The Small Firms Association is urging all small business customers of KBC and Ulster Bank to prioritise switching banking providers and ensure that all new bank accounts are set up correctly, so they can continue to make and receive payments.
According to the Central Bank of Ireland, of the 292,996 accounts in Ulster Bank and KBC Bank closed in the eight months to end-August, 283,253, or 97 per cent, were accounts held by private households. SME customers (including sole traders) accounted for 3 per cent.
Small Firms Association Chair, Graham Byrne outlines: “I understand the pressure business owners are currently facing from the energy affordability crisis and rising business costs. However, now is the time to ensure that their banking services are not disrupted. This includes choosing a new provider, moving their balances and transactions, and closing their current and deposit accounts. As Revenue’s Pay and File Deadline approaches businesses must also ensure their new account details are up to date with Revenue by using the Revenue Online Service at revenue.ie
“SFA welcomes Ulster Bank’s decision to extend the deadline until November 4 for those customers whose accounts were due to become non-operational on October 8 but urges small businesses to act without delay”.
According to the recent SFA Small Business in Ireland: Cost of Doing Business report:
- 22% of all businesses with fewer than 50 employees have borrowed in the last 12 months
- Reasons for borrowing included to grow or expand their business, for new machinery and equipment and to increase working capital
- Of those businesses that didn’t borrow, over 50% said it was because they didn’t need additional funding. However, 12% of businesses didn’t believe the loan would be approved
- The average debt for micro (<10 employees) and small businesses (10-50 employees) is €80,903, lowest for micro firms at €56,774 and highest for small businesses at €107,149
- Half (52%) of all businesses with fewer than 50 employees are currently managing debt. Bank loans (63%), other financing loans (28%), and tax debt (22%) are the three biggest forms of debt for businesses
Mr. Byrne continued: “These results show the importance and need for borrowing by Ireland’s small business community. In addition, members report feeling fatigued from the arduous credit process and previous rejections, which stops them from applying for new borrowing or reduces their requests.
“To secure productivity growth within indigenous businesses, they must have access to appropriate and affordable finance suitable to their needs. Therefore, we urge the Government to focus on attracting new bank and non-banking activity into Ireland to fill the gap that Ulster Bank and KBC leave behind, but to also work with agencies, the banking sector and alternative finance providers to fund supports where there are market failures.”