In living history there hasn’t been a week like this for us as a society and as a business community. As I mentioned last week there were two main threats, the health risk posed by Covid-19 and the contagion risk of fear.
A week later, in Ireland we have increased cases of Covid-19 and regrettably people have lost their lives. The majority of the population are now taking the health risk very seriously and following the direction of our Government and Department of Health. Please take as much action as you can to minimise social contact personally and within your teams.
It seems crude to talk of business in a time like this, but business is important. Without businesses and entrepreneurs we could not live the lives we do.
Some businesses are busier than ever, particularly in the med-tech and life sciences space, as they rally to accelerate their R&D activities and create product that is vital for continued supply chain in the battle with Covid-19. They do these however following WHO guidelines.
Some business are working through the cloud from the safety of their homes. Assurances have been provided from mobile network/broadband providers that the capacity is in place to cope with their data and connectivity needs (download/upload speeds etc) while also coping with the needs of families at home, particularly children using technology for content and schooling (download speeds). These weeks and months will certainly test the network capacity.
Many businesses are closed however and our role in Chamber is to be the voice for those, to lobby, help inform them of the supports available, translate announcements into the practical impact those announcements have on them and their teams and be available to speak to and engage with those impacted. Critically we also want to make sure that when this passes, and it will, that they are ready for action in re-opening their business and that they will be supported during this time.
To that end this week we in Chamber have led out on engagement with the following groups / organisations;
- Lobbying at a national level through Chambers Ireland with Ministers and Secretary Generals of Dept. of Social Protection and Dept. of Business, Enterprise and Innovation and Dept of Housing, Planning and Local Government.
- Met with the Department of Social Protection in Galway along with political & business representatives
- Virtually met with Senior Executives in AIB, Bank of Ireland and Ulster Bank along with political & business representatives
- Virtually met with the Local Enterprise Office in Galway along with political & business representatives
Below is a summary of those meetings, key actions coming over the next few days and weeks. You will see the contact details of my team members and myself. We remain as ever at your disposal, as we know that your business needs us now more than ever.
We are constantly updating our dedicated webpage with key resources and guides for employers and employees, and we encourage you to take a moment to see what is support is available to you.
We know that you and your business need us now more than ever, so please be assured that our team is here to help and support you. If you need to contact any member of the team, email addresses are as follows;
You can also contact us by phone – 091 563536
Above all else, please take care of yourselves and those close to you.
Yesterday, Thursday 19th March, Galway Chamber had an engagement session with local banks and the Local Enterprise Office, and posed questions and topics queried by our members.
Topics queried were as follows;
– Access to new credit for working capital
- All banks advised they have internal groups working on the delivery of processes for applying for additional credit and drawing it down. The government announcements yesterday around amending the liquidity requirements for banks will ensure banks have adequate funds available to lend to viable businesses.
- Breda Fox of the Local Enterprise offices spoke about Micro Finance Ireland and that loan amounts accessible through same had been increased to €50,000 available for businesses with turnover <2M, employing less than 10 staff, with a sales decrease of 15% or more as a result of COVID19. A holiday of 6 month on interest and repayments also applies to these loans once approved. LEO advisory supports for financial planning and HR also available for all businesses and employee headcount not a barrier. Critically she outlined that for clients to access Micro Finance Ireland’s services through the LEO network they needed to first have approached their bank firstly.
– Deferral of existing business and personal debt (including credit card)
- There were slight variations between the responses to personal debt deferral depending on the type of debt. Personal loan facility modifications are expected to be available and are being worked on in all banks. Credit card debt may need to be repackaged separately. (Interest continues to accrue during the deferred period and credit card debt is charged at a higher rate of interest). Make contact with your bank now and they will best advise depending on your circumstances.
– Restructuring / repackaging existing debt
- Strong willingness to do this – critical recommendation is to reach out to your relationship manager / bank central contact team now to start this process. Once no new funds have been requested this should be straightforward once the new process has been launched.
– Mortgage payment holidays
- Engagement with the Central Bank is underway by all banks to accommodate these requests with a simplified process that will not adversely impact the customers credit rating during this time of deferral. Early next week should see more guidance issue on the steps involved in these applications.
– What is the process for applying?
- Links to each of the banks present application criteria / process are listed below however all expect to have revised paperwork / processes issued by next week.
– Finance & Leasing lending payment holidays
- If the F&L is with the bank directly they expect to have the ability to process an application seeking deferral (there will be anomalies depending on product type with fixed v’s variable rate etc) however if the leasing is done through a third party provider the customers will need to contact the providers directly.
– Fraud prevention
- This was highlighted as an area for considerable concern, that some will use this time of uncertainty to target vulnerable customer groups. An example was cited where a vendor purported to provide fast loans for businesses in this time of crisis however when the business applied, they were asked to pay a fee, which they duly did. Then a follow up fee was requested at which time they became concerned and raised the matter with their existing bank. This was a scam and an example of the creativity of some in trying to elicit funds from vulnerable businesses.
- Caution was advised by all banks that customers need to be aware of whom they are dealing with and not provide information such as pins or passwords to any third party.
– Will modifications to existing agreements attract fees / charges
– Will interest be charged for the deferred period?
- Yes – if a loan is deferred, interest will continue to accrue at the contracted rate for the period of the deferral and will be added onto the overall facility, but no additional or penalty interest will apply.
– How will loan extensions be treated, i.e. increasing the repayments once back on capital & interest or extending the term?
- This may depend on individual bank operating systems but an example was given by one institution which suggested that the preference is for the deferred period to be added onto the backend of the loan, e.g.: if you have a loan now that has 10 years remaining, you defer it for 3 months, your new term will be 10 years and 3 months. It is not yet clear how the variation to the existing contract would be documented in this example. With most variable rate facilities though businesses / customers will have the ability to make early repayments to shorten the term should they wish to do so.
Breda Fox of the Local Enterprise Office spoke of the importance of the business making contact with them also to access what support may be available. Many businesses will have to prepare some form of projections / cashflow analysis – Breda through the LEO has a team of mentors that can be used as a resource to assist with this process. The most important thing you can do is reach out to her team for support.
The Local Enterprise Office Contact Details
Phone: 091 509090
The Department of Social Protection team in Galway and across the country have done a brilliant job providing supports to people impact by job losses or reduced hours due to COVID-19. Galway Chamber met with a senior team from the Galway office of DSP on Monday and it is reassuring to see the effort and professionalism being put into supporting people who need financial support and making it as easy as possible to access this.
All businesses need to keep up to date with the daily announcements from DSP and communicate these to their colleagues as quickly as possible.
– Dave Hickey, President, Galway Chamber
The COVID-19 Pandemic Unemployment Payment is a new payment available to all employees and the self-employed who have lost employment due to a downturn in economic activity caused by the COVID-19 pandemic. The payment has a simple one–page application form and will be paid for a period of 6 weeks at a flat rate payment of €203 per week for jobseekers. It is designed to quickly deliver a social welfare payment to the unemployed and provide income security during this 6-week period.
The flat rate for COVID-19 Pandemic Unemployment Payment is €203 paid for a 6-week period. It is equivalent to the jobseeker payment rate.
During that 6-week period the person making application for this payment will be required to complete an additional application in respect of a Primary Payment (e.g. Jobseeker Benefit/Allowance, Jobseeker Benefit/Self Employed etc.). Please click the following link to 1) Access details in relation to the COVID-19 Pandemic Unemployment Payment and to 2)Download application for the COVID-19 Pandemic Unemployment payment https://www.gov.ie/en/service/be74d3-covid-19-pandemic-unemployment-payment/?referrer=/pandemicsupport/
Employee Lay Offs: Employees who have been laid off during the COVID-19 are also required to apply for a Jobseekers payment(in addition to the COVID-19 Pandemic Unemployment Payment)t by clicking on the following link; https://services.mywelfare.ie/en/topics/out-of-work-payments/apply-for-jobseekers-payment/
Employees who wish to apply for a Jobseekers payment will require written confirmation from their employer that they have been made unemployed or laid off temporarily.
Self Employed: Self Employed persons who have had to close their business as a result of COVID-19 should apply for Jobseekers Benefit (Self Employed) in addition to making application for the COVID-19 Pandemic Unemployment Payment. Self Employed persons can download the Jobseeker Benefit Self Employed Application form here https://www.gov.ie/en/service/a030c1-jobseekers-benefit-self-employed/
Employees with Reduced Working Hours: Employees whose full time working week is being reduced to 3 days per week or less per week can make application for Short Term Work Support online through https://www.gov.ie/en/service/c20e1b-short-time-work-support/#what-short-time-work-support-is
The employer is required to complete the Short Term Work Support Form(UP14) for an employee whose full time working work has been reduced to 3 days or less a week.
The Government has today (20 March 2020) agreed with local authorities that they should agree to defer rates payments due from the most immediately impacted businesses – primarily in the retail, hospitality, leisure and childcare sectors, for three months, until end-May. This measure will be implemented by each local authority in its own area.
Recognising that this flexibility will have implications for local authorities in terms of cash flow and critical service delivery implications, short-term cash flow support for local authorities will be made available. It will review the arrangements, as required.
The announcement was made by Ministers Murphy, Donohoe and Phelan today (20 March). Local authorities deliver critical services, including emergency response, housing, homelessness, parks and amenities and they are working with the HSE at national, regional and local level on the co-ordinated response to COVID-19.
Businesses around the country contribute €1.5 billion in commercial rates to local authorities every year. This is a critical source of income, making up between 16% and 53% of total funding for essential local services at individual local authority level, averaging 33% nationally.
Local authorities are working as part of the State’s co-ordinated response to dealing with the Public Health threat posed by COVID-19, while also helping to ensure that the impacts on communities, businesses and other stakeholders are minimised.
They are acutely aware of the potential issues faced by their ratepayers. In particular, in the first instance, businesses, such as those in the hospitality sector, small and medium retailers, leisure and childcare areas, have been identified as those that could be adversely affected.
The Government is engaging with business owners and representative bodies nationally, while each local authority is engaging with its ratepayers and representative groups, monitoring the impacts at this stage of the COVID-19 response and keeping the evolving situation under review.
Already, individual local authorities are dealing with difficulties experienced by rate payers on a case by case basis. They are taking account of business pressures at this extraordinary time in terms of collection of rates and enforcement, in the sectors most impacted so far.
While the identified types of businesses may be most impacted initially, local authorities are also conscious that there may be impacts on other categories of ratepayers as the impact of COVID-19 and responses evolve and are monitoring the situation closely.
Individual local authorities have a long-standing relationship with local businesses and are very well placed to deal with this evolving situation and its impact on ratepayers in their own local authority areas and operating environments.
Any commercial ratepayers that have had to temporarily close or significantly curtail operations during the COVID-19 response period should contact their local authority immediately in relation to any rates payments falling due in the period to end-May. Ratepayers that can continue to pay their outstanding local authority rates should continue to do so in the normal way.