Majority of Irish SMEs report profit and upturn in past year

A sizeable majority of Irish small and medium-sized enterprises (SMEs) have reported profits over the past year and believe trading conditions are favourable and improving, a new survey to be published on Monday has found.

The latest SME credit demand survey being published by the Department of Finance also shows positive attitudes towards borrowing and the willingness of banks to lend.

The survey, conducted by Behaviour & Attitudes, questioned more than 1,500 companies and covered a six-month period between October 2016 and March 2017.

A substantial 84 per cent of respondents reported trading conditions had remained favourable for SMEs and 61 per cent said their enterprise had made a profit over the six-month period.

House prices now rising by €4,000 a month, says MyHome.ie

---

Majority of companies entering examinership since crash survived

---

Seen & Heard: State-backed funds using Section 110 to slash tax bill

---

Electric cars a game changer for motor-tax revenue

---

One in five of those surveyed said they had requested credit and, of those, almost nine in 10 said their request had been granted.

Of those that had not sought credit, almost all said the reason was they did not need it. Only a tiny fraction (1 per cent ) did not seek credit because they thought it was too expensive.

Responding to the survey, Minister for Finance Paschal Donohoe said: "The results show that demand for credit continues to remain low from micro and small-sized enterprises. However, encouragingly, the number of businesses reporting a profit has increased for the fourth year in a row, and a higher proportion of SMEs than ever are pursuing a growth strategy.

“The mindset of SMEs remains focused on stabilisation and moderate growth of the business.”

On a slightly less optimistic note, just under half of respondents believed banks were lending to SMEs.

The main reasons for seeking loans were for working-capital and cash-flow requirements (31 per cent) followed by expansion plans (23 per cent) and the purchase, replacement or leasing of new vehicles or equipment (21 per cent).

This survey had its roots in the agreement by the two main banks – Bank of Ireland and AIB – in July 2011 to fund an independent review of credit demand by SMEs, which the department commissioned following a public tender competition.