The Changing Face of Finance – Funding SMEs

Breakfast Finance Seminiar

Crowe Horwath joined up with Eversheds law firm to deliver a joint breakfast briefing to address funding issues facing SMEs.

The briefing, attended by over 70 guests, took place on Tuesday 18 October, 2016, at the Royal College of Physicians, Kildare Street, Dublin 2. The speakers were: Naoise Cosgrove, Managing Partner, Crowe Horwath; Gerard O’Reilly, Partner, Crowe Horwath; David O’Beirne, Partner, Eversheds and Michael McCambridge, CEO McCambridge Bread.

Speaking at the seminar, Naoise Cosgrove, Managing Partner, outlined some of the changes that have taken place in the funding market since 2008. “The conditions for SMEs seeking to access funding for their businesses changed considerably in the wake of the crash. SME’s need to be aware of the increased focus on issues such as additional transaction costs, limited use of personal guarantees, detailed security structures, and a greater emphasis on cashflow.”

Gerard O’Reilly, Partner at Crowe Horwath, said “During the recession, companies were enormously challenged because of the lack of access to finance from the traditional source i.e. the banks. Business owners had to become more resourceful in sourcing funding from other sources such as equity finance, invoice discounting and mezzanine finance. While access to senior debt from the banks has become somewhat more available again, SMEs need to be aware that there is still a need to deploy other funding mechanisms to grow their businesses in the recovery period, and that there is range of options available to them.”

Michael McCambridge, CEO, McCambridge Bread, outlined his company’s experience from the 2007/08 period to date in terms of accessing the funding necessary to maintain the business. Having refinanced in the 2007/2008 period, the company, which was established in Ireland in 1945, experienced further trading difficulties from 2009 to 2012, a period when access to funding had become a major issue for most SMEs. The market began to ease in 2012, however, the new environment meant that the business sought funding from a wider base than bank debt, and is now accessing finance from a range of sources including mezzanine finance, invoice discounting, alongside the traditional banking sources.