shock”.
The report was published the day after system-wide payment breaks for SME loans expired, leaving firms to negotiate any further lender support on a case-by-case basis.
Irish Independent, 01 October 2020