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BANKS HAVE BEEN opening up the purse strings to cash-poor owner-operators, but the small business sector desperately needs more investors to fuel their growth next year and beyond.
But Irish small and medium enterprises (SMEs) are becoming even more dependent on the big banks for their capital needs in a market which has been stripped of most of its competition during the recession.
The latest Red C SME credit demand survey also showed the loan rejection rate had decreased significantly – down to 17% either partially or completely refused, compared to 22% for the same period last year and 30% in 2012.
Bigger businesses were more likely than small companies to be successful, according to the survey, which covered the 6 months from April to September.
Meanwhile, the latest “bank watch” survey from the Irish Small and Medium Enterprise Association (ISME), found the demand rate, which measures the share of SMEs that tried to boost their borrowing during the period, was at a 5 1/2-year high.
Weaker businesses lost in “cull”
ISME chief executive Mark Fielding told TheJournal.ie part of the reason for the upturn in successful applications was simply because there had been “a cull” of many less-viable traders during the recession.
“Some of the ones that would have been looking for funding in the past have been taken out of the equation just by attrition,” he said.
But Fielding said the lack of competition in the lending market, which was already a problem during the Celtic Tiger years, was now even worse despite the economy and borrowing demand picking up again.
If you didn’t have enough back then and some of the lenders have left, then you definitely don’t have enough now. At the moment we have, in reality, 2 1/2 banks lending to SMEs.”
The Red C poll also revealed the overwhelming majority of SMEs relied on the two remaining pillar banks – AIB and the Bank of Ireland – for their financing.
More investors needed, not bank competition
Felix O’Regan, from the Banking & Payments Federation Ireland, which represents all the country’s major lenders, said the issue was not about competition – it was the need for SMEs to have more options from financiers willing to get some “skin in the game” as investors.
“All of the research shows that SMEs in Ireland are overly dependent on banking for their finance,” he said.
It’s not a question about pillar banks and non-pillar banks, it’s a question about their being sufficient sources of equity finance for SMEs as they expand.”
Fielding agreed Irish SMEs had traditionally been far too reliant on bank funding and hopefully options for peer-to-peer lending and investment finance would become more viable in 2015.
He said the government could start by offering similar tax breaks for business investors to those dangled in front of property investors for many years.
All this month, as part of TheJournal.ie’s ongoing SME focus, we will be looking back on 2014 – and throwing forward to 2015 – for the small-business sector.
Originally published at 7.15am
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Or perhaps they’ll vote for a candidate who will actually represent them in parliament, rather than those who do nothing but pocket expenses and hold meaningless press conferences
@Stephen Kearon: yep break election promises to do that. Easy know you are a FF man. You think nothing of breaking election promises. The people copped onto you though. Only 40 people voted for you so no one bought into your lies and false promises, you FF weasel
@@at: judging by Mr Kearon’s political history I’d imagine he’s more insulted about SF representatives refusing to swear allegiance to the english queen than anything else.
@Stephen Kearon: Ah the FF man at it again listen Steven everyone knows, That you are a FF man through and through.
The people that vote for SF know that they will not take up their seats in Westminster and are happy that SF are carrying out what they said in their manifesto.
Unlike you’re party that row back on everything after the elections.
@Stephen Kearon: ideal opportunity for you and your ffg buddies to run candidates and swear an oath to the British queen.
@Stephen Kearon: Yet FF or FG won’t contest elections in the north and swear allegiance to the British Queen, talk about kettle calling the pot black.
@Dave Byrne: Fianna Fáil man really? He comes across more like a cross between the Blueshirts and the DUP. But I suppose that’s not much of a leap these days.
@Shane Barry: it’s not their country ! Why would they, no more then they would contest election in mainland great Britain…. Your not very bright kiddo
@Gordon Hughes: Leo Varadkar said he supports a United Ireland and at least half the population of the north are Irish Citizen so yes it is partly our country.
@Gordon Hughes: But he can spell… so he might correctly understand the things he reads. Kiddo.
@Gordon Hughes: Ehmmm… Fine Gael’s Secondary Name is literally “The United Ireland Party”, Fianna Fáil’s “The Republican Party”, that’s why they should! But they don’t bother and haven’t for a century.
@Dave Byrne: Yes SF not showing up great way to save ni form Brexit
@OwenK74: They showed up in Europe and used diplomacy to get wording into the Brexit deal to acknowledge the GFA. All at a time, FG and FF were saying the North must leave with the rest of the UK. The BBC even did a documentary on it. But hey, believe what you want to believe.
She is a bit presumptuous there I think
@@at: a bit? Head in clouds.
Wishful thinking I would say better chance getting the SDLP supporters onboard
Trying to keep a salary rather than keep a seat.
It will be interesting to see what happens the unionist vote in this election
Everyone who refuse to take up ther seats after the Election inc MLAs should not be paid
@pat seery: Spoken like a true Monarchist. You might want to bow to your betters and swear allegiance to the current Queen and all her children and her childrens children. The rest of us believe we are all born equal and believe in Democracy. I think your Prince Andrew proved our point this weekend.
I seem to recall Gildernew lambasting the Irish government for its treatment of Sean Quinn a few years ago. Those comments didn’t age well.
@Clifford Brennan: don’t see how the circumstances have changed. Let’s not forget the Gov have done a deal to convince Quinn to drop his claim against the state. Must have felt their position vis a vis their treatment of him wasn’t too solid in order to stop persuing his half billion as a quid pro quo for dropping aforementioned suit. Aside from that I’m sure you aren’t trying to allege anything else against the man.
@Ivan Connolly: Allege? No not at all. €2.2 billion in unpaid loans to the state and an insurance levy of €1 billion is all. How very dare the state try to recoup this. I can’t fathom who’d decry this. Her party discreetly withdrew suppport as the details emerged. Hubris is a dreadful thing. Fair play to your intuition which deciphered the details of the confidential settlement – “must have felt” is categorical proof now? Its like youre guilty of what you’ve accused me of…
@Clifford Brennan: it’s ok the priest will get him now
@Clifford Brennan: Do you support the attempts to unseat the SF candidate and gifting the seat to a pro Brexit candidate? Very interesting turn by FF and FG. Everyone is watching. It will be publicized.
@DaMoons: Cal, I always enjoy your conspiracies. You literally just said commenters were against the SF candidate and asked should we ask party leaders for their official opinion. In response to my comment, you’ve upgraded your theory to an actual policy by 2 parties. Keep them coming Cal. Its comedy gold.
@Clifford Brennan: You do actually respond like a FG politician. Do you support ensuring the least number of Pro Brexit candidates are elected as possible or do you not care? Genuine question. In case you missed it, The SDLP had one of their prominent members sworn into the House of Lords this week. She swore lifelong allegiance to the monarchy. Would you do that?
@DaMoons: You remind me of Murdock from the A- Team. :)
@Clifford Brennan: Again, would you rather a Brexit supporting candidate win vs someone who wants to minimize the number of pro Brexit MPs being elected. Let everyone see you for what you are and what you stand for. SF has already endorsed a Unionist anti Brexit candidate. You apparently cant do the same.
@Clifford Brennan: dealing in specifics he did not borrow €2.2 billion from the state but from a bank which the state happened to take control of. There is a concept in common law whereby an illegal transaction cannot be later upheld by the law. The transaction was illegal and was only upheld because it was the state that took ownership of that illegal debt. It is also a fact that the state agreed not to pursue the missing €500 million if quinn dropped his suit against them. If you were not privy to that before you may now consider yourself informed. It is merely an opinion that the state felt they didn’t have a sound footing to defend their actions against him but you are free of course to take your own position as you their reasoning.
@Clifford Brennan: I saw the link you posted on a previous thread that you used to try and argue an economic point. It was a made up site which wasn’t dated and had no facts included. You really are scraping the bottom of the barrel mate. You must try harder.
@DaMoons: You’ll have to post a link to that previous thread. I have no idea what you’re talking about Murdock. In fact, I’d bet money you’re telling lies.
@Clifford Brennan: I stand corrected, someone who is arguing your point posted the madey uppy link. You didnt post it. Can you post a link that would counter any of the points i argued?
shes some hope of getting that vote they would give it to the SDLP quicker
Very interesting to see FF and FG commenters supporting a Unionist candidate. They know that the stronger the Pro Brexit parties do in this coming election will do significant damage to the Island of Ireland economy. I hope the Journal follows up and asks their party leaders their official opinions.
“It is an argument Gildernew dismisses, insisting that Sinn Fein’s seven MPs would not have made a “button of difference” in any of the Commons votes on Brexit.”
Clearly she does not understand how a “hung” parliament works. Maybe she means that SF seven MPs are “not worth a button”.
@For Goodness Sake: Or possibly you don’t understand the dynamics of how things are in the British House of Commons. Hmm; tough decision: Anonymous keyboard warrior, or person willing to stand publicly for election even though she already knows the challenge of standing in a difficult constituency …
@Fachtna Roe: “Or possibly you don’t understand the dynamics of how things are in the British House of Commons.” This is the type of tripe that SF put out to explain their abstention and to allow Brexit to progress.
These guys are a disgrace who take the kings shilling but won’t attend exercise their vote. I suppose this will be answered by the usual auld guff.
@For Goodness Sake: Yawn.
@For Goodness Sake: They don’t take a salary…
What’s the point in voting for someone who won’t represent you or show leadership when they need it most
@OwenK74: to counter that, should people vote for people who support and recognize the monarchy ( as the oath lays out, it is the Monarchs God given will) as being the only ones who can approve laws in the North, or should they use their vote to say any laws that pertain to the Irish people should not be at the will of a Monarch to enact at their will. What is your opinion on Democracy?
Shouldn’t be closely fought anyone with any common sense should realise now that clearly DUP style politics is toxic to the island of Ireland as a whole, they are toxic to the economy as a whole and toxic to the people living on this island as a whole. They will be supplicants stooges to some brexit fool with the IQ of a amoeba living on a different island across a sea and will happily jeopardise the welfare of farmers and businesses in NI to get a pat on the head from them.
Those arguing for SF to go to Westminster are making the same mistake as the DUP, even with the benefit of hindsight. Westminster is in the grip of a narrow form of English nationalism that has driven their Brexit policy. SF rallied with the pro remain forces in Europe and got great credit for doing so.
A shame that there are no genuine Left candidates. The mainstream parties will only ever offer softer versions of the free market. SF claims to be Left are farcical, as are SDLPs. The only choice here is between leave and remain. Beyond that, business as usual (literally
Dream on!
Sinn Fein should nominate proxy MPs to do their bidding in Westminster. Separate from SF but with a slant towards a United Ireland and wiling to represent constituents at the big table.
@Stuart Wootten #FBPE: Doubt it would be a runner. There’s literally millions in expenses on the line. Fealty to the freebies is a red line issue.
@Clifford Brennan: thank God, SF are not like your favourite party … they do not give in to feeding at the troughm
have your say