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Thousands of bar owners could end up defaulting on their mortgages in the coming months, according to the organization representing Dublin publicans.
The Licensed Vintners Association (LVA) says that once the six-month moratorium on mortgage repayments set by banks in March expires at the end of this month, many publicans will still be unable to repay their loans.
As a result, they will technically be deemed to be in default, says the LVA, a designation that could damage their credit rating.
Publicans are upset by the government’s decision to further delay the reopening of pubs that don’t serve food due to the level of Covid-19 still circulating in the community.
They are also disappointed with the support package announced last week by the government to help the pub sector, where these so-called “wet pubs” have been closed for six months.
The LVA has criticized the measures as “insignificant” and a “symbolic gesture”.
He notes that pubs closed for six months are receiving the same level of assistance from the state as businesses in Kildare that were forced to close for a month due to re-imposition of restrictions following a surge in virus cases.
The winegrowers’ association said it has discussed the issue of mortgage default with banks, who have confirmed that the breaks cannot be extended any further.
“We are extremely concerned that the decisions made by the Government and NPHET last week will lead thousands of pubs across the country to default on mortgages,” said Donall O’Keeffe, CEO of LVA.
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“First of all, the Government and NPHET have once again prevented these pubs from opening their doors, so they have no income for the business. On top of that, they announced an insignificant and symbolic gesture of a package offering almost no support to These companies. . “
The LVA claims that only a small amount of the € 16 million aid package announced by the government will actually consist of grants for closed bars, which is what they need.
“Most of these are small pubs that are in the lower licensing band and will be owed a total of an additional € 1,600 in grants,” O’Keeffe said.
“For next Sunday, when they will be closed for 25 weeks, that will be an average of € 64 extra per closing week. It does not come close to covering the costs faced by these businesses, which are closed by order of the Government. “
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