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RTÉ News
3 days ago
- Business
- RTÉ News
Businesses growing cautious and reducing forecasts
Business activity in the Irish SME sector has edged into negative territory for the first time since 2020, according to to a new business confidence survey by lender Linked Finance. Post pandemic trade was strongest for SMEs in 2022, and over the last three years that has remained in positive territory, until now. While that sentiment reflects the overall general picture, sectors within the SME sector are still performing well, particularly larger businesses. Linked Finance CEO Niall O'Grady said that it was understandable that some businesses are adopting a cautious mode, concerned about tariffs or revising their forecasts. "We live in uncertain times, and it is not surprising that SMEs in Ireland are tempering their outlook given constant reports, and now confirmation, about tariffs. This is combined with continuing conflict in both Europe and the Middle East." One-in-three SMEs reported that business results were lower year-on-year, an increase of 2% on the same period last year. While the increase is not overly significant, it does show that several factors – both externally and domestically - are affecting the performance of SMEs. Business optimism amongst all Irish-based SMEs surveyed was 67% six months ago, but that has now dropped to 61%. Exporter optimism in Q1 2025, which had increased due to a bounce in orders rushed to warehouses ahead of threatened tariffs in the US, has dissipated somewhat. The retail and wholesale trade is the one area within the broader SME sector that saw increased optimism levels in the second quarter, with positive sentiment up 5% year-on-year. Business activity and outlook While just over two-in-three businesses reported that their activity is the same, or higher, compared to the same period 12 months ago, it is the first time in five years that the tracker tipped into negative territory in terms of the gap between positive and negative (-3%). Given the uncertainty in the markets and geo-politics in Q2, this still shows a good degree of resilience. While large businesses are holding up well, medium sized SMEs (4-9 people) have seen the biggest change year-on-year, with almost a quarter reporting that business activity is down compared to the same period last year. Activity levels at indigenous businesses are almost flat year-on-year, while the number of exporters who experienced a drop in trade between Q1 and Q2 2025 jumped by 10% - mainly the result of increased activities in Q1 as exports were boosted ahead of incoming tariffs. Dublin-based SMEs performing better Dublin-based SME businesses are performing much better than those in the regions in terms of business activity. Dublin-based firms noted an improvement in activity – with 76% reporting trade was the same or higher – but for those based outside the capital, only 62% reported this was the case. The sentiment for Q3 2025 is now in slightly negative territory (-3% gap on positive over negative), with mid-sized businesses seeing the biggest impact here. Only one-in-five expect Q3 2025 to bring a boost in business, compared to almost one-in-two when surveyed this time 12 months ago. On the positive side, large SMEs remain optimistic for Q3, with 46% expecting an upturn in business. The Linked Finance CEO said there are several positive take-aways from the data, particularly that large companies remain bullish for the next quarter – "which is important as they employ the most people here". He said, "In addition, micro businesses are seeing a slight improvement while the retail and wholesale trade is showing some green shots." The quarterly Business Confidence survey is conducted by Ipsos B&A on behalf of Linked Finance, which is Ireland's leading SME peer-to-peer lender. In operation since 2013, Linked Finance has lent more €350 million to the Irish SME sector, and recently raised €50 million in wholesale funding that is available to its SME borrowers. The most recent survey was conducted several days before the EU and the United States agreed a deal on tariffs. Impact of global trade concerns SMEs were asked how concerned they are about the possible impacts of a global trade war based on the US's campaign of trade tariffs. Overall, almost one-in-four were not concerned about this. However, in terms of larger SMEs as a sub-group, 54% said that they were concerned this would have either a slight - or big - impact on their business, while one-in-three medium sized firms believed it would have a slight impact. "While the recent announcement of 15% tariffs for many EU goods is not a welcome one, there is a bigger picture to consider," according to Mr O'Grady. "Many SMEs in Ireland provide services – and this sector continues to thrive – and is exempt from tariffs. We now have a stronger level of certainty about where things are at, which enables businesses to progress with investment. SMEs are now accustomed to ongoing challenges in the last five years, and I have no doubt that we will see more growth and optimism as the year goes on." Prices and profits More than 50% of SMEs have held their prices over the past year, and 5% reported price cuts in the period. Just over 40% of firms have increased their prices. In the 24 months between Q2 2023 and Q2 2025, the number of SMEs charging higher prices has dropped by 10% - down from 52% to 42% - showing a possible easing of inflationary pressures. Smaller SME businesses are more likely to be charging the same prices, while Dublin based businesses are more likely to be lowering prices (8%) compared to half that number (4%) outside the capital. Overall, prices are plateauing year to date. While SMEs surveyed are still feeling the squeeze when it comes to profitability - with 32% reporting a drop in profit year-on-year - a growing number (44% - up 6% year-on-year) said that operational profit is the same. Micro businesses are stabilising somewhat with almost one-in-two reporting the same profit year-on-year, with mid-sized businesses just tipping into negative territory in Q2.
Irish Examiner
3 days ago
- Business
- Irish Examiner
Geopolitical uncertainty dulls business confidence, says survey
Almost a quarter of medium-sized businesses reported their activity was down compared to the same period last year, a new business confidence survey said. The survey carried out for lender Linked Finance found that business optimism amongst all Irish-based SMEs surveyed was 67% six months ago, but that has now dropped to 61%. One-in-three SMEs reported that that business results were lower year-on-year, an increase of 2% on the same period last year. Large and medium-sized SME businesses continue to drive job creation, with 36% of respondents from these areas reporting higher employee numbers year-on-year. Employment growth appears to focused in Dublin, with only one-in-10 firms outside Dublin reporting increased employee numbers. Overall, Dublin-based SMEs were performing better than those in the regions in terms of activity, the survey said, with 76% reporting trade was the same or higher – but for those based outside the capital, only 62% reported this was the case. The research suggests large businesses are holding up well, but medium sized firms of four to nine people have seen the biggest change year-on-year, with almost a quarter reporting that business activity is down compared to the same period last year. Only one-in-five medium-sized firms expect the third quarter of 2025 to bring a boost in business, compared to almost one-in-two when surveyed this time 12 months ago. Larger SMEs remain optimistic for Q3, with 46% expecting an upturn in business. Linked Finance CEO Niall O'Grady said that it was understandable that some businesses are adopting a cautious mode, concerned about tariffs or revising their forecasts. 'We live in uncertain times, and it is not surprising that SMEs in Ireland are tempering their outlook given constant reports, and now confirmation, about tariffs. This is combined with continuing conflict in both Europe and the Middle East. 'However, there are several positive take-aways from the data, particularly that large companies remain bullish for the next quarter – which is important as they employ the most people here. In addition, micro businesses are seeing a slight improvement while the retail and wholesale trade is showing some green shots.' The quarterly business confidence survey is conducted by Ipsos B&A on behalf of Linked Finance, amongst a sample of 360 business owners/managers countrywide.
BreakingNews.ie
28-05-2025
- Business
- BreakingNews.ie
Two thirds of Irish SMEs concerned about impact of new global trade war
A record high in optimism levels seen amongst Irish small and medium sized businesses (SMEs) several months ago has dropped back to more average levels as the turmoil of high US tariff announcements - and subsequent pauses - drives more uncertainty. That is according to a new business confidence survey by Linked Finance. Advertisement Business optimism amongst all SMEs was 67 per cent at the end of Q4 2024, but this has dropped back to a more average 62 per cent, for Q1 2025. While there has been no 'cliff edge' fall in business activities, they remain in slightly negative territory year-on-year. SMEs surveyed for the sentiment tracker reported a drop in business of -5 per cent at end of Q1 2025, compared to a dip of -3 per cent for the same period in 2024. Business activity and outlook There was a significant upward spike in activities by exporters last quarter, likely due to a surge in orders to fill warehouses ahead of signalled changes to trade and new tariffs - announced by US president Donald Trump on April 2nd last. The survey shows that 36 per cent of exporting SMEs saw higher business activity in the first quarter of this year, compared to 25 per cent of SMEs focused on the indigenous sector. Advertisement Concerns around a potential trade war are higher among the larger Irish SMEs surveyed, business based outside Dublin, and those in the retail/wholesale sector. One-in-four are very concerned about the issue, post the initial announcement of trade tariffs in the US. In terms of SMEs' expectations for business activity in Q2 2025, there has been a major swing in that of exporters, with 34 per cent more reporting an expected drop in business, year-on-year. This may however be related to the fact that so much export activity was frontloaded in Q1 of this year. More positively, micro-businesses (which have 1-3 employees) have posted their lowest level of concern since Covid shuttered doors in 2020, with almost seven in 10 confident of the same, or a higher level, of business activity this quarter. While employment levels remain strong, businesses based in Dublin are driving jobs growth, while those based outside the capital are in neutral territory. Advertisement Geopolitical turbulence Linked Finance chief executive Niall O'Grady said that geopolitical turbulence has caused a rapid return to long-term average levels of business confidence, with an uncertain outlook in the medium term. 'While there has been a dip in optimism, and that gap between businesses in the capital and outside the capital continues to exist, Irish SMEs have shown resilience in the past - given the many challenges to trade in recent years - including Brexit and Covid. Micro-businesses only saw a small decline in optimism, and price rises are pulling back, which is good for customers. Linked Finance chief executive Niall O'Grady. 'Given the turbulence and uncertainty experienced since the start of the year, I am not surprised by some of these results; but overall, Irish SMEs are weathering the challenges well. They are understandably concerned about the macro environment, but they are sourcing new markets - which is something many SMEs have been adept at - and may focus on more in the long term.' The quarterly Business Confidence survey is conducted by Ipsos B&A on behalf of Linked Finance, which is Ireland's leading SME peer-to-peer lender. In operation since 2013, Linked Finance recently passed the lending milestone of €350 million, and has just raised €50 million in wholesale funding that is now available to its SME borrowers. Advertisement Prices and profits Year-on-year comparisons show price rises finally declining, with more than half of SMEs maintaining their prices year-on-year. Micro-businesses reported that they are less likely to increase prices, compared to last year. Those SMEs that are currently implementing price increases are located throughout the country, whereas 12 months ago, the firms that were increasing prices were mainly Dublin-based. Profitability remains a key pressure point for SME businesses, with one-in-three reporting that operational profit is lower year-on-year, and it has yet to return to pre-Covid levels. Businesses with between 4 and 9 employees are feeling the pinch most with regard to profitability, while businesses based in Dublin are doing better, with 4-in-10 having higher profits year-on-year. Advertisement Tariffs Exporting SMEs were the most concerned about the US's effort to increase tariffs significantly, with 87 per cent either very concerned, or somewhat concerned. On average, 66 per cent of businesses are concerned about a global trade war, with 80 per cent of those with 10 or more employees reporting that they are concerned. Employment levels Medium and large SMEs (with 10-250 employees) are driving job creation, with 25 per cent of those surveyed reporting higher employee levels compared to Q1 2024. While employment levels generally remain positive overall, sectors such as retail and wholesale are down 5 per cent year-on-year in their employee numbers. Business based in Dublin are driving job growth, while those based outside the capital remain neutral in the same period. Retaining current headcount is the general status, with no upward trend of note, in all sectors combined.
RTÉ News
14-05-2025
- Business
- RTÉ News
Linked Finance hits €350m milestone in lending to SMEs, launches new fund
Non-bank lender Linked Finance said it has now loaned €350m to SMEs since its launch in 2013, adding that over 4,500 SMEs have now benefitted from its funding. Linked Finance said that companies borrowing through the platform are attracted by the fast pace of decision-making, with the process from initial application to receipt of funding taking as little as 24 hours for loans of up to €500,000. It noted the significant growth in loan sizes to SMEs, with the average amount borrowed increasing from €18,000 in 2013 to €115,000 today. "This trend reflects the growing confidence of SMEs in leveraging larger funding amounts to fuel their growth and expansion initiatives," it said. Over the past year, Linked Finance said it was seeing significant demand across various sectors, with the top industries seeking loans including retail, construction, manufacturing and professional services. Linked Finance also said today they have successfully raised over €50m in new wholesale funding that is now available to Irish SMEs. It said its new innovative fund is a first for the Irish non-bank lending sector and came about after the private placement of senior and junior notes issued by a Section 110 company and compliant EU securitisation regulation. The maximum loan size for applicants is up to €500,000, with terms of up to five years. Linked Finance's CEO Niall O'Grady said in an SME sector that needs much more funding support, this new securitisation format establishes an efficient and repeatable funding structure for Linked Finance. "We expect to raise considerable further wholesale funding using this structure over the coming years and are looking forward to continuing to expand financing support for Irish SMEs," he said. Niall O'Grady said he believes the exit of many banks from Ireland in the past 10 years leaves Linked Finance perfectly positioned to grow in lending and back more great Irish SMEs than ever before. "Being able to turn around a lending decision for a loan of up to €500,000 in 24 hours is a unique proposition, and our objective is always to support SMEs to achieve the growth and targets they have set, or the valuable opportunities they want to pursue," he said. "Flexible finance is where it's at, and we are proud to play a pivotal role in supporting the success of businesses across Ireland. We remain committed to providing accessible, affordable, and transparent financing solutions to fuel the ambitions of the Irish SME sector," he added. Companies that have raised funding with the lender in the past include the Rolling Donut, Kokoro Sushi Bento and Murphy's Ice Cream.
Irish Times
14-05-2025
- Business
- Irish Times
Linked Finance raises more than €50m in new funding for SMEs
Irish peer-to-peer lender Linked Finance has raised more than €50 million in new wholesale funding that is now available to Irish SMEs. Linked Finance connects local businesses who need loans with an online lending community, comprising members of the public, institutions and other investors who are willing to lend to Irish SMEs at attractive interest rates. The company, which was launched in 2013, has so far facilitated more than 4,500 loans for Irish SMEs to the value of about €350 million. The end-to-end process from initial application to receipt of funding takes about 24 hours for loans of up to €500,000, with terms of up to five years. READ MORE The average amount borrowed has increased from €18,000 in 2013 to €115,000 today. In the last 12 months, Linked Finance has seen significant demand across various sectors, with the top industries seeking loans including retail, construction, manufacturing and professional services. Chief executive Niall O'Grady said the group was 'delighted' to reach the €350 million lending milestone and to see 'such significant growth' in its average loan size. 'SMEs are the absolute backbone of the Irish economy – employing two-thirds of the workforce – and we can provide them with a level of flexible and efficient support that the few remaining national pillar banks in Ireland cannot match,' he said. 'Given the significant need to improve and develop better infrastructure across the country, it is also positive to see that Irish construction and manufacturing companies are topping the sectors we lend to, as they have an important role to play in driving this forward.' Mr O'Grady said he believes the exit of many banks from Ireland over the past 10 years has left Linked Finance 'perfectly positioned' to grow in lending and back more Irish SMEs than ever before. 'Being able to turn around a lending decision for a loan of up to €500,000 in 24 hours is a unique proposition, and our objective is always to support SMEs to achieve the growth and targets they have set, or the valuable opportunities they want to pursue,' he added. Companies that have raised funding with the lender in the past include the Rolling Donut, Kokoro Sushi Bento and Murphy's Ice Cream.
