Tight-fisted banks are putting half of firms in jeopardy
Sunday Independent Business Owners Survey 2011
Published 07/08/2011 | 05:00
NEARLY half of Irish businesses have been put in jeopardy by banks refusing them loans, according to this year's Sunday Independent Business Owner's Survey.
The survey was sent out to 300 businesses and was concucted over the past few weeks.
The survey found that a staggering 44 per cent of business owners said their company -- and the fate of their employees -- had been put at risk by banks refusing them credit.
One-in-two entrepreneurs, however, said they were able to secure adequate credit to keep their businesses afloat.
While banks have claimed that eight out of every 10 business loans are approved, most loan refusals are not recorded by banks and the real refusal rate on business loans is closer to 54 per cent, according to Mark Fielding, chief executive of the Irish Small and Medium Enterprises Association (ISME). "We're coming through the worst three years that the country has ever faced economically and banks are using that as a reason to refuse good businesses credit," said Fielding.
"On average our members have been in business for 12 years, but the banks don't care about a business's history -- they're just looking at what happened last week."
Mr Fielding said that many Irish banks did not have the expertise to deal with loan applications from Irish businesses as many younger bank managers were undertrained and inexperienced.
"It's a combination of responsibility being taking away from branches over the years and a flight of talent among quality bank managers at branch level when they saw the writing was on the wall," said Mr Fielding.
"Many younger bank managers simply can't read a profit and loss sheet."
Sunday Indo Business