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Irish family businesses call for national recovery fund

Last week the Government announced new loan schemes for firms affected by the Covid-19 slowdown.

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Irish family businesses have call for the creation of a national recovery fund to save jobs and rebuild the economy (Luciana Guerra/PA).

Irish family businesses have call for the creation of a national recovery fund to save jobs and rebuild the economy (Luciana Guerra/PA).

Irish family businesses have call for the creation of a national recovery fund to save jobs and rebuild the economy (Luciana Guerra/PA).

Irish family businesses have call for the creation of a national recovery fund to save jobs and rebuild the economy.

Last week the Government announced new loan schemes for firms affected by the Covid-19 slowdown.

John McGrane, director of the Family Business Network, said: “The recovery needs cash not debt.”

The organisation cautioned against relying on borrowings alone.

Under current arrangements, firms that survive the immediate crisis risk being killed by deferred debts, the organisation said.

Mr McGrane added: “Many employers will simply be unable to continue trading with the burden of deferred liabilities including local authority rates.”

A National Recovery Fund would inject cash into deserving businesses in return for a form of future coupon from those who succeed.

This would avoid layering additional levels of debt on family-owned companies and focus on rebuilding their businesses, the lobby group said.

New “recovery bonds” and the government’s existing rainy day fund could probably fund the national project, it added.

Mr McGrane said: “Irish businesses learned the hard way that funding their business by debt alone is a route to disaster.

“What we need now is a National Recovery Fund on behalf of the whole nation.

“We should maintain the national consensus and ability to get things done by implementing a shared national fund that can quickly give viable firms cash, like we’ve done with the temporary wage subsidy scheme, without the threat of repayment unless some becomes affordable later on.”

He added: “Irish family-owned businesses are not expecting charity but a package that’s fair to both the State, by avoiding massive welfare payments and loss of income, and to Irish employers.

“Let’s make sure we don’t saddle viable local family enterprises with levels of debt that are self-defeating.”

He said, until recent weeks, Irish indigenous firms employed over 700,000 jobs in every part of the country and generated more than half of Ireland’s total GDP.

PA