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Businesses warned about Brexit cashflow issues

Thursday, 28th March, 2019 9:08am

As the situation in the UK darkens and becomes even more uncertain as the date for Brexit approaches, the Minister for Business, Enterprise and Innovation Heather Humphreys this week issued a stark warning to Irish businesses.

She encouraged businesses to make sure they have the adequate cashflow to ensure they don’t run into major issues in the aftermath of Brexit.

Cashflow problems could arise for business for a variety of reasons including currency fluctuations, customs, potential delays and tariffs.

Minister Humphreys said: “Notwithstanding the European Council’s decision to extend the Article 50 process, businesses need to use this time to continue their preparations including making immediate plans for additional working capital headroom as a precautionary measure.

“We already know that hundreds of companies – from online hardware businesses to IT companies – have taken the first step of making sure they are eligible for the Government’s €300m Brexit Loan Scheme.

“Even if firms are unsure if they will draw down a loan, I would strongly encourage them to go through the application process so that they have one in place in case it is needed down the line. It’s better to be safe than sorry. The increased cashflow, if drawn down, will give them breathing room in the form of accessible working capital to mitigate any Brexit impacts on their business,” she added.

“This scheme is open to all Brexit-impacted companies and is part of a package of measures the Government is working on to ease Brexit pressures on business, such as the recent decision to defer VAT payments in the event of a no deal Brexit. I will also shortly be launching the Future Growth Loan Scheme, which will make up to €300 million of loans available with a term of 8-10 years to support strategic long-term investment in a post Brexit environment,” the Minister added.

Companies can now contact their financial providers or look to the range of state supports available to them.

Minister of State for Trade, Employment, Business, EU Digital Single Market and Data Protection Pat Breen said: “Microenterprises employing less than 10 people and with turnover of less than €2 million per annum should be aware that they can access loans of up to €25,000 from Microfinance Ireland. This can be done through the Local Enterprise Office network or directly through Microfinance Ireland.”

The Minister of State for Training, Skills, Innovation, Research and Development, John Halligan highlighted the risks for business of currency fluctuations. “Since the Brexit vote of 2016, the sterling/euro exchange rate has been volatile and this is expected to remain the case as the political uncertainty continues. I would therefore encourage all businesses to insulate their operations insofar as they can from any further volatility.”

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