19. Ireland

SMEs accounted for 99.8% of all active enterprises in Ireland in 2021. They also accounted for 60.1% of total persons employed. Over half of all SMEs (55.9%) in the Irish business economy in 2020 were in the services sector.

Total SME bank debt has fallen from EUR 60 billion in 2010 to EUR 18.4 billion in 2022. Much of the decline can be attributed to SMEs deleveraging real estate-related debt since the great financial crisis (GFC).

Gross new lending to core SMEs (all non-financial and non-property related sectors) was EUR 3 billion in 2022. This reflected a year-on-year increase of EUR 102 million, marking the largest year-on-year increase in almost three years. Survey data from the SME Credit Demand Survey show that SMEs in Ireland are choosing to access bank credit less. For 79% of SMEs, having sufficient internal funds was the reason for not seeking credit.

Loan approval rates are broadly unchanged, with 90% of all applications for the period April – September 2022 (excluding “still pending”) either being fully or partially approved.

The interest rate on new SME loan drawdowns increased by 112 basis points over the quarter and now stands at 5.23%. Rates on new SME loans increased across all sectors over the quarter and over the year to Q4 2022.

The Government of Ireland has implemented a range of measures to assist SMEs, including primary producers, in dealing with the rising costs of energy, together with an increased inflationary environment, as a consequence of the conflict in Ukraine. In January 2023, the Ukraine Credit Guarantee Scheme worth EUR 1.2 billion was launched. This is aimed at providing low-cost working capital to SMEs, primary producers, and small mid-caps, and is available through a growing number of lenders which include banks and credit unions. In September, the EUR 500 million Growth and Sustainability Loan Scheme was launched, with the aim of providing longer-term lending. Loans under these schemes are currently available through two of the main banks, with other lenders expected to take part in the scheme. Prior to that, in July 2022, the SME Energy Efficiency Loan Scheme (EELS) was launched under the Climate Action Plan. Its purpose is to assist SMEs, including primary producers, to invest in the energy efficiency of their enterprises. This scheme will close for applications at the end of 2023. The Government introduced a Temporary Business Energy Support Scheme in 2023 to assist businesses with the increase in cost of their electricity bills. The Government also introduced the Business Users Support Scheme for Kerosene for businesses that were impacted by the increased cost of Kerosene during 2022.

Since commencement of its lending in March 2015, Ireland’s national promotional bank, the Strategic Banking Corporation of Ireland (SBCI) is working closely with the Department of Enterprise, Trade and Employment, the Department of Agriculture, Food and the Marine and the Department of Finance in the design of and implementation of a number of credit-related support and investment schemes such as;

  • Credit Guarantee Scheme;

  • Brexit Loan Scheme;

  • Brexit Impact Loan Scheme;

  • the COVID-19 Working Capital Scheme;

  • the COVID-19 Credit Guarantee Scheme;

  • the Future Growth Loan Scheme;

  • SME Energy Efficiency Loan Scheme

  • Ukraine Credit Guarantee Scheme;

  • Growth and Sustainability Loan Scheme.

Currently, the final three schemes listed above are open for loan applications.

The overriding objective of these schemes is to provide flexible funding for those firms that require it. More details on these schemes are provided in the full country profile.

Credit Review was established in 2010 to assist SMEs and farm borrowers who have been refused bank credit, including an SBCI product. It helps SMEs who have had an application for credit of up to EUR 3 million declined or reduced by the participating banks, and who feel that they have a viable business proposition. This is a strictly confidential process between the business, Credit Review, and the bank.

Despite large and unprecedented economic shocks in recent years, the domestic economy has proven to be remarkably resilient. This resilience is most clearly evident in the labour market, where the number in employment has expanded to record highs. The economy now appears to be entering a more balanced position, as some economic indicators have begun to soften in recent months. Headline inflation has eased considerably over the recent months, reflecting an easing in energy prices. Meanwhile, core inflation (excluding energy and unprocessed food) increased modestly to October 2023. This persistence in core inflation is indicative of broad based inflationary pressures and continue to weigh on consumer spending. The recent tightening of monetary policy will also be an important headwind for the domestic economy over the next year, with higher financing costs acting as a brake on both current and capital spending. Externally, growth is slowing in some of the country’s main trading partners which could have knock-on implications for Irish exports.

The recent easing in prices on wholesale energy markets suggests inflation has passed its peak and is now on a downward trajectory. However, underlying inflationary pressures, have been more persistent, reflective of post-pandemic mis-matches between demand and supply. Inflation forecasts for this year as a whole have been revised upwards to 5.3% (from 4.9% in spring). For next year, the annual inflation rate is projected at 2.9%. Modified Domestic Demand (MDD) is expected to grow by 2.2% this year. For next year, MDD growth of 2.2% is also assumed. Consistent with the outlook for MDD, employment growth of 3.4% and 1.3% is forecast for this year and next respectively.

There remains considerable uncertainty surrounding the outlook for the economy, with the balance of risk tilted to the downside. With the economy operating at or even beyond full employment, there is a possibility for a wage-price spiral to emerge due to capacity constraints in the labour market, leading to core inflation becoming more persistent. This would damage cost competitiveness and hamper the economy’s ability to compete in the global market. The impacts from monetary policy tightening and from the general global economy could prove to be more severe than assumed, while more persistent inflation in the Euro Area could trigger an even more aggressive policy response. It is possible that the ongoing wars in Ukraine, Gaza and other geopolitical tensions could escalate or broaden to other countries, increasing uncertainty and further weakening economic activity amongst main partners. Finally, a sector- or firm-specific shock in the highly concentrated multinational sector would be damaging for the domestic economy, while any deterioration in the global financial system could prompt further tightening of global credit conditions with implications for the real economy.

SMEs are a vital component of the Irish economy, as they comprise 99.8% of active enterprises and 60.6% of all persons employed. SMEs generated 41.9% of total turnover in the business economy and 34.5 % of gross value added in 2020, the latest year figures available for Ireland.

Annual gross new lending to core SMEs increased to EUR 3 billion by 2022 Q4.This reflected a year-on-year increase of EUR 102 million, marking the largest year-on-year increase in almost three years.

The Central Bank of Ireland reported that by the end of Q4 2022, the outstanding stock of Irish SME credit was EUR 18.4 billion, of which EUR 12.5 billion was core SME credit, which is defined as SMEs from non-financial and non-property related sectors. This continues the steady decline of the stock of core SME credit, which has reduced by 53% since 2010. This continued decline has occurred as demand for credit has been steadily decreasing, and the high levels of debt acquired by SMEs during the boom have consistently reduced.

The Irish Department of Finance conducts an SME Credit Demand Survey of over 1500 SMEs to identify what are the main challenges that they experience when accessing credit. The survey captures a full picture of the SME landscape in Ireland, with micro-enterprises, small-sized enterprises and medium-sized enterprises sampled proportionately. The results from these surveys provide important information on the financial issues and challenges facing Irish SMEs. This in turn enables Government to develop, refine and implement policy measures to support SMEs that are critical to Ireland’s economic performance and an important source of employment across the country.

The latest survey SME Credit Demand Survey, covering April to September 2022, shows that credit demand remained unchanged in the six months to September 2022, with 17% of SMEs reporting that they applied for bank finance. When this is broken down by firm size, credit demand has increased slightly among micro companies (+1%) and decreased among medium sized companies (-3%). 79% of respondents cited they had sufficient internal funds as their reason for not seeking finance. Other stated reasons included a desire not to be indebted (13%) and a belief that current lines of credit were sufficient (14%).

When looking at approval rates, 90% of all SME credit applications were fully or partially approved at the time of surveying.

The average cost of credit reported by the Central Bank of Ireland for outstanding loans was 4.47% an increase from 3.4% in 2021. 43% of SME Credit Demand respondents stated they were unaware of the interest rate attached to their outstanding loans. Interest rates for SMEs in Ireland are typically higher than the European average; however, consecutive surveys have shown that only 2% of respondents reported the cost of credit as their reasoning for not seeking it.

Data for venture capital was provided by the Irish Venture Capital Association (IVCA) and includes both funding by business angels as well as venture capital funds. Levels of venture capital remained stable in 2022 at EUR1.3 billon, no change from 2021. At the Q3 mark in 2023, funding levels have remained stable, showing an increase of 6% ytd, with SMEs raising a total of EUR1.1 billion in the first 9 months of 2023, compared with EUR1 billion in the same period in 2022. A sharp slowdown was noted in Q3 2023 with a drop of 38% in funding in this quarter. Ireland had until this point avoided the global slowdown in equity investment experienced by most other countries in the last 18 months. The Q4 2023 data will show whether this is the start of a longer recalibration, such as those experienced elsewhere, or just one weak quarter.

Venture Capital funding in Ireland has grown steadily over the last number of years. In 2018, total funding was just over EUR 740 million; this had increased by 2022 to EUR 1.3 billion. This is an increase of 75% in funding between 2018 and 2022.

This growth has been driven by a number of factors: the maturation of the local VC industry, the participation of international funds, the growth in private equity participation and the increased support of the Irish State through the Enterprise Ireland Seed and Venture Scheme and the role the Ireland Strategic Investment Fund has played in supporting funders and attracting new participants to the market.

Corporate bankruptcies in Ireland are dealt with under three different processes: liquidation, examinership and receivership. In Ireland the figures provided are from insolvent company liquidations.

A company may be liquidated by:

  • Resolution of the members of the company following a declaration of solvency;

  • A resolution of the members ratified by the creditors; and

  • An order of the court.

Corporate insolvencies in Ireland have increased thus far in 2023, returning towards pre-pandemic levels and the long-term average. The total number of insolvencies have increased by 33% in the first three quarters of 2023 compared to the same period in 2022. In the context of the increased total number of companies the corporate insolvency rate remains at historically low levels, approximately 30% below 2017 and 2018 levels. The exceptional decrease in insolvencies during Covid-19 is expected to contribute to an increase in corporate insolvencies in the future as Government supports developed to respond to the pandemic are withdrawn.

Since 2011, the Government policy focused on ensuring that all viable SMEs have access to an appropriate supply of credit from a diverse range of bank and non-bank sources. In this regard, the Government has developed a number of initiatives to ensure that the supply of credit in the market is sufficient to meet the existing and future funding needs of SMEs. There are over 170 different government supports for Irish start-ups and small businesses. The online tool supportingSMEs.gov.ie helps Irish start-ups and SMEs search the range of government support available. Ireland also continues to encourage investment in SMEs through a series of tax reliefs. For example, the Knowledge Development Box (KDB) is an OECD-compliant intellectual property (IP) regime for income arising from qualifying assets such as computer programmes, inventions protected by a qualifying patent, or certified inventions for SMEs.

As mentioned above, established in 2010 Credit Review helps SMEs or Farm borrowers who have had an application for credit of up to EUR 3 million declined or reduced by participating banks, and who feel that they have a viable business proposition. Credit Review also looks at cases where borrowers believe that the terms and conditions of their existing loan, or loan offer, are unfairly onerous or have been unreasonably changed to their detriment.

Credit Review received 1,275 formal applications by the end of 2022. Of these, 922 have reached a final conclusion, with Credit Review upholding appeals in favour of 543 borrowers, including those with a commitment to reassess the lending in the future if agreed performance hurdles are met in the short term. The upheld appeals resulted in EUR 77.4 million in credit being made available to SMEs and farms, helping to protect/create an estimated 5,162 jobs.

Established in September 2014, the Strategic Banking Corporation of Ireland (SBCI) is Ireland’s National Promotional Institution. The strategic mission of the SBCI is to deliver effective financial support to Irish SMEs, including primary producers (farmers and fishers) that address gaps and failures in the Irish credit market, while driving competition and innovation, together with facilitating the efficient use of available EU resources. The SBCI achieves this through the provision of low-cost liquidity and risk-sharing activities supporting the provision of appropriately priced, flexible funding to SMEs.

In 2018 – 2022, the SBCI’s risk-sharing capability and products were developed further with the launch of several products aimed at ensuring that viable SMEs impacted by Brexit, COVID-19 or the large-scale aggression of Russia against Ukraine are able to access appropriate finance;

The Brexit Loan Scheme launched in 2018 made lending available to Brexit-exposed businesses with up to 499 employees to help them innovate, change or adapt to overcome their Brexit challenge. The maximum interest rate was 4%. Loans ranged from EUR 25 000 to EUR 1.5 million, with unsecured loans of up to EUR 500 000 and terms ranging from 1-3 years.

As of 10 May 2021, 292 loans were sanctioned at the finance provider level to a total value of EUR 57.46 million. The scheme closed in October 2021.

In March 2020, in response to the onset of COVID-19 in Ireland, a proportion of the funding made available under the Brexit Loan Scheme was repurposed for use by eligible businesses impacted by the pandemic. Under the COVID-19 Working Capital Scheme, loan features were similar to those of the Brexit Loan Scheme. 948 loans were sanctioned to a total value of EUR 118.532 million. The scheme closed in July 2021.

Launched in 2019, the Future Growth Loan Scheme (FGLS) initially made up to EUR 300 million in lending available for terms of 7-10 years as a means of addressing a lack of availability of long-term loans in the marketplace. In response to COVID-19, the scheme was expanded by EUR 500 million in July of 2020.

Loans under the scheme ranged from EUR 25 000 to EUR 3 million, with loans of up to EUR 500 000 available unsecured. The initial maximum interest rate was capped at 4.5% for loans up to EUR 249 999 and 3.5% for loans more than or equal to EUR 250 000 for the first six months. The rates thereafter were variable. These rates represented a significant saving compared to typical SME lending in the market. The scheme was available to SME business with up to 499 employees including primary agriculture and seafood sectors.

The Future Growth Loan Scheme (FGLS) has now closed to applications. As of 15 May 2023, there have been 3,512 loans progressed to sanction under the scheme, to a total value of EUR 771.2 million. A review of the FGLS was completed in 2022 with guidance from a Steering Group chaired by a senior official from Department of Enterprise, Trade and Employment (DETE) and with representatives from DETE, the Department of Agriculture, Food and the Marine (DAFM), the Strategic Banking Corporation of Ireland (SBCI), Enterprise Ireland (EI), and the Economic and Social, Research Institute (ESRI).A mixed methodology approach was taken for the review of the FGSL and included desk research, business surveys, stakeholder interviews and case studies. The findings from the review provide an early evidence base that SMEs are willing to borrow to invest in strategic investment when a viable and attractive loan product is available to them, in the context of low demand for credit more generally by SMEs. While it is still early in the lifetime of the scheme relative to the ten-year tenure of loans, the research also clearly indicates that the lending through the scheme is translating to benefits in terms of increased innovation activity and increased productivity, employment and turnover. Such strategic investments are crucial in building a resilient enterprise that can weather the current and future economic crisis as well as respond to the environmental sustainability challenge.

Access to appropriate finance is a key framework condition for encouraging SMEs to invest in their future sustainability and growth. It is also critical for adapting SMEs towards more energy-efficient, sustainable and climate-friendly activities, processes and products. The evidence base from the review of the FGLS points to continued demand for the type of lending available through the scheme. However, the study also finds that lenders still consider this type of lending high risk and face barriers related to capital requirements and so currently do not see themselves in a position to provide longer-term unsecured loans at an affordable price point for SMEs in the absence of a State- guarantee.

The Brexit Impact Loan Scheme (BILS) was launched in mid-October 2021 to provide up to EUR 330 million in lending and was available to eligible Brexit-impacted businesses in Ireland, including those in the primary agriculture (farmers) and seafood sectors. This lending capacity also served the COVID-19 Loan Scheme (see below). This Scheme remained available until the end of December 2022.

Finance provided under the BILS was competitively priced and was offered at favourable terms. Loans range from EUR 25,000 to EUR 1.5 million per eligible business, with loans up to EUR 500,000 available unsecured. Lending was available for terms of one to six years with a maximum interest rate of 4% and some elements of refinancing were supported through the scheme.

The final drawdown on the Brexit Impact Loan scheme was 1,931 loans with a value of EUR 261,201,589.

Due to the cessation in June 2022 of the European Commission’s COVID-19 State-Aid Framework and the Covid Credit Guarantee Scheme that was based on that Framework, the Government introduced the COVID-19 Loan Scheme (CLS) in July 2022 to ensure that an appropriate option for access to finance remained in place for COVID-19 impacted SMEs. Therefore, the Brexit Impact Loan Scheme (BILS) was widened by Government to allow access to COVID-19 impacted SMEs.

CLS loans ranged from EUR25,000 up to EUR 1,5 million with terms of one to six years, and unsecured up to EUR 500,000. Access to this scheme was based on businesses meeting a criterion of business being impacted by the COVID-19 pandemic, resulting in business turnover or profit being negatively impacted by a minimum of 15%. The CLS closed on the 31st December 2022 having sanctioned 276 loans with a value of EUR 27.916 million.

Following the success of the Future Growth Loan Scheme, the Growth and Sustainability Loan Scheme is a new long-term loan guarantee scheme that will make up to EUR 500 million in longer-term lending available to SMEs, including farmers and fishers and small mid-caps. Loans of between EUR 25 thousand and EUR 3 million, with terms of up to 10 years and attractive terms and conditions, will be made available through the scheme to eligible SMEs through participating finance providers, with loans of up to EUR 500 thousand available unsecured. It is intended to launch this scheme to the market in mid 2023.

Up to 70% of lending will be for strategic investments with a view to increasing productivity and competitiveness and thus underpinning future business sustainability and growth. The Growth and Sustainability Loan Scheme will target a minimum of 30% of the lending volume towards environmental sustainability purposes with the aim of encouraging SMEs to take positive actions in support of the climate change agenda.

The EUR 1.2 billion Ukraine Credit Guarantee Scheme was launched 30 January 2023 to make loans available to businesses that have been impacted by rising costs as a result of the large-scale aggression of Russia against Ukraine. The Scheme provides an 80% State guarantee on loans with terms of between 3 months and six years and loan values of between EUR 10,000 and EUR 1 million. Loans can be used for working capital or investment purposes. The Scheme is available to SMEs, small mid-caps and primary producers until 31 December 2024.

As a result of the high level of the State guarantee, loans are being provided at interest rates lower than the current market rate for similar loans and loans up to EUR 250,000 are unsecured.

The EUR 2 billion COVID-19 Credit Guarantee Scheme was launched in September 2020. The Scheme was developed in accordance with the European Commission’s Temporary Framework and ceased providing new lending after 30 June 2022 in line with the cessation of the Framework. The Scheme provided an 80% State guarantee on lending for terms between 3 months and five and a half years and offered a range of lending products between EUR 10,000 and EUR 1 million including working capital and term loan facilities. Loans up to EUR 250,000 were unsecured. The Scheme was available to SMEs, small Mid-Caps and primary producers.

As a result of the high level of the State guarantee, loans were provided at interest rates lower than the current market rate for similar loans. Borrowers paid a small premium as required by the Framework.

A total of 9,857 loans were drawn under the scheme for a value of EUR 708.8 million, supporting over 81,000 jobs.

MFI was established in 2012 to provide loans to microenterprises with fewer than 10 employees and with an annual turnover of less than EUR 2 million, which do not meet the conventional risk criteria applied by commercial lenders. MFI provides much-needed funding to help microenterprises meet payments for stock, working capital requirements and other overhead expenses through the provision of low-cost lending facilities with attractive terms and conditions. MFI also provides post-approval mentoring services to its borrowers through the Local Enterprise Office Network.

The loan term is typically three years for working capital purposes and can be extended to five years for capital expenditures. Interest rates range from between 5.5% for clients of Local Enterprise Offices and other partners to 6.5% for direct applications.

Since its establishment, and as of the 30th of April 2023, MFI has approved a total of 4,791 loans to the value of EUR 79.1 million, supporting over 10,000 jobs.

The Seed & Venture Capital Scheme (2019-24), operated by Enterprise Ireland, aims to foster a strong pipeline of high-growth, innovative businesses in the Irish economy by increasing the availability of appropriate sources of risk capital for start-up/early-stage businesses with high growth potential at each stage of their development and by signalling strong Government support for an innovative enterprise culture

Enterprise Ireland’s Seed & Venture Capital Scheme (2019-24) is now fully deployed, having run three calls between 2019-2021 to allocate the Scheme’s EUR 175 million capital available,

The current Scheme has funded 14 venture funds with a combined size of EUR 1.05 billion. The SVC is directed towards Seed-Series A Stage companies in the sectors of ICT, Lifescience, Agritech and Food.

Enterprise Ireland and Ireland Strategic Investment Fund co-invest in a fund of funds known as the Irish Innovation Seed Fund. Launched in February 2022, this programme is a EUR 90 million fund-of-funds, made up of a EUR 30 million investment from the Department, through Enterprise Ireland, which is matched by a EUR 30 million investment from the European Investment Fund, and a EUR 30 million co-investment from the Ireland Strategic Investment Fund.

As a fund-of-funds, the programme will invest in other specialist fund managers who will target high-growth innovative companies based on disruptive intellectual property, who are at the early stages of external funding for innovative, high-growth, scalable sectors.

The first successful fund was announced in June 2023, where WakeUp Capital, a female lead fund, will be allocated up to EUR 35 million.

The second Fund was announced in November 2023 with Resolve Ventures receiving an allocation of EUR 20 million. A third allocation of funding is expected to be announced by the end of 2023.

This programme is the first opportunity to collaborate with the European Investment Fund to provide a specific equity product for Irish companies at seed stage. The development of this programme has strengthened relationships between the Department and European Investment Fund and can potentially open up the opportunity to develop an equity programme that is focused on companies who struggle to gain financing to successfully scale.

Business Angels are important to the funding ecosystem for SMEs in Ireland. Halo Business Angel Network (HBAN), a joint initiative of Enterprise Ireland and InterTrade Ireland, is responsible for the promotion of business angel investment in both Ireland and Northern Ireland. HBAN actively works to increase the number of angel investors involved in early-stage investments and supports the formation of new and existing angel networks, both regionally and internationally, and within industry sectors. Over EUR 33 million was invested across 86 deals in start-up and early-stage companies on the island of Ireland in 2022. This compares to EUR 18.2 million invested across 71 deals in 2021.

The Ireland Strategic Investment Fund (ISIF) invests on a commercial basis in a manner designed to support economic activity and employment in Ireland. To ensure efficient delivery of funding to the SME sector, the support of which requires large volumes of granular debt and equity investments to be made in underlying SMEs, the ISIF will generally target investment in private sector entities that interface directly with those SMEs. Programme terms are flexible, once the underlying requirement that the funding is provided on a commercial basis is met. ISIF also operated the Pandemic Stabilisation and Recovery Fund, which focused on investment in medium and large-scale enterprises in Ireland, making capital funding worth up to EUR 2 billion available to medium and large enterprises on commercial terms.


Central Bank of Ireland, Trends in Business Credit and Deposits: Q4 2022: https://www.centralbank.ie/docs/default-source/statistics/data-and-analysis/credit-and-banking-statistics/business-credit-and-deposits/2022q4_trends_in_sme_and_large_enterprise_credit_and_deposits.pdf?sfvrsn=8acb991d_4

Credit Demand Survey, April – September 2022 : https://www.gov.ie/en/press-release/076b1-credit-demand-survey-april-2022-september-2022/

Credit Review, Credit Review Twenty-second Report, 2022: https://www.creditreview.ie/wp-content/uploads/2023/07/22nd-Report-from-Catherine-Collins-Published-3-July.pdf

Central Statistics Office, Business Demography 2021: https://www.cso.ie/en/releasesandpublications/ep/p-bd/businessdemography2021/

Central Statistics Office, Business in Ireland 2020:


Department of Business, Innovation and Enterprise: https://dbei.gov.ie/en/

Enterprise Ireland, https://www.enterprise-ireland.com/en/funding-supports/

Ireland Strategic Investment Fund, https://isif.ie/

Irish Venture Capital Association, http://www.ivca.ie/

SCBI, Strategic Banking Cooperation of Ireland, https://sbci.gov.ie/

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