Northern Ireland SMEs less likely to ask banks for finance
Small and medium-sized businesses in Northern Ireland are less likely than their GB counterparts to approach banks for when it comes to borrowing money, according to a survey by the CBI and ACCA (Association of Chartered Certified Accountants).
Small Business Finance and the Recovery, a survey of 380 UK small and medium-sized firms (SMEs) and close on 100 accountancy practices, found that across the UK, bank overdrafts are the most popular form of finance, with 33% of respondents applying for them with a success rate of 73%.
The report also found that firms which have a presence both here and elsewhere, have significantly better financing conditions than those based solely in NI — due largely to their stronger cash positions.
The overall picture for the UK, reveals that firms are using a wide variety of financing options to gain finance, including credit from trading partners and late payment. They are also becoming increasingly important as creditors in their own right.
“Our data shows that NI firms are less likely to approach banks for overdrafts, loans or asset-based finance, even though their short-term financing needs were similar to those SMEs with no presence in NI,” said Brian McGuire of ACCA. “Demand for trade credit was therefore much higher among local firms when compared with SMEs throughout the rest of the UK.”