SMALL IRISH COMPANIES are too reliant on the big banks for loans but are behind the times in taking up the latest finance options like crowdfunding.
Those findings come from Economic and Social Research Institute (ESRI) research which will be handed out today at a conference about funding small and medium enterprises (SMEs) during times of economic recovery.
It said the overall demand for SME lending was expected to stay level – at about €57 billion for the entire sector – but the share being spent on property was going down.
The ESRI’s Dr Martina Lawless said Irish firms mainly turned to banks for loans which left them vulnerable to any funding problems in the sector.
“Encouraging firms to access the broader set of potential funding sources would provide a more robust financing environment for SMEs and support growth and investment,” she said.
“There are a range of novel funding options, such as crowdfunding, that just are currently overlooked by many companies”.
Kickstarter, one of the world’s most popular crowdfunding sites, recently launched in Ireland after more than €1 billion had been pledged through the organisation overseas.
In the too-hard basket
The groups representing Irish SMEs have previously complained about long delays in getting bank loans approved and the difficulty for some businesses in financing growth.
SMEs employ nearly 70% of private-sector workers in Ireland and account for about half of all business turnover.
The ESRI also found:
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READ: Irish small businesses are getting hungrier for credit
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