Banks cut lending to Northern Irish SMEs by over ten percent in a year


There has been an 11 per cent fall in the value of new loans granted to Northern Irish SMEs, as ongoing political uncertainty may be leading to heightened caution amongst traditional lenders, says Ortus Secured Finance.

The value of loans to SMEs based in Northern Ireland fell to £1.5bn in 2016/17 – down from £1.7bn in the previous year.

The figures compare to a 1.5 per cent decrease in the value of new loans received by Welsh SMEs over the same period. Scottish SMEs, meanwhile, saw a decrease of 9.5 per cent as the Scottish economy continues to suffer from the slump in North Sea oil.

Ortus Secured Finance says that the data demonstrates the severe and growing funding gap faced by SMEs in Northern Ireland.

The power sharing agreement between Northern Ireland’s leading parties first broke down in January 2017.

Northern Irish SMEs in the manufacturing sector have been amongst those to see the most dramatic falls in new loans granted. The value of manufacturing loans to Northern Ireland SMEs fell by 32 per cent to £351m in the six months between October 2016 and March 2017 – down from £514m in the previous six month period.

Ortus Secured Finance says the findings highlight the important role to be played by the alternative finance sector in supporting Northern Ireland-based SMEs.

Jon Salisbury, Managing Director of Ortus Secured Finance, says: “SMEs in Northern Ireland are likely victims of an excessively cautious approach from traditional lenders.”

“Whilst traditional lenders may be wary of investing in Northern Ireland, we have made a strong commitment to the market with, so far, extremely positive results.”

“The businesses we have funded in Northern Ireland have all been built on strong fundamentals and are just as credit-worthy as any similar business elsewhere in the UK.”

“There are ample opportunities in Northern Ireland for lenders like ourselves to help SMEs looking for the funding they need to help them grow.”