The chief ex­ec­u­tive of busi­ness group Isme ex­pressed con­cern at Cen­tral Bank fig­ures show­ing a fall in lend­ing to new busi­nesses. Page 16

Irish Examiner - - News - Ea­mon Quinn

The chief ex­ec­u­tive of busi­ness group Isme said Cen­tral Bank fig­ures show­ing a fall in new busi­ness lend­ing is more ev­i­dence that busi­nesses are find­ing it more dif­fi­cult to ac­cess loans.

The Cen­tral Bank fig­ures showed the vol­ume of new busi­ness loans of over €1m through the end of May this year was down 12% from the same pe­riod in 2017. The av­er­age costs of new loans for un­der €1m — typ­i­cally the amounts bor­rowed by SMEs — was at 4.51%, six ba­sis points be­low May 2017 lev­els.

Isme’s Neil McDonnell said there was grow­ing ev­i­dence banks were in­creas­ingly re­fus­ing new lend­ing to busi­ness. It is “of con­cern to us”, he said.

He said firms found it rel­a­tively easy to raise loans backed by as­sets such as prop­erty or ma­chin­ery, but “next to im­pos­si­ble” to raise money for work­ing cap­i­tal pur­poses.

It is get­ting “more dif­fi­cult” for firms to raise money, he said. An Isme quar­terly sur­vey last month showed a sig­nif­i­cant jump in the re­fusal rates of loans, while firms were be­ing forced to wait longer for a de­ci­sion to draw down loans.

The Cen­tral Bank bul­letin again showed Irish res­i­den­tial mort­gage rates are the costli­est in the eu­ro­zone, and that de­mand for new home lend­ing has in­creased.

The cost of new mort­gage lend­ing in May was an av­er­age 3.21%, sig­nif­i­cantly higher than the eu­ro­zone av­er­age of 1.8%.

The cost of new vari­able rate mort­gages crept higher in May from April by four ba­sis points, to 3.33%, ac­cord­ing to the fig­ures. Fixed rate mort­gages, which ac­count for over half of all new home lend­ing, was at 3.10%.

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