90% of SMEs say the Government need a full review of the supports they offer businesses to ensure they are fit for purpose

New research by Bibby Financial Services Ireland reveals:

• 56% believe the government is not doing enough to support female entrepreneurs
• SMEs planning to invest an average of €275,969.91 in the next 12 months
• Top areas of investment include recruitment (28%), digital technology/IT (28%) and staff training and development (28%)
• Just over half (53%) of those using external finance say their incumbent bank or financier has reduced the amount of finance available to them in past six months – while one third (34%) say their business has been rejected for external finance in past year
• 52% say if they had to find external finance, they wouldn’t know where to start, while 42% say they don’t know who to trust for business financial information and advice

90% of SMEs say that the Government need to implement a full review of the supports they offer businesses to ensure they are fit for purpose, with 52% saying the government are doing more to support large foreign direct investment multi-national companies than SMEs. This is according to research conducted by Bibby Financial Services Ireland, a leading provider of financial support and funding solutions to Irish SMEs.

In addition, 56% don’t believe that the government is doing enough to support female entrepreneurs.

Irish SMEs say they are confident about business prospects and opportunities over the next 6 months, sharing an overall positive outlook. This is despite costs remaining high, with just over one in three SMEs just about breaking even (31%), furthering rationale for Government to reassess the supports they offer.

The research shows that 67% of all SME’s expect their sales to increase over the next six months, and more than half (53%) see attracting new customers as a key opportunity for their businesses over the next six months.

When asked how much they plan to invest in their business over the next year, the average figure quoted by businesses, excluding those with no plans to invest, was approximately €275,969.91.

Some of the key areas that SMEs are planning to invest in include:

• Staff recruitment (28%)
• Staff training and development (28%)
• Digital Technology/IT (28%)
• New products/services (27%)
• Sustainability (25%)
• Machinery and Equipment (25%)

When it comes to financing their business, one third (33%) of Irish SMEs surveyed by Bibby Financial Services say they use a form of external business finance, while 15% say they would consider doing so in the next 12 months.

The report also shows that while businesses have the ambition and inspiration to grow their business, they don’t always have the finance required. One third of (34%) SMEs say their business has been rejected for external finance in the past 12 months. This goes up to 61% of businesses that have suffered from bad debt in the last 12 months, demonstrating the impact of bad debt on SMEs’ ability to grow.

Of those that use external finance, 53% say they have experienced their incumbent bank or financier reducing the amount of finance or credit they have made available to them in the past six months. The top reasons given by banks/financiers for reducing finance are:

• Business now being considered high risk (38%)
• Inadequate collateral (30%)
• Business performance (30%)
• No longer meet financiers credit criteria (28%)
• Lack of business growth potential (25%)

When asked about their preferred source of external finance, 15% of SMEs preferred to utilise Invoice Finance. Given the fact that business loans, credit cards and overdrafts require a business to take on even more debt – at a time when they don’t need it - SMEs should be considering more sustainable and long-term solutions such as Invoice Finance, a facility that offers businesses access to money outstanding from their unpaid invoices, helping them to access income they have already earned but not yet received.

When SMEs are looking for information or advice on their business’s finances, the top places they turn to are:

• Professional network – (44%)
• Professional business / financial adviser – (43%)
• Google or another search engine – (31%)
• Existing business finance provider – (25%)
• Friends and family – (24%)

In addition to this, 65% of businesses say they wish there was more unbiased and accessible financial advice available online for SMEs, with just over half (52%) saying that if they had to find external finance, they wouldn’t know where to start, and 42% saying they don’t know who to trust for business financial information and advice.

Although the majority of SMEs are quite positive facing into the year, challenges and concerns were noted. When it comes to identifying the key challenges that SMEs are facing for their businesses, energy costs (44%), inflation/high costs (43%), interest rates (29%) and recruiting new staff, in addition to labour shortages (25%) are some of the biggest pain points.

Wage expectations and labour costs (16%) as well as domestic taxes such as business rates (16%) were also considered financial pinch points for SMEs.

Mark O’Rourke, Managing Director of Bibby Financial Services Ireland, says the results very much demonstrate an enduring resilience amongst the Irish SME community despite dealing with economic volatility, thanks to a range of domestic and international financial hurdles that remain largely outside of their individual control.

“In light of the upcoming budget, we urge the Irish Government to prioritise enhanced access to finance for SMEs, as recent data reveals some concerning statistics, like just over one in three SMEs barely breaking even.

“While there are encouraging signs of recovery, the fragile state of many small businesses underscores the urgent need for targeted investment from the Irish Government. Without adequate support, the potential for widespread business closures could spell disaster for the broader economy.

“Streamlining and improving the accessibility of information for SMEs, providing financial supports through grants and subsidies or tax schemes, and government investment in upskilling, mentorship and networking events are all ways that the government could work to support this sector.

“It is imperative that the government takes decisive action to safeguard the future of these vital businesses.”

Download the full report here.

More about us:

Bibby Financial Services Ireland is a leading relationship-focused funding provider of invoice finance solutions for Irish SMEs. In over 18 years of experience, we continue to provide a wide range of flexible, specialist working capital solutions that help Irish businesses grow in domestic and international markets by giving them access to cash tied up in invoices through invoice financing.

As an approved SBCI partner, we provide favourable rates and dedicated support to all SMEs. In addition, we have joined forces with PTSB to offer businesses the best possible range of solutions to improve cash flow and fund business ambitions.

We offer tailored and accessible funding options, such as invoice financing, for a range of scenarios including new equipment purchase, growth and expansion, management buy-ins and buy-outs, refinancing, corporate restructuring and mergers and acquisitions.