NACFB chairman Marcus Grimshaw delivered the forecast following a business briefing in Belfast yesterday.
Organised in partnership with the Mark Patterson Consultancy, the event examined how small and medium enterprises can access funding to boost their growth. Grimshaw briefed attendees – comprising local business leaders and advisory firms on the finance options currently available in Northern Ireland.
The existing pool of active lenders features domestic institutions such as Danske Bank alongside UK-wide providers Bridgebank Capital, Close Brothers Group, Barclays, Santander and Funding Circle.
With demand for business finance steadily re-emerging, NACFB predicts the number of active lenders in Northern Ireland will double before the end of 2015.
Commenting, Marcus Grimshaw, chairman of the NACFB, said: “Many small businesses in Northern Ireland have suffered from a lack of investment and limited credit supply, having fallen out of favour with traditional lenders and seen their funding lines stifled since the downturn.
“Even so, there is no doubting the great potential of this market: small businesses account for 99.9% of all businesses in Northern Ireland and continue to employ almost 350,000 staff.
“We are now seeing a clear change of mindset among local businesses and their advisers, with growing appetite for investment to support a return to growth. As conditions improve and the green shoots of recovery break through, banks and other lenders are actively reopening their doors to small business owners.
“The next step is for a wider pool of lenders to seize the mantle and champion the revival of small business fortunes in Northern Ireland. Entrepreneurial lenders have helped to drive the recovery elsewhere in the UK, and fresh impetus through new funding for Northern Irish businesses will be vital to reach escape velocity and achieve a similar upturn.”
Grimshaw identified a lack of knowledge about funding options as a key barrier to SME growth, and briefed attendees on the alternative finance options available to small businesses in Northern Ireland. Across the UK as a whole, SMEs borrowed £10.5 billion during 2012/13 from alternative sources of finance – up by 21% since 2011/12. Small business loans from conventional lenders fell by 10% during the same period.*
He continued: “Northern Ireland’s business community has arrived at the same point its mainland neighbours reached around 18 months ago, with many SMEs beginning to find their feet.
“Any lender with an appetite for serious expansion should consider Northern Ireland as ripe for growth between now and 2015, and the days of limited access to finance for entrepreneurs are hopefully numbered.”