Almost one in 10 small and medium-sized businesses have closed permanently due to the pandemic.
A survey by SME Recovery Ireland also found 90% of businesses have had a reduction in revenue of over 25%.
It comes ahead of the launch of the Government's July stimulus package next week.
John Moran, from SME Recovery Ireland, said it will have to be radical to prevent more businesses closing.
"It has to absolutely be grants in the first phase until we get firms back on their feet," he said.
"These losses in effect belong to us all because they aren't the fault of the businesses, we asked them to close.
After that, once we have them back on their feet, of course we should provide them with more capital and that should be in the form of loans and should only be provided to firms who have a good shot of recovering through the system."