Debts weighing down SMEs despite recovery
Many small businesses can't benefit from the recovering economy because they remain weighed down by legacy debts, a report has found.
The report by insolvency experts Hughes Blake concluded that some SMEs are being forced to restructure to help deal with the debts on their balance sheets. The data chimes with figures from Financial Regulator Cyril Roux earlier in the year when he said two-thirds of bad loans here relate to commercial lending, including property-related debt involving small and medium enterprises.
The Hughes Blake SME examinership index claimed that 331 jobs were saved between April and June.
"The findings of the Index will be a wake-up call for some," said Hughes Blake managing director Neil Hughes. "We would all prefer to think that the rising tides we are seeing in the Irish economy have lifted all boats. But the fact is that many SMEs have been unable to benefit from the upturn because of legacy debts."
Mr Hughes said that while welcome steps have been taken to deal with the mortgage arrears problem, the plight of the heavily indebted SME sector has "remained largely under the radar".