Fianna Fáil Spokesperson on Jobs Dara Calleary is accusing the Government of ignoring the seriousness of the plight of businesses whose loans are being sold on to vulture funds. Many of these companies are finding that the protections offered under their original loan agreements are not as robust as they were led to believe. The number of Irish firms affected by this practice is rising as a result of banks exiting the Irish market, or reducing their services and selling of parts of their loan books to outside funds.
Deputy Calleary commented, “The fact of the matter is that jobs are at risk because the Government has done nothing to protect companies whose loans have been sold off by their bank. AIB and Bank of Ireland have so far been willing to sit down with customers to put new facilities in place; however Ulster Bank has exited the business market and are completely disinterested in engaging with some of their customers. Currently I am dealing with two cases whereby 50 jobs are on the line because the companies are unable to get a fair deal or competitive banking facilities.
“The Government committed to having the credit guarantee scheme revised to allow the participating banks fund businesses whose banks were leaving the market. However, Ulster Bank’s customers are falling through the cracks even though it participates in the scheme.
“This is an urgent issue that Ministers Bruton and Nash can no longer afford to ignore. It has the potential to have a major impact on employment levels and is dampening any opportunity for businesses to make gains from whatever recovery is beginning to take hold.
“The figures for 2014 show that 40% of SME debt in the pillar banks was in long-term arrears. Alternatives must be made available to businesses which have managed to trade through the economic downturn and now need some type of break to keep them afloat.
“There has been a lack of urgency in the Ministers’ response to this extremely serious issue. There has been a major focus on mortgage debt over the past weeks and months, but the issue of SME lending is equally important. There is no longer time to delay. They need to legislate to put in place a regulatory regime which protects SMEs whose loans are sold from predatory practices including significantly increased interest rates and unjustified increases in fees and charges. The state owned banks should also support firms who want to refinance with a mainstream credit provider”.