Poor access to finance forcing firms to postpone plans: poll
Viable investment plans are being put on hold because businesses cannot access finance.
That's the message from a poll by the Ulster Society of Chartered Accountants Ireland in which 78% of respondents felt that investment plans were being hampered by the lack of access to finance.
Carried out by economist Maureen O'Reilly, the survey polled 265 members ahead of the organisation's Funding for Recovery 2014 conference in Belfast, sponsored by Danske Bank, which takes place today and is being addressed by Spencer Dale, chief economist at the Bank of England. InterTradeIreland is also supporting the conference, which examines the funding landscape in Northern Ireland.
Despite the survey's results, Ms O'Reilly said other polls indicated the lack of funding may be a perception rather than reality. She said there was an over-reliance on traditional funding sources such as overdrafts and loans, with 64% believing that Northern Ireland businesses were too dependent on traditional debt funding.
Two-thirds of those polled felt the demand for business finance was increasing and the majority, at 76%, believed the supply of finance was unchanged or decreasing since last year.
The top reasons given for difficulty in accessing finance were a lower appetite to lend from banks, a lack of alternative funding options outside of banks, businesses being less able to provide sufficient security and the property debt businesses are servicing.
Overall, the poll shows an improving outlook for Northern Ireland businesses, with 38% viewing prospects as good, up from 6% last year and 17% viewing prospects as poor, down from 56% last year.
Some 73% of respondents said Northern Ireland was coming out of recession, 24% felt it was still in recession and only 3% felt the recession was over. This time last year, only 17% of the organisation's members said Northern Ireland was coming out of recession.
Meanwhile, 54% felt that the total cost of borrowing would rise in the coming year.
The Funding for Recovery conference takes place at the Holiday Inn in Belfast and, as well as Mr Dale, will be addressed by Angela McGowan and Kevin Kingston of Danske Bank, Helen Kirkpatrick of Invest NI and John Trethowan from the Access to Finance Implementation Panel.
* 73% feel that Northern Ireland is coming out of recession
* 38% feel that NI's economic prospects in the year ahead are good; 17% feel that prospects are poor
* 66% feel that the need for business finance has increased since last year
* 78% feel that viable investment plans are being put on hold due to a perceived lack of finance
* 64% feel that NI businesses have an over-reliance on 'traditional' funding sources (overdraft/ loan)
* 54% feel that the total cost of borrowing (cost of funds plus base rate) will rise in the coming year. Only 1% feel it will reduce