This site uses cookies to improve your experience and to provide services and advertising. By continuing to browse, you agree to the use of cookies described in our Cookies Policy. You may change your settings at any time but this may impact on the functionality of the site. To learn more see our Cookies Policy.
#Open journalism No news is bad news

Your contributions will help us continue to deliver the stories that are important to you

Support The Journal
Dublin: 18 °C Wednesday 5 August, 2020

Small businesses believe upturn is 'fragile'

SMEs are holding off on expansion until they feel more positive about the upturn, a new survey has found.

Image: Laura Hutton/Photocall Ireland

IRISH SMALL AND Medium Enterprises think that recent improvements in the economy are ‘fragile’ and are slow to pursue new growth opportunities.

That’s what a new survey of business owners carried out by Red C for the Department of Finance has found.

The credit demand survey report found that there has been a slight improvement in trading conditions during the period from October 2013 to the end of March this year, but that it was to a lesser degree than seen in September 2013.

Notably, it found that for many SMEs, increased sales do not translate into improved profit performance.

Over one-quarter of businesses are still struggling with a decreasing trading performance.

Loan approval rates

Approval rates from banks for applications for credit from SMEs are relatively stable at around 65 per cent when undecided applications are included.

The survey, which took in the opinions of around 1,500 SME owners, found that there is an improvement in perceptions about bank lending to the sector, although many believe that the percentage of approved loans is still too low.

The majority of loans that are approved are done so with conditions attached, although the percentage of loans that go through unconditionally has increased to 29 per cent from 22 per cent last September.

The government also should do more to communicate about the non-bank sources of finance available to the SME sector, Red C recommended, while also flagging a diminishing awareness of the Credit Review Office among respondents.

Read: Here’s how many companies were started every day last month>

Read: SME groups welcome EU report but warn they are still in ‘survival mode’>

  • Share on Facebook
  • Email this article

About the author:

Jack Horgan-Jones

Read next: