THE BANKER & THE SME

It would appear banks are taking a novel approach to credit control – they may claim to be making it easier to obtain loans but in reality they are dissuading businesses from even applying for them.

Kevin Ryan, chief executive of Broadband Ireland, says the banks are cutting him and other small businesses off at the pass when it comes to lending, according to a report in The Sunday Times.

“There are a certain number of banks saying informally to firms, ‘don’t apply for a loan, it’s not a good time, there’s no appetite for it,” he says. “It flies in the face of the statistics banks are putting out about their approval rates if people are only applying for loans once they’ve been told there’s a point in applying. The statistics are skewed. They don’t show the whole picture.”

The Irish Small and Medium Enterprises Association (ISME) says 55% of applications are being refused, up from 40% in the past year and growing. Prior to the downturn, that figure had been 20% – a figure that had held steady since the early 1990s.