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Dublin: 10°C Tuesday 19 January 2021
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Call for SME debt forgiveness to drive recovery

With the market in Ireland dominated by large companies, small business needs to shed the burden of debt and innovate to compete.

Minister for Jobs Richard Bruton with report Author Joe Carr (r) at the launch yesterday
Minister for Jobs Richard Bruton with report Author Joe Carr (r) at the launch yesterday
Image: Colm Mahady/Fennells

A PARTNER IN one of Ireland’s top consultancy firms has called for more sustainable solutions for the overhang of debt in Ireland’s SME sector to be rolled out.

Joe Carr of Mazar’s said of large SME debts, which are often linked to property investments during the boom:

“Certainly it makes a lot of sense to find some sort of workable solution, so if it’s parked, it it’s written off, whatever it is, SMEs can get back onto their business.”

He continued: “That’s an emphasis that should be brought in and we should work through that overhang as fast as possible.”

Report

Carr was speaking at the launch of a report into the SME sector. It found that the top 0.2 per cent of Irish businesses dominate the Irish market.

If Irish SMEs are to improve their chances of competing, he said they must address several shortcomings.

The report found that Irish SMEs are the worst surveyed when it comes to winning market share from large businesses.

He said that small businesses were hit particularly hard by the collapse of the economy and the level of austerity that was enforced thereafter.

“They simply couldn’t get enough money.”

Recovery

Carr said that businesses have to make an effort to understand their customers better and diversify their offers accordingly to survive.

They also must “build financial strength and resilience – we need to move away from the dependence on banks for short term financing. We need to strengthen our balance sheets, build up our earnings, and perhaps merge.”

He also said that the decline of the construction sector had hit intertwined SMEs particularly hard. He advised that the building trade needs to double in size at the moment, from its current low level of around five per cent of economic output.

What can be done to improve access to finance for SMEs?

The Government wants to hear from cash-strapped SMEs>

About the author:

Jack Horgan-Jones

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