MINISTER for Finance Michael Noonan has set out the measures the Government is taking to improve access to credit for small business.
He was speaking at the Strand Hotel as he opened a session which brought together Limerick bank officials with representatives from Limerick Chamber and others representing the local farming, hotel, pub, retail and other sectors. The session was chaired by Minister for Small Business John Perry and was also attended by John Moran, the Mungret native recently appointed secretary general at the Department of Finance.
“We need a financial system that is better suited to the needs of our smaller company sectors. Financing the productive capacity of the economy is critical to long-term economic success,” Minister Noonan said.
“While large businesses have various options open to them, including the capital markets, small businesses are heavily dependent on the banking system and particularly on their local banks.”
Monday’s meeting was an opportunity for local businesses to discuss the findings of a report by consultants Mazar’s for the Department of Finance last year.
While the Small Firms Association and ISME have complained that banks are holding on to their money and starving small business of credit lines, Mr Moran told the Limerick Chronicle that one of the key findings of the Mazar’s demand survey was that many businesses are reluctant to take out loans in the current climate.
“One of the points about lending is that you tend to hear more, as is natural, from people that don’t get a loan than from the people that do,” he said.
“And I think we do see that there is a demand problem. People genuinely don’t feel that they want to expand their businesses now and they prefer to wait. And a lot of the businesses that are looking for cash are people who, perhaps, especially with smaller businesses, aren’t properly looking at cashflow analysis, are running out of money and are running to the bank.”
*See today’s Limerick Chronicle for a full version of this story