SBCI urges SMEs to explore new sources of funding

  • CSO survey finds few SMEs medium-sized enterprises looked for finance from non-bank sources
  • SBCI loans currently available from 3 banks and 2 non-bank lenders
  • SBCI will add new lending partners during 2016
  • Shopping around may deliver significant benefits to SMEs and will help drive competition – SBCI CEO

Thursday 3 March 2016: The Strategic Banking Corporation of Ireland (SBCI) has today urged Irish SMEs to explore new sources of funding in addition to traditional bank lending.

SBCI Chief Executive Nick Ashmore said Irish SMEs are more dependent on banks than SMEs in other countries and that they should be alert to the increasing number of non-bank funding options that have emerged in recent months.

“Irish SMEs have been paying more to borrow than similar businesses across Europe. The SBCI is addressing this by introducing new low-cost, SME-friendly financing options to the Irish market and Irish SMEs should look at the growing number of financing options – both bank and non-bank – to see what best suits their needs”, he said.

Mr Ashmore was speaking after the Central Statistics Office (CSO) published a survey today that showed few medium-sized enterprises looked for finance from non-bank sources.

The SBCI recently teamed up with two non-bank lenders – Finance Ireland and Merrion Fleet – to provide a new range of low-cost SME financing options such as leasing, hire purchase and fleet finance facilities.

“Through Finance Ireland and Merrion Fleet, the SBCI has made €75m in new low-cost funding available to Irish SMEs through non-bank lenders,” said Mr Ashmore. “This is in addition to the €675m we have made available to SMEs through AIB, Bank of Ireland and Ulster Bank. Any SME that has not considered non-bank lenders could be missing out on low-cost, innovative financing that can help them grow their business”.

The CSO survey also found that 45% of SMEs choose to borrow from a particular bank because they already have an existing relationship with it, while 22% do so because the bank has a local branch presence.

“This suggests an opportunity for SMEs,” said Mr Ashmore. “Shopping around may deliver significant benefits for SMEs by giving them lower-cost longer duration funding or more flexible terms,” he said.

The SBCI plans to introduce more non-bank lenders to the Irish market in the coming months.

The CSO report can be accessed here.