Last week, Ortus Secured Finance found that just 1.5% of the Enterprise Finance Guarantee scheme was reaching Northern Irish businesses as the lender felt there was a severe ‘funding gap’ faced by Irish SMEs.

According to comparison site Choose Wisely, many lenders were put off from lending in Northern Ireland due to the extra documentation needed to lend in the region as it has its own loans and debts systems.

Jon Salisbury, Managing Director of Ortus, felt that many did see it as a higher-risk jurisdiction with its different systems and laws.

“We researched the market for over a year before doing our first deal and I expect other lenders will be similarly careful.”

Meanwhile, Bob Sturges, Head of PR & Communications at Fortwell Capital, added: “Lending in the province continues to present a unique set of challenges for UK lenders.”

Ashley Ilsen, Head of Lending at Regentsmead, felt that Northern Ireland was still perceived as a relatively fragile market.

“Northern Ireland is still an area that we would identify as high risk.”

Benson Hersch, Chief Executive of the Association of Short Term Lenders (ASTL), added: “Lenders do not feel comfortable about a market they know little about.  

“No doubt some will dip their toe in the water, but more out of a desire to expand rather than due to competition elsewhere.” 

However, the British Bankers’ Association (BBA) recently found that last year saw new lending increase in Northern Ireland by 7% as it looked to improve its presence in the region with the appointment of a non-executive chairman to its newly established Northern Ireland Committee.

“With around 32,000 people employed in its financial services sector, Northern Ireland is a well-established financial hub,” Anthony Browne, BBA CEO, stated.

“So it is only right that we should serve this important part of our industry and ensure we can offer all our members based in Northern Ireland the same level of service and guidance [that’s on offer] to other parts of the United Kingdom.”

Ian Jordan will take up the role of non-executive chairman and he wants to use his position to improve lending in Northern Ireland.

“As a priority, my aim is to build stronger relationships between the region’s banking sector and politicians, professional institutions and trade bodies.

“Where common interests are shared, my aim is to support Northern Ireland’s banks in delivering the BBA’s priorities of helping customers, promoting growth and raising standards.”

Despite ruling out a move into Northern Ireland for Regentsmead, Ashley added: “Perhaps growing competition in the sector may require more lenders to start having a look at NI as a viable region to grow any lending activity.”

Meanwhile, Jon concluded by remaining positive about the future of lending in Northern Ireland.

“We are already seeing more competition and we expect to see more because bridging lenders are generally good innovators. 

“We see competition as a good thing because it will further drive activity in Northern Ireland.”