ACCESSING CREDIT and adapting to changing bank policies are two of the biggest challenges facing firms in Northern Ireland daily, according to new research.
The Federation of Small Businesses, which represents 8,000 small companies in the North, says latest feedback from its members suggests that Northern Ireland’s uncertain economic environment is putting additional pressure on banks and small business owners.
Wilfred Mitchell from the federation said many companies in the North want other options than simply having to turn to banks to finance their business.
Mr Mitchell believes the UK government could play a more proactive role in ensuring small businesses survive the recession by providing an alternative source of funding or support to rival the traditional banking structure.
According to the federation, Northern Ireland has the highest percentage of small and micro-businesses in the UK which accounts for 98 per cent of the private sector and around half a million employees.
Mr Mitchell believes the small business sector is central to the North’s “future prosperity” but he says certain conditions must be fostered in order to give them “every opportunity to survive”.
“Small firms don’t have a huge amount of scope in accessing finance, unlike larger businesses.
“More competition in the sector will mean greater competitiveness in terms of the cost and the services provided and give access to the type of finance which large businesses are able to tap into,” Mr Mitchell added.
The Institute of Directors claims it is not just smaller organisations in the North that are struggling to secure the necessary finance to keep their businesses viable.
Joanne Stuart from the institute says larger businesses are also facing particular challenges in Northern Ireland when it comes to the difficulties they are confronting in relation to financing and credit.
The concerns over the strained relationship between banks and businesses in the North comes as one financial institution launches what it describes as a new initiative to “inject fresh life” into the economy.
Ulster Bank intends to provide “free banking and new services” to viable start-up and early-stage companies in Northern Ireland and the Republic.
The bank said new and young businesses will have transaction fees waived for two years when they sign up to become customers of the bank, as part of the initiative.
The bank is also pledging that the firms can take advantage of a loan worth up to £25,000 – or €30,000 in the Republic – for business development purposes without having to back it with assets.
The bank also plans to establish a new team to provide expert service to start-up and recently established firms.
Henry Elvin, head of business banking at Ulster Bank said: “Improving and growing our economy requires a continuous emergence of new enterprises.
“We want to play a key role in helping to create a new generation of vibrant, successful local businesses and to help them develop to their full potential.”
