There is a significant increase in the numbers of small and medium enterprises that believe banks are lending to business, according to the latest SME Credit Demand Surveys published by the Department of Finance.

More than 60% of SMEs say banks are lending, up from 45% in March 2017.

Positive business sentiment has increased for companies of all sizes with 55% of SMEs expecting the business climate to improve in the next six months - up from 49% in March 2017.

The survey series is currently being conducted by Fitzpatrick Associates in conjunction with Behaviour and Attitudes, on behalf of the Department of Finance.  It is the most comprehensive survey of SME Credit Demand in Ireland, covering over 1,500 respondents through in-depth discussions.  

The survey ensures that it captures a full picture of the SME landscape in Ireland, with micro enterprises, small-sized enterprises and medium-sized enterprises accurately represented as per the percentage make-up of SMEs in Ireland.

The demand for bank credit increased by 6 points year-on-year to 26%, and is up three points from September 2017. This represents the first consecutive increase in demand since the series began.  Demand is now on a par with March 2016. Demand had been consistently falling from a high of 40% in March 2013 to its lowest level of 20% in March 2017.

For the fifth year in a row, there was an increase in the reported number of companies making a profit, with a growth from 40% in March 2013 to 64% in March 2018.  

SME finances also continue to improve with 87% of SMEs reporting stable or increased turnover.

45% of all businesses surveyed report increased turnover in the past six months, with 14% reporting a decrease. Of those reporting increased turnover, half report an increase of 10% or more.

88% of applications for credit were approved, which is an increase from 85% on the previous survey wave in Sept 2017.

57% of SMEs believe that Brexit will have a negative effect on their business while 11% believe that it will have a positive impact (up from 9% in March 2017).  32% of SMEs believe it will have no impact on their business.

Of those that did not access credit, 89% cited lack of credit requirements as their reason.

The average cost of credit on outstanding loans is 5.06%, which represents a slight decrease and is a continuation of a downwards trend.

On the publication of the survey Minister for Finance, Paschal Donohoe welcomed the results of the latest SME Credit Demand Survey. "It is encouraging that there has been a noticeable increase in the number of respondents that feel that banks are increasing lending.  The survey has also captured that, notwithstanding the uncertainty of Brexit, Irish SMEs are more confident in the continued improvement of the business climate over the next 6 months’. 

Minister Donohoe said the survey is an invaluable resource that allows us to develop, refine and implement policy measures to ensure our indigenous businesses are adequately and well supported.