One of Ireland’s leading independent invoice finance providers Bibby Financial Services has today called for a joint approach by lending providers to tackle the lack of credit made available to Irish SME’s following on for reports from the Central Bank that lending to Irish businesses has fallen by 4.5% on an annual basis in April.
Graham Byrne, Spokesperson for Bibby Financial Services said: “The latest lending data outlined by the Central Bank highlights the plight facing Irish firms who are now facing a double threat as they attempt to keep their businesses afloat. Despite the Government’s efforts to encourage traditional lenders to release credit Irish SME’s are facing a closed door policy. with credit being released on an ad-hoc basis.
This combined with a culture of late payments stemming from practices endorsed by Government legislation, is having a crippling effect on SME’s struggling to survive. Irish SME’s are the heart of the economy yet access to credit is as elusive as ever. Traditional lenders are unwilling to do business with what they perceive to be high risk candidates which is hindering Ireland’s economic recovery. It is incumbent on all who are in a position to address this situation to work effectively together to bring about change.”
As highlighted by the ISME, Irish Small & Medium Enterprises Association, clear and decisive action is required to make lending institutions aware of their responsibility to free up credit at a time when ’almost half of companies (48%) are experiencing delays in customer late payment of over three months, the highest on record’.
“We are of the belief that if traditional lenders are unwilling or unable to offer credit that alternative forms of finance should be recommended to ensure that SME’s have the cash flow in place to run and grow their business. The fact is that traditional lending institutions have a responsibility to advise clients on all the options open to them.
“There are alternative finance solutions available to ease the cash flow burden Irish SME’s are experiencing. Invoice finance is a viable alternative cash flow solution. Irish SME’s need look at their options, whether they are caught in a cycle of late payments and lack of credit or to find alternative finance solutions to fund their business going forward. Invoice finance facilities offer an immediate and flexible way of supporting a companies cash flow, financial institutions and government have a responsibility to educate SMEs and highlight all options available to them in order to keep Ireland in business,” Graham Byrne concluded.