Irish SMEs ‘discouraged’ from seeking bank loans

The relatively high interest rates that Irish small companies are being charged for their loans could affect perceptions of success in getting bank loans in the first place, according to research from TCD Business School.

“Discouraged borrowers, firms that would have good prospects but who are not borrowing for a fear of rejection, represent a not insignificant problem in the EU,” said professor of finance Brian Lucey at TCD.

He said the many surveys showing that Irish SMEs pay far more than the average for their business loans than anywhere in the eurozone could also be discouraging companies.