Edmund Honohan IT’S A FAIR bet that banks will be watching our current caretaker Government proposing legislation to support Ireland’s struggling small businesses – with below-market-interest-rates from financial institutions – and could decide, on that basis, to hold off on normal lending for now.
If you thought predictive grading for the Leaving Cert was going to be difficult, wait until you unravel this business challenge. How you forecast the viability of a business is complex and takes a much longer timeframe. The difficulty in 2020 is that modern banking structures do not allow for much patience or imagination.
There is some encouraging light, though. Credit Unions, take note: the EU Commission has given until 30 June to register interest in tapping into EU-facilitated funding for SMEs. Check out the COSME programme and ESCALAR. Helpfully, the EU has been thinking about examinership. Directive 2019/1023 on “preventive restructuring frameworks, insolvency and discharge of debt” requires the Irish Government to transpose the provisions of the Directive into Irish Law by this time next year. The aim is a company restructure which ringfences the core business and gives the entrepreneur a second chance to achieve viability.
Qualification for public funding should have a matrix of societal factors with predetermined ranking. This is not rocket science: we do this sort of exercise for all public procurement tendering. “Solvency” could be a dynamic measure based on re-ordering and perhaps bailing in different creditor classes. A rollover for the revenue and secured creditors. Early and prompt discharge of trade debts.
Now that’s a constructive suggestion
Varadkar responsible for economic crash not the Virus
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