Dáil Éireann Debate, Thursday - 26 March 2015
127. Deputy Bernard J. Durkan asked the Minister for Jobs, Enterprise and Innovation the extent to which lack of working capital continues to be identified by indigenous small enterprises in the manufacturing and services sectors as an obstacle to expansion; the degree to which these issues have been brought to the attention of the relevant authority; and if he will make a statement on the matter. [12572/15]
Amharc ar fhreagraSince this Government came to Office in March 2011, it has worked across its various Departments and Agencies to ensure that all enterprises have access to appropriate finance for both working capital and investment. The SME State Bodies Group, chaired by the Department of Finance and with members from all relevant 'access to finance' Departments and Agencies was established and works to deliver on this agenda for all SMEs, primarily through its work under the Action Plan for Jobs process.
My Department put in place 2 novel credit schemes: the Microenterprise Loan Fund and the Credit Guarantee Scheme to support viable enterprises, from all sectors, who have been refused bank credit. Both Schemes have been the subject of review and appropriate improvements to both Schemes are in train. My Department also provides a range of equity and venture capital finance through its Agency, Enterprise Ireland.
The Minister for Finance has established the Strategic Banking Corporation of Ireland (SBCI). The SBCI will the ensure access to flexible funding for Irish SMEs by facilitating the provision of:
-Flexible products with longer maturity and capital repayment flexibility, subject to credit approval:
-Lower cost funding to financial institutions which is passed on to SMEs; and
-Market access for new entrants to the SME lending market, creating real competition.
Given the extent of supports available I am happy to direct the Deputy to the supporting SMEs Online Tool, which is a cross-Government initiative to help enterprises, entrepreneurs and start-ups to navigate the range of Government business supports for which they may be eligible. The Tool is available at: www.actionplanforjobs.ie.
In order to inform the work on access to finance for SMEs, the Department of Finance produces a Credit Demand Survey every 6 months, the last one being for the period April 2014 – September 2014. This Survey covers the entire SME sector and is broken down by size into: micro, small and medium enterprises, and does not produce data at sectoral level.
This latest Survey has found that improved trading conditions mean that far fewer companies are seeking credit in order to survive day to day financial pressures. Only just under half (48%) of those SMEs seeking finance between April and September 2014 did so for working capital needs, compared to 61% in the previous period. Improved turnover and profit have led to a greater proportion of SMEs suggesting they fund working capital through internal funding/retained earnings (68%). It also appears from this Survey that banks are currently more likely to approve funding for working capital (71%) than for growth (64%). Decline rates for growth stand at 17%, with the decline rate for working capital at just 13%. Any SME who has been refused bank credit or has issues with the terms and conditions offered can appeal these decisions to the Government's Credit Review Office.
