SME fightback hobbled by financing shortfall

IN IRELAND, over two thirds of private sector employment is accounted for by SMEs, yet this group has been particularly challenged since the onset of recession.

Many entrepreneurs loaded themselves down with debt as they chased the property dream, or followed the mistaken prescriptions of their professional advisers. The self-employed have looked on as their business drained away and their banks shut up the shutters, retreating into the virtual world.

Estimates suggest that as much as €25bn in loans to the sector could be categorised as troubled; that is, one half of the total funds lent to SMEs. Many businesses are clinging on by their fingernails. Bank lenders, when not pressing hard for repayment, are a bundle of nerves, fearful of adding to their bad debt burden.