Volatility spikes expected for businesses as impact of Covid-19 may continue for 12 to 18 months

• 60% increase in SMEs accessing advisory services to stabilise businesses, says Paul O’Donovan & Associates
• Cork accountancy practice secures over €20million in supports and loans for clients

Today, a virtual conference titled ‘Navigating Your Business Through Uncertainty’ was held by Cork-based accountancy practice Paul O’Donovan & Associates, winner of Advisory Firm of the Year for SME Finance at the Irish Accountancy Awards 2020. 

Among topics for discussion were funding for SMEs impacted by the Covid-19 pandemic. During the past year, Paul O’Donovan & Associates has seen a 60% increase in SMEs accessing advisory services to stabilise their businesses and has secured over €20 million in government supports and loan facilities on behalf of its clients. 

Keynote speaker Jim Barry, Managing Director at BlackRock Alternatives Investors, said: “The virus will continue to drive the economy for the next 12 to 18 months, although the situation will improve as vaccination increases.  However, complexity will also increase.  At the end of 2021, we will see the real impact of Covid-19, especially at SME level. I expect to see volatility spikes.”

He continued: “Climate change and the required energy transition is a central issue for investors.  This has implications for the availability and cost of capital for fossil energy companies and assets. Companies are facing an existential challenge and opportunity.  Although many are talking about climate change, the majority don’t know what it means for their business.  Yet, it is fundamental for their value and supply chains.”

“Inflation is also on the agenda in developed markets. In the short term, the consumption boom that will follow vaccination will drive inflation to higher levels than seen in years.  The medium term is more nuanced; with the deflationary impact of the pandemic balanced by the inflationary impact of monetary policy and deglobalisation.  Compared to markets, Central Banks are taking a benign view. How this tension plays out will be critical to the medium term economic outlook and it will ensure the continued central role of Central Banks in our lives,” said Mr Barry.

Speaking at the virtual conference, Paul O’Donovan, Owner at Paul O’Donovan & Associates, said: “Since March 2020, the Irish business community has shown great agility and diversity, adapting to a new business environment.  The government has been to the forefront, making over €16 billion available in supports.  This year, we noticed that many SMEs that are eligible for these supports don’t always know how to access the funding available to help stabilise their businesses. Today is an opportunity to raise awareness of the funding options available.”

John McInerney, Pensions Technical Manager at Aviva Life & Pensions Ireland, also spoke about pension opportunities available to company directors in Ireland. He said: “Pension funding is highly efficient from a tax planning perspective. Whether you are a director of a small start-up, an established organisation, or a director hoping to extract money from a company prior to sale or retirement, there is a pension opportunity to suit everyone.”

John Finn, Managing Director at Treasury Solutions Ltd., also offered insights into currencies, interest rates and banking market trends: “Post-Brexit and post-Covid, we have seen the good, the bad and the ugly in terms of emerging trends and their impact on the management of finances for SMEs and owner/managers.”  

Also speaking at the event were Mark Flood, Director at Renatus, and Alan O’Dea, Associate Director at Beechbrook Capital, who discussed equity investment, debt and the flexible nature of alternative funding.