SME Recovery Ireland has set out its Budget Submission today, which is aimed at building long-term SME resilience and sustaining SME recovery.
Among the measures proposed by SME Recovery Ireland are a national agency for small business, a dedicated Minister for SMEs, the establishment of a rainy-day fund, a national small business resilience fund as well as a research and development tax credit regime.
The group said a National Agency for Small Business - akin to Enterprise Ireland and the IDA - should be set up to ensure that domestic SMEs that do not export are effectively serviced by Government.
This would include the introduction of a dedicated Minister for Small Business.
It also said a Small Business Rainy-Day Fund should incentivise businesses to set aside 1% of annual revenue to accumulate capital reserve for unexpected challenges and shocks. These funds would then be matched, or part matched, by Government.
The group said its proposed National Small Business Resilience Fund would be open to applications from any small business that has suffered a trading crisis and requires grant assistance to recapitalise that business.
This would be administered by NTMA and capitalised using European Union recovery funding.
SME Recovery Ireland is also suggesting the establishment of a business owner finance literacy learning supports to ensure small business owners have the financial acumen to ensure their business is on a long-term financially stable footing.
This should be supported through the National Training Fund and rolled out via the national network of Local Enterprise Offices.
Meanwhile, it has also called for a research and development tax credit regime with simplified expenditure qualification allowing better access for SMEs, enhancing the existing R&D tax credit regime which is complex and onerous for small businesses to apply for.
"Building a financially strong and resilient small business sector that can withstand shocks and have a stable base to grow and support the communities in which they operate will be fundamental to the success of the National Economic Recovery Plan," commented the chair of SME Recovery Ireland John Moran.
"While we commend the Government on its ambition to introduce such a plan, it is essential that the approach adopted is based on the need to reboot the entire SME sector and not merely smaller sub-sections of it," Mr Moran said.
"Although many are calling for industry specific actions, our Budget Submission outlines why pan-sectoral interventions through the right blend of policies are equally as important for establishing financial resilience and sustainability across the whole sector," he added.
Mr Moran said that while the small business sector was less indebted coming into the Covid-19 crisis, it remains undercapitalised to withstand external shocks and significant reductions in economic activity.
"We know how enormously resilient, agile, and open to change Ireland's small businesses are and when married with the correct policy interventions to build resilience such as the ones we have put forward, businesses that may otherwise fail in a crisis such as the current pandemic, can be sustained," he added.