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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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Do these kids have any adults supervising them or is this a extract from “Lord of the Flies”.
Can of coke or red bull or one of those monster drinks. Sure teenagers drink these all the time. Without an adult holding their hand
I’m pretty sure my mom or my PE teacher of the chief Beaver-Scout or somebody would have reigned it in a little if I was having heart palpations or my teammates were ending up in hospital.
When you were 17?
coffee should have an over 18 sticker on them and pictures of stressed out people with yellow teeth and broken relationships
Coffee is fine!.. It’s these sugar taurine caffeine laden drinks that are advertised as “energy” that is causing harm.
I am guessing you do not have teenagers in your family, try giving advice to one and see for yourself,
Every person in Ireland participating in sport is taking caffeine drinks, isotonic drinks or protein shakes. Nothing new here.
Have cyclist learnt nothing from the stimulant abuse in their sport
This is cyclists learning and being proactive about it you clown.
Pedlars penis I think they call it
Yet more “supplements”?
Can anybody take cycling seriously?
Who cares if they cycle fast anyway?
I couldn’t care less if they cycled at the speed of sound.
All of them are bores.
Come on now pat, if your going to make an effort make it count
Bores with no skill
No skill? That’s just a stupid thing to say.
You make what effort count Fergeioc?
Caffeine is a dangerous drug if taken in excess.
Nice in a cuppa… either tea or coffee usually.
A great harmless stimulant in a cuppa.
Gets you going in the morning.
.
Caffeine can kill you if taken in excess.
Boring cyclists want to bore us even more with their “hyper-caffeine” performance.
Who cares how fast they cycle anyway?
Nobody at all except themselves.
Calm down pat
Yawn
Not really . It’s an endurance pasttime as opposed to a sport that requires skill such as soccer, hurling, badminton etc. Hence much less substance abuse in these sports as there is only a moderate benefit
FJD descending a mountain road with sharp S bends at 90+ KPH requires a lot of skill, also have a look at downhill mountain biking and tell me it’s not skilful. And Badminton shouldn’t even be described as a sport, it’s just a game, like snooker or tiddlywinks.
Haha F J D. Your naive and clueless if you believe that!
I’d take you on and slam dunk ya with any of those sports without breakfast, never mind performance enhancing products!
Ape
Say what you like but the facts are its because cycling is endurance based and not skills based that substance abuse is rampant within the pasttime.
Go home FJD, you’re drunk..I suppose you’ll say now that there is no skill involved in descending a tricky mountain descent at speeds reaching 80-90 km/HR
Seriously though, if you think drugs are not involved in other sports your crazy! Cycling just happens to be better monitored now, most other sports are rarely tested consistently! Most drugs stay in your system for approx 2 days and normally only tested just before or after an event. Drug use is rampant in every sports off/training season when no testing is done. Your previous comment is not a fact it’s an opinion! Every sport requires skill and the best person wins, foolish to think otherwise!
Am I just stupid or is the idea of having caffeine prior to a work out not moronic in the extreme? I actually avoid all stimulants prior to jogging etc yet have always wondered about the sense of ppl raving about bulletproof coffee etc prior to workouts….
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