Almost 30% of SMEs in Ireland had to write off bad debts in the past twelve months, new data shows.
The survey by Bibby Financial Services shows that the average figure written off by Irish SMEs was €21,076, up from €18,543 in the previous year.
This average figure jumps for the wholesale sector, which recorded the highest average amount written off at €47,000.
The research also shows that interest rates and the cost of borrowing are the top concerns for 27% of businesses, while 19% are worried about access to finance - with this figure rising to 24% for those operating in the construction sector.
Meanwhile, supply chain uncertainty is restricting cashflow, with 28% of those surveyed stating that customers have entered administration, while 34% said some of their suppliers have entered administration.
Overall, 21% of companies said they don't have the cashflow they need to grow, while a further 11% said they don't have sufficient cashflow to operate effectively on a day-to-day basis.
Almost half of Irish SMEs also said they are more likely to use external finance now, compared to before the Covid-19 pandemic.
This figure rises to 54% for those in the wholesale sector and 63% for those in the transport and haulage sectors.
In addition, the figure also rises to 55% for those importing goods and 63% for those exporting.
"Alternative finance options, such as invoice finance, are now playing a more important role in a sustainable funding landscape," said Mark O'Rourke, Managing Director at Bibby Financial Services.
"As alternative funding solutions provide certainty of payment and more sustainable sources of liquidity, they are often far more suited to the needs of an SME than traditional lending options.
"They also don’t involve borrowing any money - which is often a key factor for SME’s as they simply don’t want to take on term debt or cash flow loans that will result in monthly repayments for years to come," he added.
