Minister Bruton officially opens Bibby Financial Services new Irish offices

Bibby launch new Bad Debt Protection product to support Irish SMEs in conjuction with this event...

Irish SMEs, who make-up 99.6% of Ireland’s total employers and employ 70% of the Irish work force can contribute most to reducing unemployment, but this cannot happen while their access to credit remains constrained, according to Simon Davies, CEO of Bibby Financial Services Europe.

Speaking in advance of the official opening of the company’s new offices in Sandyford this evening, to be attended by Minister for Jobs, Enterprise and Innovation, Richard Bruton, T.D, Mr Davies said that while the Irish economy shows promising signs of recovery, Irish SMEs remain disproportionately impacted by the on-going credit squeeze. ‘We’ve experienced a similar situation across the UK and Europe where small and medium companies are suffering from a lack of access to credit. This is having a knock on effect across all sectors of the economy, and directly impacting job creation’, he said.

According to Mr Davies, ‘Irish and European SMEs are too dependent on traditional banks for funding. This model is outdated. There are no signs that these banks have the ability to meet SMEs credit demands for the foreseeable future. European economies need to move to the American model, where bank finance to the real economy accounts for only 20% of total funding. Alternative sources, including invoice financing, now accounts for the remaining 80% of funding to businesses’.

BFSI will this evening launch a new Bad Debt Protection product which aims to protect SMEs from the risk of suffering a bad debt and to insulate businesses from the damaging effects which unpaid or late payments can have. Research published by Grant Thornton  in 2013 indicated that almost half (48%) of Irish exporters suffered bad debts last year. 6% of all companies recorded bad debts in excess of 10% of annual turnover.

Late payments was also identified as being a major problem for Irish businesses, with 37% reported as deliberately being paid late to assist cash flow and 23% being due to financial difficulties. 

Announcing detail of the new funding product for Irish SMEs, Mr Davies said that the ‘new facility can provide up to 90% protection for all debts in the event that a customer company becomes insolvent or there is protracted default or non-payment of debt.Protection is available for debts owed to SMEs in Ireland and overseas and can also be backdated on debt up to 60 days old."

Speaking in advance of the launch, Minister Bruton commented: ‘My Department and the wider Government is committed to ensuring that SMEs have the access to credit and other funding sources to ensure that expansion opportunities, including export markets, are fully accessible to Irish businesses. Invoice financing and bad debt protection have a part to play in the overall mix of financial supports for SMEs.’

Ronan Horgan, Managing Director, BFSI noted: ‘SME protection against bad debts is critical to business growth. Irish businesses lose thousands each year due to customer insolvency or debt default. Such non-payment can significantly affect a company’s performance and at worst, cause that business itself to go under.  Today’s announcement will give greater confidence to SMEs to expand their business, not just in Ireland but in export markets too’.

BFSI is part of the Bibby Group, a global leader in invoice financing with 47 offices across Europe, the US, Middle East and Asia. ‘Bad debt protection for SMEs is commonplace across the 15 countries in which we operate. In Ireland we have seen a huge increase in demand for such services as SMEs seek to insulate their businesses against bad debts,’ concluded Mr Davies. 

Article Published: 08/05/2014