AN AWARD-WINNING chef has accused the banks of “smothering the sparks of economic recovery” after he and his business partner were refused a €150,000 loan to start up a new French bakery in Dublin.
Pastry chef Yannick Forel and his partner, Ruth Savill, plan to open the bakery on Moore Street and have lined up 25 staff to work in the business.
They invested €100,000 each in the venture but need another €150,000 to get it off the ground.
They are now looking for an investor after being refused a loan by Bank of Ireland, AIB and Ulster Bank. Unlike other owners of small businesses, who have complained privately about a lack of credit but declined to go public, Mr Forel and Ms Savill are prepared to express their frustration with the banks.
“The banks are no longer willing to take even the slightest risk in order to encourage new enterprises. A fantastic opportunity will have slipped through the nets because they are paralysed with fear,” he said.
The pair plan to produce 20,000 croissants, brioches and baguettes each day, using imported French flour, natural yeast and artisanal baking methods. They say wholesalers supplying restaurants and hotels have already agreed to take half their output and many staff have agreed to work for the minimum wage to help get things going.
Mr Forel, a winner of French national breadmaking awards, has extensive restaurant experience in France and has worked in the Brook Lodge Hotel in Macreddin, Co Wicklow, and Fallon Byrne in Dublin.
Time is running out for their plans after the loan refusals.
“Bank of Ireland strung us along, making positive noises for months. Then, after a year, they said no,” said Ms Savill.
According to her, the main reason the bank gave for its refusal was Mr Forel’s lack of experience running a wholesale food business, as opposed to a restaurant. Another obstacle was a lack of property as collateral, but Ms Savill says they have guaranteed a further €100,000 as security.
“It seems so unfair. We have everybody on board and we’ve jumped through every hoop that was asked of us, but they still said no. It seems everything is against you if you want to set up in business.”
A former television journalist from England, Ms Savill has lived in Ireland for the past 16 years. “I sense in Ireland that no one wants to take a risk anymore. People are all ‘hail fellow, well met’ but underneath they are deeply conservative,” she remarked.
Bank of Ireland, AIB and Ulster Bank all refused to comment on individual cases – even with their customers’ consent – but stressed that they were willing to provide loans for “viable” ventures.
Bank of Ireland said it was “100 per cent” committed to supporting small and medium size enterprises and had loaned a total of €1.6 billion to businesses in the past year. “There is no viable business that gives us a good business plan that we will not support,” said a spokeswoman.
Ulster Bank said it was “open for business” and continued to lend to “viable” projects. “Start-ups who approach the bank are expected to illustrate adequate debt-service capacity and may be expected to provide security collateral,” a spokeswoman said.
AIB also said it was very keen to support SMEs in situations where people came in with viable opportunities.