The length of time SMEs are waiting for decisions on loans from banks has risen from seven to eight and a half weeks, according to a new survey.
The Irish Small and Medium Enterprises Association’s (ISME) latest Quarterly Bank Watch Survey indicates that on average businesses are waiting over four and a half weeks for an initial decision to be made on loan applications, while the wait time for drawdowns has increased to four weeks.
Commenting on the results of its study, ISME CEO Mark Fielding said: "We are disappointed to see the bailed-out banks slip back into their old ways of the 'long no'.
“The substantial increase in the length of time it is taking to get approval on a loan demonstrates a complacent and lazy attitude from bankers.
"As a result of this deterioration in bank service an unacceptable 26% of SMEs were awaiting decision at the survey date.
“This figure has risen from 21% in the previous quarter and access to credit is patchy and the refusal rate increasing slightly to 36%, confirming that Irish banks are not functioning properly," he added.
ISME’s survey also found 38% of SME respondents required additional or new bank facilities in the last three months, down from 42% in the previous quarter.
More than a third (36%) of companies that applied for funding in the last three months were refused credit by their banks, a 1% increase on the previous quarter.
Mr Fielding said: "Schemes such as Microfinancing, SBCI and the Government Guarantee Scheme offer an important alternative source of finance to SME's, it is imperative these schemes are properly advised to SMEs by our banks".
ISME is calling on the Government to ensure the Strategic Banking Corporation of Ireland funds are promoted by banks and used appropriately for SMEs.