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SFA says investment key to future

The key to Ireland’s future success is enhancing equity finance and investment in  small firms to encourage future growth. That’s according to The Small Firms Association chairman, AJ Noonan. Speaking on this Monday, he said, “Irish small firms rely heavily on banks as a source of external finance which makes them vulnerable to changes in the banking sector. As banks  comply with more regulations, lending to SMEs will remain restrictive compared to the pre-crisis period. This is a problem and therefore, a greater diversity of funding options are necessary to ensure a constant flow of finance. The SFA chairman highlighted the fact that equity finance is not widely used by  Irish small firms. The European Central Bank’s latest SAFE survey shows only 8% of the SMEs used equity finance as a source of funding. “Currently in Ireland the demand for equity finance is low, as there is no  culture or tradition of using equity finance. Also small firms fear that they will lose control …

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