Irish government measures will bring strong recovery
Kenneth Duffy is Fiduciam’s country manager Ireland
Many short-term lenders in Ireland may have closed their doors during the COVID-19 pandemic, but there are those than are still lending.
In fact, it is even more important that lenders continue to stand by their clients, especially the SME business community, to enable the economy to recover quickly.
As the effects of lockdown and coronavirus are felt, and we head into a period of uncertainty, it can be all too easy to see only the negatives.
However the Irish market is well versed and resilient in instances like this, having survived the economic downturn in 2008 and the recent Brexit negotiations.
Although, there is no doubt that there will be some casualties when we come out on the other side of the crisis, we are actually expecting this particular shock to be short and sharp, with the economic knock-on effects of the current lockdown measures mainly impacting earnings and employment.
It has been encouraging to see that this Irish government has responded extensively to minimise the impact felt by employers and their employees.
Sole traders and companies with up to nine employees, in need of microfinancing, can avail of immediate low interest loans of up to €50,000. These loans are provisionally set out for cash flow purposes, which will allow businesses to cover short-term overheads.
The government has also agreed, with local authorities, to defer rates payments due from the most immediately impacted businesses; primarily in the retail, hospitality, leisure and childcare sectors until the end of May.
From an employee perspective, employees and self-employed who have lost their employment due to COVID-19 can benefit from a Social Welfare payment of €350 a week.
It is evident, from these positive reactive measures, that the Irish government has learned from previous shortcomings. And, as a lender, we remain positive that, with these extensive measures, the general economic uncertainty will be short-lived.
Restrictions on people’s ability to go about their day-to-day business will impede normal estate agency, mortgage and conveyancing processes.
And, historically, mainstream lenders are notoriously slow in recovering from situations like this. This is where alternative lenders, like Fiduciam, can step in and provide a viable, flexible solution.
The fact of the matter is that if we, the speclist lenders, don’t provide the bridge between the Irish government’s contingency measures and mainstream lenders, then there will be far more casualties and the economy will take much longer to recover.
There is likely to be a high demand for short-term financing solutions, especially from SMEs and entrepreneurs as we come out of the crisis. Those lenders with strong funding lines, which allowed
them to continue to close deals throughout the lockdown, will be on the front foot when the current crisis is behind us.