16th July 2014
Fine Gael TD for Kildare North, Anthony Lawlor, was today (Wednesday) involved in the publication of a Report on Access to Finance for SMEs by the Joint Committee on Jobs, Enterprise and Innovation, of which he is a member. The report recommends making the process more transparent with access to finance more readily available across the banking sector.
“Small and medium businesses are the backbone to our society and have suffered severely during the recent economic downturn. Despite protestations by the banking sector that money is readily available to SMEs, it is clear that an over reliance on bank loans and overdrafts is a problem facing most companies, with very few alternatives to banks for which to apply for funding. Furthermore, cumbersome paper work and long waiting time for loan approvals are seen as major deterrents.
“For the last few months, stakeholders across the business and banking sectors have met with the Committee to inform members of their experience of finance available to small and medium businesses. The most glaring outcome of these hearings was the divergent opinion between the banks and the SME representative groups in relation to bank lending. It is clear that the reality on the ground as expressed by businesses is very different to that claimed by the banks. The Committee therefore is calling for an independent verification of lending rates across the banking sector, with the Central Bank the appropriate body to carry out these checks and balances.
“Along with this suggestion, the report makes in total 25 recommendations including:
It should be mandatory for banks to provide detailed written explanations as to why a particular application for credit has been turned down.
Loan applications should be dealt with by banks within a specific timeframe and a response should be provided within two weeks at the latest.
There must be greater supports for small businesses to improve their financial literacy with particular emphasis on the drafting of business plans.
Credit Unions should have a greater role in local job creation and in supporting SMEs.
Alternative sources of funding should become available to SMEs such as crowdfunding
“As a member of the Committee I will continue to press for all the recommendations as outlined in the report to be implemented and am willing to meet with local businesses to hear of their ongoing experiences.”
Notes the Editor: Report can be accessed here: