Sunday 23 October 2016

New finance firm targets agriculture and construction SMEs

Sean Duffy

Published 06/10/2016 | 02:30

Donal Murphy, the managing director of Bluestone Ireland
Donal Murphy, the managing director of Bluestone Ireland

Bluestone Asset Finance is to offer support to the Irish SME sector through the provision of alternative financing options for plant and machinery, the company said yesterday.

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The firm is aiming to target fledgling SMEs and self-employed contractors who are seeking to buy machinery for agriculture or construction. Blue Asset will offer hire purchase and lease financing for firms who have been trading for a minimum of 12 months.

Potential loans have a minimum advance of €10,000 up to a maximum of €300,000 over a five-year term.

"Our research indicates that there are over 3,000 new businesses that have been trading in Ireland for 12 to 24 months," said Donal Murphy, managing director of Bluestone Ireland.

"Access to finance remains acute for many of these young businesses and we believe there is a gap in the market for this underserved group.

"The number of new business starts rose by 13pc in the first quarter of this year and as the economy continues to recover and grow, so too will the number of new businesses requiring access to commercial asset finance."

Bluestone is seeking to serve a range of customers who are underserved by the so-called Pillar banks.

A report from the IMF last month said that credit lines in Ireland for SMEs from traditional banking sources were some of the worst in the European Union.

The second quarter of this year has seen a rise in the number alternative finance firms entering the Irish market.

Irish banks have been reluctant to lend to SMEs since the Crash due to a vast swathe of outstanding non-performing loans still held by Ireland's main institiutions.

Lending to small businesses is now up by over 35pc compared to 2014.

Last month the Irish Small and Medium Enterprise Association (ISME) insisted that banks were still taking too long to process loan applications.

ISME added that the refusal rate of loans to small businesses-of 35pc-actually increased in the second quarter of 2016.

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