Improved trading conditions see fewer SMEs seek credit
IMPROVED trading conditions have resulted in fewer SMEs seeking credit from lenders, a survey has found.
The study showed turnover at 74pc of companies has increased or remained stable over the last six months, with more than half making a profit and 23pc increasing staff numbers.
At the same time just 35pc sought extra credit from the bank with 65pc of those applications approved or partially approved.
However one in five applications were still being declined, with the majority of firms not agreeing with the banks decision, a study for the Department of Finance found.
Finance Minister Michael Noonan said the survey shows trading conditions are improving for Irish SMEs.
“A strong SME sector is vital for the continuing recovery of the Irish economy and I am heartened to note that there are further signs in the survey results that confidence is growing among SMEs and their customers,” he said.
“Despite the improvement in conditions, demand for credit remains low with 35pc of the 1,500 SME’s surveyed applying for credit during the six month period.
“Importantly however, the approval rate has improved with 81pc applications approved when ‘pending applications’ are removed. Small businesses that are refused credit should avail of the services of the Credit Review Office, which is overturning approximately 55pc of cases referred to them.”
More than 1,500 businesses were quizzed for the SME credit demand survey, conducted by Red C on behalf of the Department of Finance covering the period October 2013 – March 2014.