Big banks highlight greater ease for SMEs to gain loans
Up to 11,000 Northern Ireland businesses could get a bank loan more easily than they think, according to new research from the British Bankers Association (BBA).
Today's survey claims that SMEs could expand, order more equipment or boost their spending power if they were more aware of their good prospects of getting bank finance.
The research has identified that while 20% of businesses in Northern Ireland intended to borrow to finance expansion only 12% actually ended up doing so – a difference of around 11,000 businesses.
The research from the BDRC Continental survey identifies a lack of confidence in their chances of success as one of the key reasons for this.
Currently Northern Ireland accounts for just 5% of all successful business finance applications – and in response to the findings, the UK's five biggest banks have launched a campaign to support the findings.
The move by the BBA aims to highlight the greater ease in getting finance than current perceptions.
BBA chief executive Anthony Browne said the view being challenged by the 12-month campaign is the "perception gap" between firms' fears they'll be turned down by their bank and the reality.
Mr Browne said: "We want to let businesses in Northern Ireland know that they are a lot more likely to get finance than they think. Small businesses are the engine room of the economy and the research we publish today shows how much stronger our recovery could be if more SMEs approached their banks for finance."
The new campaign will be engaging with businesses with a turnover of less than £25m and will feature online advertising and social media outreach, providing top tips for finance success.
The campaign will also raise awareness of the independent Appeals Process in place since 2011 to allow businesses to challenge banks' finance decisions.
If taken up more readily, loans could assist 2,000 small and medium sized firms to expand in the UK; help result in 1,800 new orders for equipment; allow 4,300 companies to boost their spending power; and help 600 of them develop new products or services to customers.
The banks behind the BBA scheme include Barclays, HSBC, Natwest, RBS, Lloyds and Santander.
A recent survey by the Northern Ireland Chamber of Commerce showed more businesses were satisfied with their banking relationship than dissatisfied – 49% are positive compared to 19%.
Number of Northern Ireland SMEs losing out to the 'perception gap'