County businesses 'frustrated with bank refusals"

Small and medium sized enterprises in North Meath are being forced to let people go because of the serious difficulties they are experiencing due to the banks refusal to approve and renew account facilities, according to Cllr Sean Drew 'We are all aware of the term credit crunch as it has become one of the new buzzwords over recent months. However, the impact of the credit crunch on the viability of small and medium enterprises cannot be overstated,' he said. 'I am acutely aware of the cashflow problems being experienced by small business in Kells and North Meath due to the failure of the banks to release funds through the renewal of overdrafts and loans. I am dealing on a daily basis with retailers, manufacturers, shopkeepers, hauliers, professionals and all sectors of local business who are unable to retain employees directly due to the banks actions. 'This is resulting in the proprietors of these businesses having to take the regrettable decision to lay off loyal, dedicated and hard-working employees and, in many cases, the ongoing viability of otherwise profitable businesses are being put at serious risk.' He said that small business owners felt that the banks were reneging on their responsibility with the result that the business is taking on the role of the banks in funding debtors and customers. 'In many cases the burden of this role forces the business to close. Many employers have highlighted to me their frustration at the banks refusal to release funds and the complete change in the banks attitude from one extreme (the apparent unregulated granting of finance) to the other (refusal and rejection of legitimate business financing).' Cllr Drew said these self-imposed bank financing restrictions have had the knock-on effect of a loss in local consumer confidence and spending. 'As a result, we are all caught in a negative downward economic spiral,' he said. Cllr Drew has welcomed the announcement this week that the European Investment Bank (EIB) is making €300 million available for small and medium enterprises (SMEs) in Ireland. The EIB has said that three banks, Bank of Ireland, AIB and Ulster Bank will act as intermediaries in passing on the funds through loans to SMEs. Cllr Drew is seeking the prompt release of these funds by the banks to qualifying businesses. In addition, he has also urged local banks to ensure that the criteria for the approval and renewal of funds to viable SMEs is relaxed, that decisions on refinancing are not delayed and are made on a case-by-case basis in an individual, positive manner. He concluded that local business and employers will only be able to get through these difficult economic times and be suitably placed for the upturn if banks give the necessary financial supports required now.