Lack of credit 'hampers recovery'
Lack of bank credit could hamper economic recovery in Northern Ireland, chartered accountants have claimed.
Businesses have put viable expansion plans on hold due to difficulties accessing funds, financial experts said. The main reasons were banks' unwillingness to lend, a lack of alternatives, difficulties providing sufficient security against loans and the property debt which companies were servicing.
However, three-quarters of accountants surveyed said the country was emerging from the longest decline in living memory.
Darren McDowell, chairman of Chartered Accountants Ulster Society, said: "Local businesses are calling for greater access to finance to encourage growth and our members feel that viable expansion plans are being put on hold due to businesses not being able to access funding.
"There is a need for banks, alternative funders, business advisers such as chartered accountants and the business community in general to work together to address the funding challenge to ensure that we nurture a real recovery."
Almost three-quarters of more than 250 accountants surveyed said Northern Ireland was coming out of recession, a quarter felt it remained in the doldrums and only 3% believed the slump was over.
That represents marked improvement from last year's survey when only 17% of the organisation's members said Northern Ireland was emerging from recession.
This year's data showed an improved outlook for businesses, with 38% of those asked viewing the prospects as good and 17% as poor.
Mr McDowell added: "The survey suggests that the focus when looking for new finance is still on the traditional, bank-led sources.
"Businesses are looking for asset finance rather than equity finance in the first instance as they are concerned about giving away equity in their business, but we expect that more and more people will be considering these alternative forms of finance going forward."
Kevin Kingston, deputy chief executive officer at Danske Bank, said o ne of the key drivers of economic growth in Northern Ireland this year will be confidence.
"We therefore welcome the results of this survey, which reflect what we are seeing at Danske Bank - more confidence in the business marketplace and increased demand for finance from businesses looking to invest and grow," he added.