Connacht based firms are resorting to using credit cards and bank overdrafts to fund the export of their goods, according to new research.
Despite the Government pinpointing exports as a key way to return to growth, the survey reveals that of the Connacht exporters surveyed, 13 per cent are relying on bank overdrafts to fund export activity, eight per cent use credit cards, and seven per cent have had to dip into their own personal savings.
The survey of 350 businesses across Ireland, carried out by leading independent export invoice financier Bibby Financial Services, also found that most firms receive little or no help from government agencies when trading abroad.
Among the Connacht exporters surveyed it found 44 per cent of business owners and managers said it was too expensive to ship their goods, 48 per cent of businesses cite a lack of support as a barrier to export and 43 per cent said they did not have enough knowledge on which export markets to target.
“The Irish Government places a huge emphasis on the role of export activity in helping to bring about economic recovery,” said Graham Byrne, Bibby Financial Services Ireland director. “It is therefore worrying that our research findings show that Connacht exporters are funding overseas activity with temporary and costly finance solutions in the form of overdrafts and credit cards.
“This trend needs to be urgently addressed — exporters using such methods are working on shaky ground. At the heart of exporting is the requirement of flexible funding, and Connacht SMEs need to look at the alternative funding options to ensure that they are maximising overseas opportunities.”
Of those surveyed already involved in export activity, 69 per cent having trouble with maintaining cash flow, 64 per cent cite securing new business as a core challenge, and more than half (56 per cent ) claim that access to finance is an ongoing challenge.
