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Increased Demand for Credit by SMEs


  • Loan refusal rates decrease from 36% to 29%.
  • SME demand for credit increases to 36%.
  • 17% waiting longer than 10 weeks from permission to drawdown.
  • 52% stated that banks are making it more difficult to access finance.
  • Businesses wait on average 8 weeks from decision to drawdown.
  • 17% waiting longer than 10 weeks from permission to drawdown.
  • Lack of awareness of alternative sources of finance.
  • 10% of businesses have had their debt sold by their lender.

 ISME, the Irish SME Association, today (18th October) released its quarterly Bank Watch survey for Q3’18. The results show a small decrease in loan refusal rates, decreasing from 36% to 29%. Demand for credit has increased from 31% to 36%. Waiting time from decision to drawdown is on average 8 weeks. The Association highlights the need for more credit to be made available to SMEs, its concern at the continued high number of refusal rates and the length of time it’s taking for SMEs to access finance. It calls for banks to promote the SBCI funds in a unified manner.

ISME CEO Neil McDonnell said:

“Today’s results remain unsatisfactory. While a decrease of 7% in refusal rates is welcome, this figure is too high. There has been an increase in the demand for credit which is a very real issue facing SMEs. Without sufficient access to finance many businesses will struggle.”

 “It is unacceptable to have a business waiting on average 8 weeks from decision to drawdown. The sharp rise in businesses waiting more than 10 weeks from permission to drawdown in this quarter is a worrying trend. This type of delay is starving already cash-strapped SMEs. Notwithstanding the delays and refusal rates, Irish SMEs are paying more interest on their loans. It costs on average 5% for an Irish SME to borrow €250,000 from a bank, compared with only 3.3% in most other European countries.” 

 He added:

 “In order to avoid delays later in the credit application process, borrowers must ask their bank, before they complete any meeting or review concerning a credit application, if there is any other information the bank needs in order to process the application. If the bank answers ‘no’ to that question, they may not subsequently rely on this excuse in order to delay the application.”

The main findings from the 598 respondents in the third week of September are as follows:


  • 36% of respondents required additional or new bank facilities in the last 3 months, up 5% on Q2’18.
  • 29% of companies who applied for funding in the last three months were refused credit by their banks, a decrease on the 36% in Q2’18.
  • Awareness of the Credit Review Office remained unchanged at 68%. There was a nominal decrease in awareness of the Credit Guarantee Scheme from 67% to 66%, while awareness about the microfinance scheme rose from 52% to 57% in Q3’18.
  • 19% of applications are awaiting a decision late-September, a decrease from 23% in the previous quarter.
  • On average, businesses are waiting 5 weeks for an initial decision on loan applications. The wait time for drawdown was 3 weeks.
  • 17% of initial bank decisions were made within the first week; a decrease from 28% on previous quarter. 17% are waiting 4 to 6 weeks, while 17% are waiting more than 10 weeks.
  • 55% of those who required funding made a formal application, an increase from 47% in the previous three months, while informal applications decreased from 77% to 70%.
  • Of the 60% approved for funding, (16% of whom were partially successful), 60% have drawn down finances either fully or in part.
  • 50% of respondents had cause to be concerned about bank fees and charges.
  • 63% state that the Government is having either a negative or no impact on SME lending.
  • 10% report that their debt has been sold by their lender to another institution.
  • 57% have been with their bank for 20+ years.

 The Association, called on the Government to:

  • Ensure SBCI funds are promoted by banks and used appropriately for SMEs.
  • Ensure there is honest and reliable reporting from the rescued banks.
  • Quickly introduce legislation regulating peer-to-peer lending.

The increased demand for credit is reflected in the number of changes in Bank facility. 33% of respondents requested a ‘New Term Loan’, 12% requested an ‘Extension of an Existing Term Loan’, 2% requested ‘other changes’ to their term loan’, and 4% requested a ‘new overdraft facility’. 21% applied for an ‘Extension of Overdraft Facility compared to 15% in Q2. A further 15% requested HP/Leasing facilities, while 8% applied for Invoice Discounting/Factoring. 

View the full report: here


For further information, please contact
Wayne Tobin, Press, Policy and Research Officer
T: 01 6622755
E: [email protected]


Note to Editors:

This survey was conducted in the third week of September, covering the three months of June, July and August. There were 598 SME owner manager respondents.