Irish small businesses report profit and upturn from last year
A new survey has found that a sizeable majority of Irish small and medium-sized enterprises have reported profits over the past year and believe trading conditions are favourable and improving.
This information is supported by the latest SME credit demand survey, published by the Department of Finance, that also shows positive attitudes towards borrowing and the willingness of banks to lend.
The study, conducted by Behaviour & Attitudes, surveyed more than 1,500 companies and covered a six-month period between October 2016 and March 2017.
84% of respondents said trading conditions had remained favourable for small businesses and 61% said their enterprise had made a profit over the six-month period.
Minister for Finance, Paschal Donohoe, commented on the survey stating: “The results show that demand for credit continues to remain low from micro and small-sized enterprises. However, encouragingly, the number of businesses reporting a profit has increased for the fourth year in a row, and a higher proportion of SMEs than ever are pursuing a growth strategy.”
Although just under half of respondents believed banks were lending to small and medium-sized companies, one in five participants said they had requested credit and almost nine in 10 of those said their request had been granted. Of those that had not applied for credit, almost all said the reason was they did not need it. Only 1% did not seek credit because they thought it was too expensive.
The top reasons for companies seeking loans were for working-capital and cash-flow requirements 31% followed by expansion plans at 23% and the purchase, replacement or leasing of new vehicles or equipment, 21%.
The full report, available here, states in its commentary: “The lending picture of the banks to those still applying for credit is also very positive, with significantly higher approval rates (86%) across all company sizes. There is however some evidence those applications for growth are slightly more likely to be declined by the banks, and this needs to be addressed in order to encourage the desire for growth across the SME sector.”
Last updated: 4th July 2017