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