Commercial banks must boost credit to companies in the technology sector that want to scale as part of efforts to position Ireland as a global hub for indigenous digital software firms, according to the chairman of the Irish Software Association (ISA).
Karl Flannery, ISA chairman and CEO of Storm Technology, said Ireland’s technology companies should be backed by proper bank lending that recognises the potential of the tech sector to deliver jobs.
According to the latest SME Lending Demand Study by Mazars, 28% of credit applications by SMEs are rejected – the second highest in Europe.
"While it is difficult to extrapolate these rejection rates to SMEs in the technology sector in particular, the latest Central Bank Quarterly Bulletin shows a year-on-year drop to March of just over 20% for credit to the core software technology companies. Clearly, there is a need for commercial banks, whose business model has largely been based on property-driven lending over the past decade, to relearn best lending practice, developing expertise in critical high growth sectors such as technology and backing viable businesses," said Flannery.
"Silicon Valley Bank expects to lend $50 million over the coming year to Irish technology firms to fill the growing market gap between seed capital and later-stage funding. It deploys ‘bespoke financing’, examining a company’s intellectual property, venture capital investors and whether it can disrupt the market in which it operates. Silicon Valley Bank should help to stimulate a shift in the banking sector to provide forms of financing more suitable to viable software technology companies to enable them to scale and, more importantly, to scale internationally."
Flannery also confirmed 12 October as closing date for entries to the ISA Software Industry Awards. Phil Cox, head of EMEA and India and president of UK Branch, Silicon Valley Bank, will be the keynote speaker.
The ceremony will be held on 9 November at the Burlington Hotel, Dublin.
TechCentral Reporters
Subscribers 0
Fans 0
Followers 0
Followers