- 38% of SMEs say they have established new supply sources for goods, while 32% negotiate new agreements with buyers and suppliers
- One third of SMEs have applied for business funding in the last six months
- Average planned investment falls more than 40% when compared to same period last year
Irish SMEs have increasingly been innovating and adopting new measures to help cope with the fallout of Brexit by establishing new supply sources for goods and negotiating new agreements with buyers and suppliers, according to the SME Ireland Confidence Tracker for Q3 of 2019, published by Bibby Financial Services Ireland, a leading provider of financial support and funding solutions to Irish SMEs.
The research shows that 38% of SMEs say they have established new supply sources, while 32% have negotiated new agreements with buyers and suppliers. One third say they have applied for some form of business funding in the past six months.
The proportion of SMEs exporting and importing has increased in line with this, by 8% and 6% respectively, compared to Q1 of this year. However, the survey also revealed that, while almost two-thirds (64%) of Irish SMEs believe Brexit will have a negative impact no their business, a third of businesses have not prepared for it in any way.
The report’s findings also indicate that there has also been a dramatic drop in confidence in the Irish SME sector over the past 12 months, with the average planned investment of €80,000 for the next three months representing a 40% drop when compared with Q3 of 2018. In addition, less than half of all SMEs surveyed expected sales to increase over the next three months.
Half of all SMEs not intending to invest cited the uncertainty arising from the UK’s exit from the EU, while 45% also pointed to an uncertain economic environment within Ireland. For those that are investing, a need to reduce operating costs and increase efficiencies was cited as the primary reason by 30% of businesses, followed by a need to stay ahead of competitors.
The SME Confidence Tracker, produced by Bibby Financial Services Ireland, is a national survey of over 200 small and medium sized enterprises across the Republic of Ireland, conducted on a bi-annual basis. The full report is available here.
The survey also found that over a third of SMEs (35%) suffered a bad debt over the previous 12 months, with the construction and transport sectors most likely to be affected.
SMEs were asked if they had applied for business funding over the past. Of the third that had done so, most had applied either to a bank or for a government grant.
Mark O’Rourke, Managing Director at Bibby Financial Services Ireland, said: “It’s clear that Irish SMEs are cutting their cloth to suit their needs and attempting to insulate themselves as much as possible from the fallout of Brexit. Even with a withdrawal agreement in place, Brexit is set to hugely disrupt existing business and export practices and add further costs and red tape to businesses importing and exporting to the UK.
“While it’s certainly encouraging to see SMEs diversifying their approach, it’s crucial that more businesses begin to look beyond the UK and shift more of their imports and exports to other markets.”
Bibby Financial Services Ireland is a leading provider of financial support and funding solutions to Irish SMEs. The company helps businesses to thrive and grow in domestic and international markets by providing tailored and flexible funding solutions for a range of scenarios including cashflow funding, new equipment purchase, growth and expansion, management buy-ins and buy-outs, refinancing, corporate restructuring and mergers and acquisitions.
Bibby Financial Services Ireland’s funding portfolio includes confidential invoice, trade and export finance, foreign exchange services, bad debt protection and specialist funding for a range of sectors. With a 95% client satisfaction rating, our clients have confidence that we support their business.
Bibby Financial Services Ireland is part of Bibby Financial Services Group, a leading global financial services partner operating in 40 locations across 14 countries. With 40 years’ experience, the business has a funding capability that exceeds £1 billion and an annual collective client turnover of £10.1 billion.