Is using your cash reserves to grow your business the best strategy? Most likely not.
The Irish economy is performing well, and Irish SMEs are in confident mood. However, instead of using smart borrowing to grow their businesses, they are dipping into their cash reserves to expand, which may not be the best strategy.
“It is important that business owners remember to engage in smart borrowing to grow their business while maintaining sufficient cash reserves.”
According to new research into Irish SMEs, conducted by Red C, 78% of Irish SMEs are confident in their ability to borrow – if they need more capital over the next twelve months.
However, just one quarter (23%) say they will borrow in the coming year, as they look to grow.
“The research sheds light on current borrowing habits and the expectations of SMEs across the country,” says Michael Lauhoff, director of Business Banking, Bank of Ireland. “Interestingly, 60% of SMEs report using personal funds to invest in growth over the past three years. It is important that business owners remember to engage in smart borrowing to grow their business while maintaining sufficient cash reserves.”
As SMEs across the country look to grow; working capital, new machinery and equipment are the top reasons for borrowing. 81% of SMEs looking to raise finance, say they would consider Irish banks over the Credit Union or private investors.
70% of the 450 firms polled say they would like an easier loan application process from the banks.
If you would like to easily apply for finance and get a result within 48-hours, go here.