Red C report shows encouraging trend on credit demand for SMEs

Welcoming the Red C report on the demand for credit by SMEs, Fine Gael Cork North West Deputy, Áine Collins, said that while the demand for credit is still soft at 40%, it is heartening that 76% of applications are now being approved by the banks.

Deputy Collins has encouraged SMEs who have been refused loans by their banks to appeal the decision to the Credit Review Office, which is now overturning 55% of decisions.

“SMEs are the lifeblood of our economy and are responsible for hundreds of thousands of jobs across the country. Ensuring they have access to credit is key to allowing them to play their part fully in our economic recovery.

“This report, which is the most comprehensive survey of SME credit demand in Ireland, covering over 1,500 respondents and just under 5,000 direct calls to SMEs, gives us an insight into how businesses view their prospects of obtaining loans and how many of them are seeking credit.

“The Government has put a range of measures in place to ensure that even those businesses who may be operating in areas that are unfamiliar to their banks have access to the funds they need. In Cork, organisations such as the Cork Foundation, which has been set-up by group of local leading businesses and public figures, is attempting to further bridge the funding gap by making loans, equity stakes and grants available for those who demonstrate good business ideas and a determination to turn them into commercial enterprises.

“Chambers Ireland today called for more funding to be made available to businesses, through the National Training Fund, to show them how best to prepare and present high quality loan applications. In March, I launched a report on the value of mentoring in SMEs, which is currently with the Department of Jobs, Enterprise and Innovation. The report outlines the benefits to be gained from putting mentoring supports in place to show fledgling businesses the pitfalls to be avoided and the best ways of achieving success in, for example, filling out loan application forms.

“I welcome this report today and continue to encourage businesses who are in need of credit to take what to many would be the obvious first step and speak to their bank. People must also not be dissuaded from initial rebuffs from their banks and must complete the full applicant process in order to accurately determine their suitability for a loan and so that they can have their credit needs met.”