Monday, May 23 11:26:16
Firms that applied for loan finance had a success rate of 90pc in 2007 but this fell to just 50pc in 2010, according to new figures from the CSO today.
The percentage of enterprises applying for bank loan finance over the period 2007 to 2010 decreased from 37pc to 31pc.
Enterprises applying to banks for loan finance were successful in 95pc of cases in 2007, while in 2010 the success rate dropped to 55pc.
In 2007, 37pc of all enterprises applied for loan finance. In 2010 the corresponding figure had fallen to 31pc.
Most sectors saw a drop in the number of loan finance applications between 2007 and 2010.
The biggest reduction was ? unsurprisingly ? seen in the Construction sector, with 47pc of enterprises applying for loan finance in 2007 compared with 36pc in 2010.
The share of enterprises applying for equity finance rose from 3pc in 2007 to 4pc in 2010, while for finance other than loan and equity finance, the share rose marginally from 20pc to 21pc.
When asked about their outlook for the period 2010 to 2013, 60pc of enterprises indicated that they would need financing to maintain their business.
The percentage of enterprises applying for loan finance over the period 2007 to 2010 decreased from 37pc to 31pc.
The biggest drop was seen in the smaller business sector ? those employing 10-49 persons, with 36pc of enterprises in this group applying for loan finance in 2007 and 29pc in 2010.
For enterprises with 50 and over persons engaged, the corresponding figures were 42pc in 2007 and 39pc in 2010.
Figures show that the owner/director was the guarantor in more than 90pc of cases where a guarantee was required by the lender in both 2007 and 2010.
The main reasons given by banks for wholly or partially refusing loans in 2007 were lack of capital and insufficient or risky potential.
However, in 2010 the most common reason identified by the banks who lend the money to these businesses in the first place was that enterprises had too much debt.
The percentage of applications that were not given a reason by the banks for complete or partial loan refusal was 19pc in 2010. The corresponding figure for 2007 was 9pc.
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Article source: http://www.businessworld.ie/livenews.htm?a=2784522;s=rollingnews.htm
Source: http://loans.ismyblogs.name/approval-for-business-finance-down-40pc/
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