Business loans in Ireland: What are your options?

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Business loans in Ireland: How to get started

If you’ve been researching options for business loans in Ireland, you might relate to one or more of the following:

  • You need cash for your daily business needs, but you’re in an industry without tangible assets, or you have non-contracted revenue. This means it can be harder to get financing from traditional sources like banks.
  • You want to be able to adjust repayments if necessary, but this might not be possible when your only business funding comes from your bank. 
  • You need immediate access to cash. This is usually difficult if you’re relying on a bank for your funding, as they tend to move slower than alternative lenders.
  • Because you’re based in Ireland, you want a funder that understands your business and needs. You might be looking to expand, and want a funder that can cater to business expansion across geographies.

In this article, we’re going to detail your options if you’re looking for a business loan in Ireland, plus a couple of solutions that might work better for your business: revenue based finance and line of credit. 

We’ll cover:

If you’re ready to discuss the funding option that might work best for your business now, reach out to us to get started. 

Business loans in Ireland: What are your options?

If you’re searching for business loans in Ireland and trying to understand what options are available, you might have already tried talking to your bank to secure funding and are looking for alternatives.

In Ireland, the options available to you if you’re looking for business loans are: 

  • Banks: The loan options available include term loans, commercial loans for property plus the most popular and flexible option, the stocking loan. With a stocking loan, you just repay the interest each month, then pay the balance at the end (or sooner if you choose) with no penalty. The maximum term loan from a bank is usually 5-7 years. There are three main banks in Ireland where you can get a business loan:
    • Bank of Ireland: You can apply online for loans up to €120,000 and should hear back in 24 hours. You can borrow up to €120,000 on an unsecured loan. Loans over €120,000 take longer to arrange.1
    • AIB: You can download the application form available online for loans up to €300,000 and return it to your branch or relationship manager. Loans over €300,000 require a conversation with your relationship manager or branch.2
    • PTSB: You can download the application form online and take it to your local branch. Short and long-term loans, with terms of up to 10 years. Borrow limit and interest rates are not advertised on site.3
  • Peer-to-peer lenders: These lenders usually operate solely online for easier loan applications. The terms are similar to those of bank loans, but the main advantage is how quickly you can get access to funding – however, the interest rates are typically higher than banks. Rates from peer-to-peer lenders typically range from 6.95%-17.5%.
    • Linked Finance: Loans between €10,000 and €500,000 for up to 5 years. 4
    • Grid: Loans from €10,000 and €500,000. Short-medium term loans running up to 12 months. 5
    • Santiago: Loans from €10,000 to €500,000. 6
  • Financefair: An alternative lender founded in 2015 by industry experts to offer tailored working capital solutions to Irish businesses to allow them to grow faster. We help companies in Ireland with invoice finance, revenue based financing, and business line of credit facilities. Scroll down to learn more about how we work.

Here are the pros and cons of each option:

Provider Pros Cons
Banks
  • Simple to understand.
  • Cheaper than alternative lenders at around 8% interest.
  • Members of SBCI schemes so further discounts and funding are available.
  • Fixed cost and terms.
  • Variety of loan types (term, stocking, commercial, etc).
  • Service levels (wait times are often long).
  • Can be restrictive regarding additional funding.
  • Requirement for personal letters of guarantee.
Peer-to-peer lenders
  • Operate predominantly online for quick initiation.
  • Speedy process; sometimes operational within 24 hours.
  • Reassessment considers track record.
  • May cost more than banks.
  • Tend to require personal guarantees.
  • Loans impact balance sheets and potential future financing.
Financefair
  • Flexible financing solutions (revenue-based, invoice discounting, business line of credit).
  • Adaptable financing options aligned with business growth.
  • Quick online application process with a 24-hour decision.
  • No personal guarantees.
  • Revolving funding for continuous capital access.
  • Capital access without impacting balance sheet adversely.
  • Designed for follow-on funding.
  • Access to funding despite not having blue-chip debtors.
  • Possible to have a funding line alongside a bank loan.
  • Higher interest rates compared to banks.
  • Selective eligibility criteria based on company structure, trading tenure, and minimum annual turnover.

Business loan alternatives: Revenue based financing and line of credit

Standard business loans can work well for businesses, but certain business loan alternatives could work even better depending on your funding needs: revenue based financing and business line of credit. 

Here’s how they work, and how they could help your business grow:

Revenue based financing: How it can fund your business

Revenue based finance (RBF) is a way of accessing the untapped source of capital in the future contracted and non-contracted revenue in your business. A provider of RBF gives your revenue a value, which is converted to a working capital funding line you can use to scale your business.

RBF is ideal for subscription-based or SaaS businesses – or any businesses that have customers and recurring contracted and non-contracted revenue but don’t have tangible assets.

If you wanted to apply for financing from your bank, for example, you’d usually give them your projections and get a short-term loan based on their assessment. You might then want to renegotiate lower repayment loan terms if your business doesn’t perform as forecasted. Alternatively, you might want to extend the facility to take advantage of business growth opportunities. But that’s not always possible with a bank loan. 

In contrast, revenue based finance is based on your future cash flow. It’s connected to the ebb and flow of your business revenue, which means your repayments can decrease or increase depending on your revenue. This isn’t possible with other funding options, like a short-term loan, for example, which is a fixed amount with fixed repayments

How does RBF work in practice at Financefair? We start by looking at your projected income for the next 12 months. Based on those figures, we can offer you up to 70% of your next three months’ revenue or up to 20% of your Annual Recurring Revenue (ARR). We can then advance the funds on a quarterly or monthly basis, and adjust the funding based on how much your revenue grows.

Check out our guide to learn more about revenue-based financing and how it works.

RBF could be an ideal solution for your business if:

  • You have predictable recurring revenue, even if you don’t have blue-chip debtors.
  • You’re looking ahead to scaling/growing.
  • You’re looking to manage your working capital more efficiently, instead of operating month to month.
  • You have a pipeline with ongoing contracts, a couple more about to start, and others you want to tender for: but you know you’ll need extra cash to deliver on those contracts. 
  • You might be thinking about raising equity in the future. There’s no need to give away equity if you use revenue based financing, but this type of financing can also be used alongside VCs, private equity and other types of investors.

Find out how Zeus Scooters used RBF to leverage up to 70% of their future ARR to buy scooters, allowing them to expand into new territories and grow their business: Zeus Scooters

Line of credit: how it can fund your business

A line of credit (LoC) is a type of working capital loan that gives the flexibility of an overdraft. With a line of credit, you can draw down instant working capital when you need it. 

Key events in the business might prompt you to use funding from a line of credit. LoC is useful if you want to make the most of an opportunity for your business but need additional funding quickly to do so. An example might be needing to place a bigger-than-average bulk order of stock so you can fulfil a new contract or get a discount.

Why choose a line of credit over a traditional bank overdraft? Line of credit providers can usually offer businesses more funding than a traditional bank. At Financefair, for example, we can offer up to €250,000 per 12 months. 

LoC facilities are also much more flexible than bank overdrafts. If you have an overdraft or short-term loan with a bank, you’d need to fill out a new application if you wanted to extend your funding. With a LoC, it’s easier to arrange an extension to access more funds. 

Accessing the funds from a line of credit is straightforward once your facility is in place. You don’t have to divert the payments from your customers to a separate bank account as you would if you were funding your business with invoice financing. Once you’re ready to draw down, the funding comes straight into your bank account as a bank transfer.

Line of credit could be a good fit for your business if:

  • You need access to cash quickly for a business milestone or large project.
  • You want a flexible funding option.
  • You don’t want to use invoice financing methods such as purchase order finance or trade credit, as you don’t want to reroute your incoming payments to a separate bank account.
  • You need the funding immediately and can’t wait for weeks or months for a decision on a small business loan. 

Want to know more about line of credit? Explore how a solar panel company used a business line of credit to grow their business.

Why choose Financefair for your business funding?

When you choose to work with Financefair for your business funding, you’ll get:

A decision on your application in 24 hours

Our experienced team and efficient technology enable us to give you a decision on your funding application within 24 hours. 

Here’s the timeline:

Firstly, fill out the application form. You’ll hear back from us within 24 hours. 

  • For LoC, we can present our proposal within 24 hours. 
  • With RBF, we’ll need to collect information on cash flow projections, to complete  a proposal. 

We’ll onboard you to our platform, where your funding will be available to access in 24 hours.

We’re able to arrange your business finance quickly because our technology and data analytics give us an accurate understanding of your circumstances and funding requirements. This makes for a speedy decision. 

As well as that, our team has decades of financial services experience. We spend the time with you to make sure we understand your business needs, meaning we can evaluate and approve applications effectively

Grow your business with well-established and frictionless funding options 

When you first reach out to us, we’ll have a discussion about which funding solution works best for you.

For example, experience has taught us that e-commerce businesses usually grow more efficiently and effectively using Revenue Based Finance (RBF) than short-term business loans. This is because RBF makes it easier for businesses to quickly access funds to take advantage of the opportunities that come their way. With a business loan, requesting more funds is usually not a quick process. 

Here’s what else you should know about our financing products:

  • Browse a range of flexible products to find something that works well for you. There’s a bespoke element to how our solutions can be applied based on your company’s revenue generation model. We can work with you to determine if a line of credit, revenue based financing, or invoice finance would be most appropriate for your business plans.
  • We offer flexible funding limits: As your business grows, your funding limits can too. Working capital ebbs and flows, so if you have RBF and don’t take as much revenue as you expected, we can discuss reducing your funding instead of stopping it altogether.
  • We don’t need a personal guarantee from the business owner. This means your personal assets, such as your home, aren’t at risk.  
  • Our pricing has no hidden fees or costs. We are committed to transparency so as to eliminate the frustrations that come with complicated pricing structures. 
  • You don’t need to have blue-chip debtors to work with us: Businesses with a recurring revenue or subscription model aren’t always able to find funding from traditional sources like banks, but RBF allows us to fund businesses that operate in this way.

Financefair pricing: how it works

Our pricing structure is transparent, which means you won’t get hit with any hidden costs. Your fee is determined at the outset when we make our indicative offer to you, and it will be based on:

  • Your company
  • Average debtor days
  • Average debtor book
  • Turnover
  • Funding limit
  • Credit score

Three fees apply:

  • An annual platform or facility fee: This fee is fixed and is charged on the facility limit provided.
  • A discount or interest charge: This varies depending on your credit score. The higher your credit score, the higher the discount (and therefore the lower your fee will be). The fee applies to the amount of funding used in any 30-day period.
  • A transaction fee or monthly service fee: This is a percentage of the facility approved.

The all-in cost of funding with us typically ranges from 0.75% to 1.50% per 30 days. This depends on several factors including the product type, term, and credit quality.

To check how much RBF could cost depending on your Annual Recurring Revenue, try the calculator on our revenue based financing page

How to get started with Financefair

Getting started with Financefair is simple:

1.Apply: There are two ways to get started:

a. Contact us directly. We’ll have a chat about your funding requirements and let you know if we’re able to offer a suitable funding solution for your business. Call +35315252486, email busdev@financefair.com, or book an appointment with a team member.
b. Complete a funding application form

2.Discovery call: This lets us understand:

a. Your debtors and revenue streams
b. Your business model and pipeline
c. Your existing debt, if you have any

3. Offer: We’ll present a proposal. This will happen within 24 hours if you’re applying for LoC or after we receive your cash flow projections if you’re applying for RBF.

4.Onboard: After you accept our offer, our team will onboard you onto the platform and run the KYC and AML identity checks.

5. Funding: When you’ve been onboarded and your facility is set up, you’ll be able to access your funding within 24 hours.

For us to be able to fund your business, the following must apply:

  • Your business must be a limited company with at least two directors
  • You have been trading for at least one year
  • You have a minimum turnover of €1 million for RBF (or €250,000 for LoC)

Take back control of your cash flow and grow your business with Financefair

In this article, we’ve considered some of your options if you’re looking for a business loan in Ireland, and why revenue based financing or a line of credit facility could be a better option for your business.

If you appreciate transparency, flexibility and a straightforward approach to finance, and your business model means you’ve been unable to find suitable funding before, let’s talk about how we can help you. 

Reach out to us to get started. 

Sources

  1. https://businessbanking.bankofireland.com/credit/business-loans/business-loan/
  2. https://aib.ie/business/loans-and-finance/loans-up-to-60k
    https://aib.ie/business/loans-and-finance/loans-from-60001-300k
  3. https://www.ptsb.ie/business-banking/term-loans/
  4. https://www.linkedfinance.com/business-financing/
    https://www.linkedfinance.com/borrower-faqs/
  5. https://www.gridfinance.ie/short_term_loans
  6. https://santiagosme.ie/about/faq
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