Seventy eight percent of Irish SMEs are confident in their ability to borrow if additional capital is required over the next twelve months, and almost one quarter (23%) already intend to borrow in the coming year. This is according to new SME research conducted by Bank of Ireland and Red C.
The research findings are launched in conjunction with Bank of Ireland’s 19th National Enterprise Week (5th-12th Oct), which will see a series of 24 events taking place nationwide, around the theme of ‘Investing for Business Growth’ to help SMEs shape the best investment strategy for their business.
Just over one in three (34%) SMEs identified no change in their volume of borrowing in the last few years. While Brexit is a concern for 48%, along with staff recruitment and retention worries, 53% feel positive about the Irish economy in the next twelve months with more than half (57%) expecting turnover to grow.
As SMEs across the country look to grow - working capital, new machinery and equipment are cited as the top reasons for borrowing. Irish banks lead the way as the preferred option for SMEs looking to raise finance, with over 81% claiming they would consider Irish banks over the Credit Union or private investors.
Speaking this week, Director of Business Banking for Bank of Ireland, Michael Lauhoff said, "The research findings have shed interesting light on current borrowing habits and expectations of SMEs across the country. Interestingly, 60% of SMEs report using personal funds to invest in growth and business efficiencies over the past three years."
He added, "Although the general sentiment towards the economy is positive among SMEs at present, indeed 53% are feeling optimistic about the state of the economy for 2019, it is important that business owners remember to engage in smart borrowing to grow their business while still maintaining sufficient reserves."