New lending for SMEs costlier than existing credit

New lending for SMEs costlier than existing credit

By Eamon Quinn

The overall volume of loans taken out by Irish SMEs continues to fall into its seventh year as interest rates they are charged on their new loans remain the highest in Europexx and are more expensive than the charges faced on existing loans.

Central Bank figures show that outstanding credit fell to €26.4bn even though the increase in new lending to SMEs has unsurprisingly swung positive, growing by €3.7bn in the final quarter of 2017 from a year earlier.

The stock of SME credit includes €10.4bn in property and construction loans and €15.8bn in what the Central Bank calls “core lending”.

Total lending to wholesale, retail and repairs firms fell in the year, in particular, as they paid back more than they borrowed.

Opposition politicians are increasingly focusing on the fate of Irish-owned SMEs which are among the e The Central Bank figures show little improvement.

It said that “the weighted average” cost of new lending for SMEs, which were not involved in financial services, was at 4.1% in the final quarter. That’s down 16 basis points, or 0.16%, from a year ago.

SMEs involved in health and social work saw very decreases in the cost of their new loans, by 276 basis points, or 2.76%.

“Rates on new lending remain higher that the rate applied to the outstanding stock of non-financial SME loans, which was 3.26% at end quarter four 2017,” the bank said.

More in this Section

Johnson insists EU free trade agreement can be struck amid no-deal Brexit fearsJohnson insists EU free trade agreement can be struck amid no-deal Brexit fears

IDA Ireland: Era of optimism with growth evident in all sectorsIDA Ireland: Era of optimism with growth evident in all sectors

Renault warning of slowing sales haunts rest of European car industryRenault warning of slowing sales haunts rest of European car industry

Flying Tiger retail stores back in the blackFlying Tiger retail stores back in the black


Lifestyle

These are the nail hues to choose this season, says Katie Wright.Perfectly polished: 5 autumn/winter nail trends you’ll actually want to wear

This early 19th-century table is one of a number of Irish lots at Sotheby’s Style, Furniture and Ceramics sale in New York on Thursday (October 24).Irish lots poised to add bite to Big Apple sale

Something for all at Hegarty’s auction in Bandon, says Des O’SullivanSomething for all at Hegarty’s auction in Bandon

Des O’Sullivan gives a preview of the Irish selection on offer at two sales in DublinPreview of the Irish selection on offer at two sales in Dublin

More From The Irish Examiner