BANKS HAVE US TIED IN KNOTS; Flush with Bailout Billions, the Banks Say They Are Lending to Keep Business Moving. Not So, Say Small Firms Starved of Cash by 'Bureaucratic Nonsense'; Lenihan 'Fooled' by Experienced Banks
Byline: Yvonne Tarleton
BANKS are making it virtually impossible for many small firms to get loans by tying them up in 'bureaucratic nonsense', it was claimed last night.
Business leaders hit out as it emerged that some company bosses are being asked to hand over their own house deeds amounting to four times the value of the loan being requested.
They also claimed that Finance Minister Brian Lenihan has allowed himself to be bamboozled by 'very experienced' bank chiefs who are more cluedin about financial matters than he is.
The development comes just weeks after it emerged that almost half of all small and mediumsized Irish companies have been refused the loans they need to keep them in business.
This is despite the fact that E7billion of taxpayers' money was used to recapitalise Allied Irish Bank and the Bank of Ireland amid a pledge by ministers that they would help cash-starved businesses.
In fact, the Irish Small and Medium Enterprises Association is insisting that banks are making it very difficult for those who are approved for loans to meet the conditions. Now ISME has called on the Government to force banks to change their policy in tomorrow's Budget.
Mark Fielding, ISME's chief executive officer, said: 'We are still getting many complaints from our members saying they have difficulty getting credit.
Almost half of applicants are not getting access to credit and many of those who are successful are not able to meet the conditions the banks are setting out, they are doing everything they can to make it awkward. There is a definite change in policy since last year.
'They are looking for personal guarantees and excess collateral, the deeds of property three or four times the value of the loan and this is creating untold problems for small and medium businesses.
'They are also looking for a full list of debtors and creditors, all sorts of bureaucratic nonsense, the type of information that companies would not have during the year because their accounts are done on an annual basis.
'It is very unfair to ask the directors to provide personal guarantees for a loan for a limited company, but in many cases it is the last resort and people have to do it just to survive. …