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Funding Reluctance from SMEs

As you will no doubt know by now, we are massive supporters of Irish Small and Medium Enterprises (SMEs). These small and often unsung heroes of the Irish business world form the backbone of Irish business and make up more than half of all Irish businesses. As such, we have long been supporters of these businesses and championed their successes. In recent months we have spoken about funding opportunities available to these forms of business as well as the ways in which they can be protected and encouraged to grow.

The term Brexit is one which has been utilised so much in recent months that it has almost lost all meaning entirely. Terms like “hard Brexit” strike fear into the hearts of many Irish businesses who have dealings with the UK, and the constant shifting of deadlines and back and forth makes it difficult for businesses to implement sufficient safeguards for their businesses.

Reports this week suggest that Irish SMEs are becoming somewhat reluctant to borrow at present which may show a level of wariness in the looming shadow of uncertainty that is Brexit at present. The Strategic Banking Corporation (SCBI) was started in 2014 in others to allow access to credit for SMEs and functioned by channelling credit through other avenues. This has often been a popular choice for SMEs seeking to fund their business activities, but in the last year we have seen a major slump in uptake on this funding which even an additional Brexit loan to the scheme couldn’t fix. Figures show that 2018 saw only approximately a third of the funding taken up as was accessed in 2017. This shows that in the current climate, Irish SMEs are becoming increasingly reluctant to take their chances on accessing funding.

The SCBI themselves have said of the issues:

“The modest deployment in the nine months to end-December 2018 is a clear reflection of SMEs remaining reluctant to invest in an environment of increased uncertainty and risk as Brexit approaches.”

As things stand we remain almost none the wiser on how the Brexit issue will play out and as always, we advise having a plan in place and safeguarding your business as much as possible in advance. The current advice remains that old Irish refrain that fell from the lips of all parents at one point or another: “Hope for the best, prepare for the worst.” In this way, your business will be protected against all eventualities and in the best position possible to flourish in the face of challenge and adversity in the current uncertain climate.

Should you have any concerns or queries on any business or financial matters, please don’t hesitate to contact us here at EcovisDCA where we will be happy to help in any way possible.

 

 

The Rescue & Restructuring Scheme

Financial Aid To Restructure & Survive

As you are all aware, we here at EcovisDCA are massive supporters of Irish SMEs (Small and Medium Enterprises). We understand the importance of these types of companies, underpinning and creating a foundation for all Irish business. In general, we like to keep our clients and friends up to date on any issues that may negatively or positively affect these vital businesses. You may or may not have heard of the Rescue and Restructuring Scheme in Ireland. The scheme provides financial aid and State support to companies experiencing acute liquidity. The intention was that the scheme would offer assistance to those struggling companies who have the possibility of restructuring and continued survival in the business world.

The scheme was first introduced in November 2017, offering a fund of €10million to struggling Irish SMEs. In 2018, an extension to the scheme was approved and announced, with an additional €10million being made available to these businesses. The scheme was scheduled to run until 2020 and would offer support in form of loans repayable over a period of 18 months. The only exemptions to the scheme were those companies in the financial, coal and steel sectors.

The introduction of this scheme in 2017 and 2018’s subsequent extension and funds increase was already a massive boon to the Irish SME sector, offering some form of safety net in times of trouble. As we are all aware, financially speaking anything can happen in the economy and smaller businesses are usually the first to feel the negative effects, so this offer of €20million to survive Brexit woes for struggling SMEs was welcome news.

Further good news arrived on the horizon this month, with the announcement that the scheme would once again be extended with further funds being made available. Perhaps the whispers of terms like “hard Brexit” and “borders” may have had something to do with it, but on this occasion we see a massive increase as it was recently announced that The European Commission has agreed to increase the budget of the scheme by a whopping €180million to €200million.

We are delighted that the Government are taking the appropriate steps to assist in the safeguarding of these vital companies and their future in the eye of the Brexit hurricane, as it has long been known that Irish SMEs could be the most vulnerable in the event of Brexit causing trade and financial issues in Ireland. These additional funds show a willingness to create and support vulnerable businesses and create an ongoing contingency plan for these uncertain weeks and months ahead.

Should you have any queries on any business or financial matters, please don’t hesitate to contact us here at EcovisDCA where we are always happy to help.

Significant PAYE Changes Coming

Rolling with the Changes.

Following on from our recent series on modernisation, today we will be discussing some more imminent changes which are set to change the face of payroll as we know it. As you will all be aware, we here at EcovisDCA have long been great supporters of Irish SMEs (Small and Medium Enterprises). As we have discussed in the past, SMEs now make up over half of all Irish businesses, so to say they now form the backbone of Irish business is no exaggeration. In the past we have spoken at length about new methods of funding available to these vital businesses as we continue to support their survival. This week we have decided to take a look at one major upcoming change which could have a large impact on SMEs and which they may need to begin planning for as soon as possible.

This year it was announced that the PAYE (Pay as You Earn) system would undergo what is likely the largest overhaul the system has experienced since it was introduced in 1960. These changes will have wide ranging effects on all businesses. Having remained largely unchanged for decades, the system is naturally due a major changes and such a large change could of course have detrimental effects on any smaller businesses who may not be as prepared as they could be. These changes are due to come into effect in January, so time is running out to get fully prepared. It is intended that these changes make the payroll process an easier task going forward as well as allowing any issues to be resolved more efficiently.

A survey commissioned recently by payroll software providers Big Red Cloud has discovered the worrying fact that a large number of SMEs do not feel prepared for these imminent changes. While many firms reported that they feel there isn’t enough clear information to hand, as many as 40% feel that they are unprepared and short on detail of how the changes will work in practise.

Rather than payroll information being logged yearly via a form, many of our current ‘P’ forms will become outdates, with data being instead inputted on a regular basis. This new system will require an update of company payroll software, with companies employing less than 9 people qualifying for free software. This is a major shift towards real-time electronic logging of data which will remove the need for the classic forms.

Big Red Cloud CEO Marc O’Dwyer has said of the company’s findings:

“As the year progresses, it is becoming increasingly apparent to us that, not only are many businesses not ready, many are simply unaware and/or uninformed of the changes and what they will mean for their business.”

Whilst Revenue Chairman Niall Cody has stated that the changes:

“Represent an important step in the continuous improvement in service […] businesses, particularly those at the smaller end of the scale will need some help to get there.”

Should you have any concerns, queries or require further information on these or any other business and financial matters please don’t hesitate to contact us we are always available to help.

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DCA PARTNERSDECLAN DOLAN & EAMONN GARVEY

Little Fish in a Big Pond

As you no doubt are aware by now, we here at EcovisDCA are big supporters of Small and Medium Enterprises (SME’s). We have spoken at length in the past about the challenges faced by these types of businesses as well as the opportunities for growth and investment surrounding them. This week, we are focusing on the bigger picture for SMEs in Europe.

Data released from Eurostat, the European Union’s statistical office this week revealed that SMEs actually generate half the value of the intra-EU trade in goods. Whilst we have long known that SMEs form the backbone of the Irish economy, we now see that they are beginning to form the cornerstone of trade within the European Union also. SMEs in counties such as Latvia, Cyprus, Estonia and the Netherlands fly the flag for European SMEs as they are understood to have generated in excess of two thirds of intra-EU goods exports.

These new findings show that 98% of companies trading goods within the EU are SMEs, and that 70% of these companies are micro-enterprises. Small and Medium Enterprises are defined within the European Union as being non-subsidiary, independent firms which employ fewer than 250 employees, whilst micro-enterprises are defined as being businesses operating on a much smaller scale, with fewer than 9 employees.

Whilst we know that SMEs account for more than half of all Irish business, this new data shows that there is massive room for improvement for Irish SMEs within the larger European Union market. Irish SMEs account for less than one third of the intra-EU exports which given our size compared to larger countries may be understandable, but does allow for more expansion of Irish SMEs into this marketplace.

With Irish Small and Medium Enterprises now having greater access to a wider number of funding options than were available previously, there is now more opportunity for Irish SMEs to take to the World Stage. As always, we root for the underdogs here in Ireland!

Should you require any assistance or guidance on any financial or business matters, please don’t hesitate to get in touch with us here at EcovisDCA where we will be delighted to be of service.

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DCA PARTNERSDECLAN DOLAN & EAMONN GARVEY