AIB pushes approval rate for SME lending to over 90%

AIB sanctioned a further 3,000 or so loans to small businesses last month, pushing its approval rate for lending to the sector to more than 90%.

Brendan O’Connor — AIB’s head of business banking — told delegates at yesterday’s Small Firms’ Association (SFA) annual luncheon in Dublin, that reports of the main banks not being open for business is a fallacy.

“Please do not be put off by what you read, or hear, in the media or by what someone else tells you. Do not be put off by the myth — and it is a myth — that if, for some reason, you do apply for a loan and are refused that, somehow, that puts a black mark against your name for all time on the bank’s blotter,” he told delegates.

Mr O’Connor yesterday said that between January and the end of September, AIB processed 25,113 SME credit applications, with 23,040 being approved.

“I genuinely believe we make good balanced decisions when we are given the chance to do so. The numbers bear this out. Of the more than 80,000 credit decisions we have made since the Credit Review Office was established, only a little over 100 have been appealed to that office.”

In his address, Ian Martin SFA chairman said while progress has been made, “increasing credit availability from banks to SMEs remains critical to small business survival and growth”.

He said business costs cannot be increased any further, the Government should simplify measures to support job creation, and the issue of late payments needs to be tackled.

He noted the results of a recent SFA survey which showed that as much as 40% of the association’s members were unaware of the prompt payments legislation; only 9% had used it, and just 4% had been successful in getting paid after using it.

Mr Martin said that the matter needs to be urgently addressed.

“The good news is that there are still almost 200,000 small firms in Ireland, with on average 12,000 new businesses setting up each year.

“Collectively, we employ 655,000 people — more than half the private sector workforce. And the message is that we can do more, be more successful and employ more people; if the Government allows us to get on with the job by creating the right conditions for us to trade,” he said.