Tariffs, Tight Credit, and Ticking Clocks: Irish SMEs need all the support
With finance harder to secure and international trade more uncertain, Irish businesses need quicker decisions, clearer support, and a real plan to weather what’s coming
Although Ireland’s economy continues to show resilience amid global unrest and business confidence among Irish SMEs remains strong (88% feel optimistic about 2025 according to research we carried out earlier this year) small businesses are now facing a growing set of challenges, particularly around access to finance as well as major changes in the international trade environment.
The latest SME Credit Demand Survey from the Strategic Banking Corporation of Ireland (SBCI) highlights the scale of this challenge, with 71% of respondents saying they are concerned about accessing finance and 44% saying they are turning to a blend of traditional banks and non-bank financial providers to support their operations. This sentiment was echoed in a survey from Bibby Financial Services which revealed that over half (53%) of Irish SMEs are now using alternative non-bank funding solutions.
This really isn’t surprising given that traditional banks are increasingly relying on algorithms and automated decision-making for customer service, resulting in many business owners feeling sidelined. The ‘slow no’ era is in full swing, with loan applications to traditional banks taking weeks or even months - to process, often with no communication or clear updates on the process. For many SMEs, it’s become a case of “computer says no”, with zero human contact and no one available to explain the decision or how it was reached.
In contrast to this, alternative lenders are stepping up their game with a more personal and responsive approach. Fast decisions and flexible terms mean SMEs can get on with running their operation instead of chasing down financing options, something that’s now more important that ever as trading conditions become increasingly difficult to navigate for businesses.
Looking at the global business landscape, organisations are really struggling with tariff uncertainty, particularly regarding US trade policies. While a lot of the recent focus has been on UK exporters, Irish SMEs are not immune. Tariffs, shifting trade rules and currency fluctuations are causing great uncertainty that many small businesses simply don’t have the capacity to manage or navigate.
This is now a major challenge for Irish exporters dealing with the U.S. or global markets. Under the latest trade agreement announced this week, a 15% tariff will now apply to most EU exports to the U.S., replacing the previous average of around 5%. While we avoided a more severe 30% tariff scenario, this is still a significant blow, particularly for Irish SMEs that rely on global supply chains or export to the U.S. These businesses will now have to navigate shrinking profit margins, higher operational costs and the risk of declining trade volumes. The long term implications could be detrimental if a second Trump administration expands or intensifies tariff measures, potentially increasing pressure on export driven sectors across Europe.
Our recent Trading Places report revealed that nearly two-thirds (64%) of UK respondents plan to explore new international markets over the next 12 months as shifting global dynamics threaten the flow of trade. Many are also turning to 'friendshoring', which involves building supply chains in politically aligned countries or those with stable trade agreements. While this particular report focuses on the direct impact on British exporters, these challenges are also relevant to Irish businesses. In fact, the Government is already planning to launch an action plan on market diversification to help Irish exporters respond to the threat of tariffs by identifying new markets and supply chains. This is a timely, and welcome move that will be welcomed by the Irish business landscape.
The next six months will be crucial for Irish SMEs as they navigate an increasingly inflexible and impersonal banking landscape whilst also reassessing how they operate in a changing global trade environment.
The SMEs that succeed will be those supported by funders who are personable, understand the pace of today’s economy, and can respond with agility. Businesses must also be proactive – planning ahead, managing exposure, and mitigating currency risks when possible. Those who prepare now will be far better positioned to thrive in what could be another turbulent half-year.
