ISME 2014 Survey – Baloney from Banks and Govt on lending to SMEs

ISME Survey. PDF.

  • 52% of companies who applied for funding in the last three months were refused credit by their banks, a slight improvement on the 54% refusal rate, seen in the previous quarter.
  • 32% of respondents had requested additional or new bank facilities in the last 3 months, a reduction from 39% in the previous quarter and lowest demand since June 2011.
  • On average, the decision time has increased to just over 4 weeks and the wait to drawdown has increased from 3 to 5 weeks.
  • 11% of respondents who required bank finance did not apply for various reasons, a decrease from 17% in the previous quarter.
  • Of those 42% were actually discouraged by bank from making application and another 33% were afraid of a reduction in existing facilities.
  • 50% of respondents are customers of their bank for over 20 years, while 85% are over 5 years.
  • Of the 48% approved for funding, only 43% have drawn down the finance either fully or in part.
  • 46% of requests were for term loans, with 34% for overdrafts, or alterations to existing facilities, while invoice discounting/factoring accounted for 5% of requests, with 20% requesting leasing.
  • 60% of respondents had increases in bank charges imposed, while 20% have suffered increased interest.
  • Reductions in overdrafts were demanded of 23% of SMEs, down from 35% in the previous quarter.
  • 71% state that the Government is having either a negative or no impact on SME lending.
  • 74% of owner/managers are in favour of an alternative Strategic Investment Bank.
  • Only 32% of respondents are aware of the code of conduct for business lending to SMEs.

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