Additional Business Grants Announced

Additional Business Grants Announced
by Dave O'Brien

This week and last there have been 2 additional schemes introduced to assist with certain businesses trying to get through the next few months of Covid related restrictions. There is also additional funding being given to the Sustaining Enterprise Fund. The schemes are well meaning and will give a lifeline to some businesses but is it a little too late for these businesses?

 

The two new schemes are only available to businesses who do not qualify for the Covid Restrictions Support Scheme (“CRSS”). Please click here for more details on the CRSS. In essence the government realised the CRSS was unfair on certain businesses whose income vanished over night but because of certain rules they did not qualify for the CRSS.

 

The Tourism Business Continuity Scheme looks really positive for those businesses that will be eligible. Unfortunately the second scheme that was announced – the Covid 19 Business Aid Scheme is not nearly enough for the businesses it is targeting.

 

The Tourism Business Continuity Scheme

 

This was announced by Failte Ireland last week. It is a €55m funded support scheme for tourism businesses who were not eligible for the CRSS. Applications have opened for phase 1 of the scheme.

 

The following is a list of the entities who are eligible for phase 1 of the scheme – as per the Failte Ireland website:

  • outdoor activity providers (e.g. bike tours, surf schools, kayaking tours, angling, walking tours, instructor led/guided tourism equestrian experiences)
  • golf courses with a tourism offering
  • tourist boat tour operators
  • hop on/ hop off bus tours with onboard tourism experiences
  • visitor attractions not eligible for CRSS (e.g. attractions with charity/ not for profit status or that are primarily outdoor attractions)
  • caravan and camping providers registered with Fáilte Ireland
  • cruise hire companies

 

To be eligible for the scheme the business’ average monthly turnover from October 2020 to January 2021 must be less than 25% of its average monthly turnover in 2019. Any EWSS or Restart grant payments received do not need to be included in the 2020 turnover calculation. The business must have a minimum turnover of €50,000 in 2019. The business must also have been in existence prior to January 2020 and the business must be planning to return to trading once the restrictions are eased.

 

Businesses who are considered as “undertakings in difficulty” as at 31 December 2019 will not qualify but this criteria does not apply to small and micro enterprises. In reality if your business is making annual losses prior to 2020 then you will need to ask your advisor as to whether your business is considered an undertaking in difficulty.

 

How much is the grant worth?

 

The minimum grant is €3,750 and the maximum grant is €200,000. The grant is based on the 2019 turnover figure and is calculated as 9/12ths of 10% of the 2019 turnover figure…

 

As an example for a business with a €500k turnover in 2019 then the grant amount will be €37,500.

 

This could be a lifesaver for some of these companies. There is only €55m to spend on this so we would recommend getting your applications in quickly for this one. Applications are made through the Failte Ireland website.

 

Covid 19 Business Aid Scheme (“CBAS”)

 

This scheme was introduced this week by The Tanaiste Leo Varadkar. It is again only available to businesses who do not qualify for the CRSS or the above Failte Ireland scheme. The following details of the scheme are only provisional and therefore are subject to change.

 

Unfortunately, the scheme is still linked to a fixed business premises. So if you did not qualify for CRSS because you did not have a fixed premises then you will still not qualify for this scheme. This means there are still some industries which the government are just ignoring, such as mobile traders and musicians.

 

What it does benefit are business who operate from a fixed premises but who do not have customers coming to them. This should fit nicely for caterers, wholesalers and events companies.

 

In order to qualify the business must be in receipt of a rates bill from their local authority. The business must also have a current tax clearance certificate. The minimum turnover of the business must be at least €50,000 in 2019. The qualification criteria is similar to the CRSS – the turnover of the business during the claim period must be no more than 25% of the average weekly turnover of the business in 2019. For new businesses (commenced after 1 November 2019) the comparison is based on the projected average weekly turnover of the business for 1 January to 30 June 2021.

 

While the funding is easily calculated  - it’s an €8,000 grant – it is relatively small in size compared to amounts available through the CRSS and the Failte Ireland scheme explained earlier. Overall the new scheme is quite disappointing.

 

The scheme will be administrated by your local authorities and further details are expected shortly.

 

Sustaining Enterprise Fund

 

This is a fund, run by Enterprise Ireland, where the funding is divided between a non-repayable grant and a loan. Companies can apply who have over 10 employees and are manufacturing or internationally traded service companies. The business must have seen a 15% reduction in turnover as a result of Covid 19 to qualify. You do not need to be a client of Enterprise Ireland to qualify. The downside to this funding is that the shareholders must match the funding given by Enterprise Ireland. However it is definitely worth considering for certain companies.

 

We acknowledge the above is a very short summary of the new schemes available. Please contact Quintas for further information or get in touch with your own advisor who should be able to advise you further.

 

As ever once new updates come for these and other schemes we will let you know in further bulletins.

Thanks again and stay safe.

 

Kind Regards,

Dave O'Brien