SME debts ‘will not trigger crisis’

The overall indebtedness among Irish SMEs is not at a level that will trigger a wave of company foreclosures and presage another economic crisis, according to research conducted by the Central Bank.

A study undertaken by Central Bank economist Fergal McCann, found that one-third of all Irish SMEs have no debt at all and only 16% of SMEs have debts greater than one-third of their turnover.

Debt repayments that exceed one third of turnover are seen as unsustainable, noted Mr McCann. Only 7% of all SMEs have debts greater than turnover.