According to the Small Business Act (SBA) Fact Sheets access to finance remains one of the most problematic SBA areas for Irish SMEs. The credit crunch is squeezing entrepreneurs and small businesses in Ireland more than their counterparts in other EU countries. In 2011, the cost of credit for small businesses (loans under one million euros) was 29% higher than for larger enterprises that usually need loans of over one million euros. This is an increase from 2010, when the gap stood at 26%. At the same time, the general credit conditions and standards banks apply to SME borrowers seem to have been relaxed slightly from 2009 to 2011. The percentage of rejected loans has only slightly decreased, from 28% to 27%, but fewer Irish business owners report that banks are less willing to provide loans.
The institutions and systems that help provide access to finance, such as credit registry bureaus and the legal rights system, are as strong as in most other EU countries.
On the policy front, work is nearing completion on the introduction of a Temporary Partial Credit Guarantee Scheme to facilitate additional lending to SMEs who have difficulty obtaining commercial loans. The Scheme will provide banks with a level of guarantee against losses on qualifying loans to SMEs, enabling them to access enough credit to maximise growth potential and job creation opportunities.
In July 2011 the Minister for Finance signed a Statutory Instrument increasing the limit for loan applications that can be reviewed by the Credit Review Office from EUR 250 000 to EUR 500 000. The Central Bank of Ireland and the Financial Services Regulatory Authority introduced a new Code of Practice for Business Lending to SMEs in January 2012. Its provisions include the right of borrowers to appeal the decisions of the Credit Review Office relating to alternative repayment arrangements.
Research, articles etc.
|Key indicators on access to finance|
Source: Chart compiled using ECB data
Note: Loan volumes and interest rate data for 2012 are to the period September 2012 only (due to data availability as at November 2012).
Download data [192 KB]
Source: Chart compiled using EVCA data
Download data [191 KB]
|Business angels finance|
Appendix: ACTIONS SUPPORTING ACCESS TO FINANCE FOR SMEs (PDF) [283 KB]