Ireland's SMEs need to be prepared for inevitable increases in the costs of credit and borrowing, CPA Ireland has warned.
The accountancy body, whose members advise over 100,000 SMEs has said that government and businesses need to be vigilant to the challenges this will create and to take pre-emptive action to support Ireland’s SMEs.
Áine Collins, President of CPA Ireland, was speaking at CPA Ireland’s Cork Business Breakfast. The event, which was attended by over 80 business leaders, also heard from Paul O’Connell, Managing Partner of Quintas, Eoin McGettigan, CEO of the Port of Cork, Patrick Doyle, South West Regional Manager, IDA in a panel discussion chaired by Alan Healy of the Irish Examiner.
Ms Collins said that "The key challenges faced by SMEs are well articulated. They include increases in the cost of living and energy costs, uncertainties in the supply chain and difficulty recruiting staff. But the costs of accessing credit are too often not forming part of that conversation, but this will begin to impact and businesses need to be ready.
"According to the Department of Finance, the average cost of credit to SMEs in March of this year was 4.59%, a drop on the same period last year. But with ECB interest rates on the rise bank rates are following suit. The trend for businesses who need to access credit will be to see that cost significantly more in the quarters ahead."
"It will be incumbent on government to keep this under close review, and provide additional support if required," Collins urged. However, she added that SMEs should familiarise themselves with the supports that already exists. "There are many very beneficial loan and grant schemes that too often SME owners are unaware of. Any business that is struggling with the cost of credit should speak to their accountant and their Local Enterprise Office, to understand what supports are available.
She concluded, "CPAs are well equipped to guide SMEs through the current challenges and, in particular, on how to avail of the wide range of supports available. In what is an incredibly difficult time for SMEs and I would encourage every individual to support local businesses whenever possible."
