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Inflation and its impact on Ireland’s SMEs

The cost-of-living crisis has been covered extensively in the media over the past few months, but what has been less comprehensively reported is the rising cost of doing business. In this article we take a closer look at the mounting costs facing business owners and the impact it’s had, and we also supply hints and tips for anyone looking to borrow…

Starting with some good news, our recent survey of close to 1,000 SMEs in Ireland and the UK, tells us that in spite of the multiple pressures facing them, business owners’ appetite for borrowing to invest in growth is the strongest it’s ever been, with two-thirds of respondents (Ireland: 75%) answering ‘yes’ to the question ‘does your business plan to seek funding for business investment in the next 12 months’.

While investment intent is strong, some 40% of firms (Ireland: 41%) have missed a business opportunity in the last 12 months due to a lack of available finance. In addition, confidence in the economy has cooled, with 54% (Ireland: 57%) of SMEs concerned for further economic slowdown.

Impact of inflation

In Ireland, nearly half (47%) of businesses have been negatively impacted by rising inflation, while only 28% feel raising interest rates is the right thing to do to help curb inflation (28% ‘yes’; 51% ‘no’; 21% ‘unsure’).

While businesses have been asked not to raise wages, over half will be doing just that as they try to help their employees keep up with rising costs.

In addition, three quarters of firms plan to pass additional costs onto customers (22% ‘fully’; 52% ‘partially’) while the remaining quarter have chosen to absorb the costs.

Tips for borrowers

All lenders will be asking for more information from borrowers because as the economy continues on its current projected path, underwriting criteria will inevitably tighten.

But please don’t take this personally – this is true for all lenders; a willingness to offer information gives a good impression to a lender.

  • Be prepared to offer information – the clearer the picture we have, the easier the decision is to make. Recent accounts and bank statements are a must but if these aren’t available, management information is helpful, along with cash projections for the period ahead. 
  • Be prompt in responding – the sooner we receive the information the quicker our decision gets to you.
  • Provide ALL the details – for example, recent house moves, multiple properties, all directors of the firm (lenders will do searches), recent changes, from partnership to limited company.

Products to help you grow

Business Loans

Our unsecured Business Loans for Limited companies are available when you need to borrow funds to invest, injecting cash when you need it.

Tax Loans

Our popular Tax Loan facility is designed to help manage this recurring expense. Our unsecured Tax Loans permit you to spread the cost of your tax demand into more affordable monthly payments.

Payment can be made directly to HMRC or to a bank account of your choice.

Hire Purchase

Hire Purchase allows outright ownership of the asset and enables you to spread the cost over a term that suits you.


If you want to maximise the use of your equipment without the responsibility of owning it, leasing will give you the freedom and flexibility you need.