Michael Noonan (Limerick City, Fine Gael) | Oireachtas source

The only objective evidence we have, rather than simply relying on bank data, is from the RED-C polling company. It surveys SMEs to ascertain the availability of credit and the trend is towards improvement. The last survey showed that just over 80% of SME applications for loans resulted in the loans being granted. That still means one in five is being refused, which is high, but the trend is improving.

There are different demands in different companies. Many companies just need working capital on a 12-month rollover basis. Others need term loans of two years, three years or even up to five years, which they also get from the banks. However, increasingly, small companies want to expand and may need money for ten years. What we are putting in place now with the new strategic investment bank will fill that particular need.

We are fully aware of the problem which has not gone away, but the situation has improved significantly. One of the root causes of the problem was that many SMEs in boom times departed from their core business and got involved in property plays and it was the property play that dragged the core business down. The banks are now trying to restructure companies so that they are parking the property aspect and allowing them to have the capital necessary to continue with the core business which was viable all the way through but was being dragged down.

I agree with the Deputy's general point of view. We are working on it. We have not succeeded yet, but we have improved it significantly.

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