Growing your business often requires funding – perhaps you want to tender for a new contract, but you need to know in advance if you can get the funding to fulfil it. You’re considering alternative business loans because:
In this article, we’ll look at some alternatives to business loans: revenue based finance, peer-to-peer lending, line of credit facilities, and invoice discounting. We’ll cover:
If you’re ready to start a conversation with us about how we can fund your business, get in touch with us now.
In simple terms, if your capital is tied up in long-term contracts, revenue based financing gives you an advance on these funds.
Revenue based financing works by releasing liquidity from your company’s recurring revenue, both contracted and non-contracted. Contracted revenue is recurring income with a formal agreement in place, such as a management contract for a building, while non-contracted revenue includes income from sources like e-commerce.
You can use the funding to cover operating expenses, deliver new contracts, or expand your business. If you have capital tied up in future subscriptions – for example, in platforms like Shopify or Stripe – revenue based financing offers the funding you need to continue growing your business.
Your projected cash flow determines your funding level, so the amount you can use is based on your monthly revenue streams. This offers you more flexibility than small business loans from traditional lenders (such as banks), which can be challenging to adjust.
Revenue based financing is well-suited to SMEs that:
Revenue based financing is great in situations where:
If your company doesn’t have tangible assets but does have customers and recurring revenue, revenue based financing could be an excellent option for your business. Revenue based finance works particularly well for subscription-based businesses or SaaS companies.
For an in-depth look at this funding method and eligibility, see our article: Revenue based financing: What it is and how to get started.
Financefair is the only provider of revenue based financing in Ireland.
With P2P business lending, businesses get loans from investors or other businesses instead of traditional financial institutions like banks. P2P platforms check the creditworthiness of potential borrowers by looking at their financial statements, business plan, and credit scores.
It’s often easier and quicker for borrowing businesses to apply for P2P lending than a traditional bank loan. You can access funds for various reasons, like business opportunities and managing cash flow.
P2P lending isn’t without its disadvantages. You get a fixed amount of funding, as with a small business loan from your bank. That’s in contrast to other alternative loan options, such as revenue based finance, which gives you access to future recurring revenues in your business each month. This funding can increase as your business grows.
There are a few options for P2P lenders in Ireland. The best-known provider is Linked Finance, who offer loans ranging from €10,000 to €500,000 with terms of up to 5 years.¹
Invoice discounting – also known as invoice financing – allows you to unlock liquidity in your business by leveraging your customer book. This means you can use the contracts you already have to fund new ones, providing quick access to cash without the extended commitment of a term loan.
There are two types of invoice discounting:
Depending on the provider you choose, you may then have the choice of:
Invoice factoring is a form of disclosed invoice finance in which the provider essentially takes over the borrowing company’s credit control, which is less risky for the provider.
This is how invoice discounting works:
To read more about this type of funding, see our article: Invoice discounting: How to get started.
The following providers offer invoice discounting in Ireland:
These providers may offer disclosed and undisclosed invoice discounting depending on your company’s perceived risk. While banks generally offer disclosed facilities, Financefair always provides undisclosed invoice financing, so your customers are unaware you’re funding your business with invoice discounting.
A business line of credit operates similarly to a digital overdraft, providing businesses with funding of €10,000 to €250,000 a year. This funding solution ensures capital is available when you need it, and you’ll only pay interest on what you use.
When you need access to the funds, you send a request to your provider, who transfers it into your business bank account.
The key benefits of a line of credit include being able to:
Line of credit facilities for businesses are rare in Ireland. AIB is the only bank offering their customers a line of credit.⁶ Financefair is the only provider offering a standalone facility, and it won’t impact any current financing you have with your business bank.
A line of credit is our quickest funding option to set up. Within 24 hours of setting you up on the platform, your funding will be ready for you to draw down.
Our application process is simple. Here’s a quick guide to getting started:
Established in 2015 by finance and accounting professionals in Ireland, Financefair (formerly InvoiceFair) are dedicated to providing Irish businesses with tailored working capital solutions for growth.
When you choose Financefair for your business funding, you can:
We know it’s vital for you to find out as quickly as possible if your business is eligible for funding – and if it is, how much is available. This is why we make sure that you’ll get your indicative offer within one business day. Once you’ve accepted and have been onboarded onto the platform, you’ll be able to access your funding within 24 hours.
We combine a team with decades of experience in financial services with data analytics to assess, approve, and monitor risk: giving you a speedy decision.
We don’t just set up your funding facility and leave you to it – we’re always available to help you assess your business needs. Together we’ll consider your current requirements, as well as where you want to take your business in the long term. We also know how important flexibility is, so we make it easy to switch to another funding solution if your needs change in the future.
Here’s what else you should know about our financing products:
In this article, we’ve looked at some of the funding options that might be appropriate if you’re looking for alternative business loans, along with the providers who offer them.
There’s a funding solution to fit the requirements of most growing businesses, whether it’s a line of credit, revenue based finance, P2P lending, or invoice discounting.
To get started with Financefair funding, reach out to us today.