Central Statistics Office (CSO), through its recently conducted survey, says that small and medium-sized enterprises (SMEs) in Ireland heavily depend upon the bank loans, which are the most popular and most sought after type of finance option for them. The survey reveals that more than a fifth of all SMEs had sent their loan applications to banks in 2014.
The survey indicates that the majority of the startups or those that have been in the market for some time, and have been able to establish themselves as that with small or medium holdings in the market prefer bank finance over any other type of finance.
The survey reveals statistics of exactly how many enterprises applied for bank finance in 2014. And according to the CSO’s Access to Finance survey, almost fifth of all small and medium sized enterprises (SMEs) have ventured out exploring for the options that bank finance offer and further making a decision of choosing this option for their businesses.
Other than small and medium sized enterprises, there are also numerous micro sized enterprises that have engaged in the application for bank finance. A total of twenty percent of these micro – sized enterprises were reported to have applied for bank finance. This brings the amount of applications for small sized enterprises up to thirty five percent where medium sized enterprises remain thirty nine percent, accordingly.
The main reason mentioned by most of the small and medium – sized enterprises that led them to explore the bank finance options is the fact that the given benefits have helped them in getting immense success. The survey further found that exporting SMEs succeeded much more than the non-exporting SMEs while applying for bank finance. Around ninety -five percent of exporting SMEs gained immense success as unlike the non-exporting enterprises, which recorded a success ratio of almost sixty – seven percent, obviously, both stand apart in their success ratio.
The survey revealed that the Information and Communications (ICT) sector was least interested in opting for the bank finance options as compared to the other sectors irrespective of the fact that they would gain greater success if ever they ever went through this way.
The Strategic Banking Corporation of Ireland (SBCI) even encouraged or rather, pressurized Irish SMEs to explore alternate sources of funding other than the traditional banking lending options to enjoy greater benefits. SBCI Chief Executive, Nick Ashmore was heard saying that the Irish SMEs heavily depend upon the banks as compared to the SME’s in other countries. He even alerted by saying that these SMEs should wary off the ever-emerging and rising number of non – bank funding options.
“Irish SMEs have been paying more to borrow than similar businesses across Europe.”
The Big Red Cloud Chief Executive, Marc O’Dwyer, further said that there was a very clear line of difference between the export-oriented SMEs and non-export-oriented SMEs. He also brought to light the struggle that both micro and small type of businesses have to go through in Ireland.
Concluding, Marc says this report reminds the upcoming Government of its elected responsibility toward the 190,000 small businesses in Ireland.