Around 11,000 small and medium sized companies were on payment breaks here in early October, according to the Deputy Governor of the Central Bank.

That represents about a fifth of outstanding Irish SME loans.

Delivering an address to a webinar organised by the Small Firms' Association, Ed Sibley said many SME borrowers were rolling off payment breaks, but a proportion had financing arrangements that they would struggle to manage and continued supports may be needed.

"Individually-tailored solutions are required from lenders to support SMEs," he said.

Mr Sibley pointed out that, despite the availability of considerable fiscal supports to businesses, many SMEs were likely to experience financial distress next year.

"Even when all supports are factored in, around one-in-six SMEs are likely to be financially distressed into 2021 as a result of the effects of the pandemic. Many of these distressed firms need not fail, but they may require additional flexibility and protection to trade through this pandemic," the Deputy Governor said.

However, Mr Sibley pointed out that new lending to SMEs had declined and he described as 'noteworthy' the declining levels of SMEs accessing credit before the pandemic.

In the second quarter of this year, new lending to Irish SMEs, at €727m over the three month period, was 50% lower than the same quarter in 2019, figures show.

In the second quarter of this year, new lending to Irish SMEs, at €727m over the three month period, was 50% lower than the same quarter in 2019, figures show.

In fact it was the lowest volume of quarterly lending in about five years.

"The outstanding stock of SME credit on the balance sheets of Irish banks was €20 billion at the end of Q2 (the second three months of) 2020, the lowest amount in the Central Bank's statistical series," he said.

The Deputy Governor said the shock to SME turnover was creating significant cash-flow challenges in certain sectors.

The fall in turnover was particularly acute in the accommodation and food sectors, where around three quarters of firms experienced turnover declines in excess of 50%, but also in construction, where the respective figure was 27%.