Term loans: What you need to know, and the alternatives

Term loans are a popular option for businesses in Ireland. They’re easy to understand — you borrow a certain amount, at a fixed interest rate, for a set length of time. 

However, you might face the following problems:

  • Frustration at the inflexibility of loans and how long it takes to extend your funding if your business needs change.
  • Issues getting the funding amount you need from your business bank at an interest rate you’re happy with. 
  • Waiting weeks for a decision on a loan application and potentially missing growth opportunities. 
  • You need to know in advance if you can get the funding you need to fulfil a contract you want to tender for.

This article will look at the providers offering business term loans in Ireland. We’ll then consider three alternatives that could be better for your company’s situation and needs: revenue-based finance, invoice discounting, and line of credit facilities. 

We’ll cover:

Reach out to us to discuss how we can fund your company with solutions that are much more flexible than a term loan. 

Term loans in Ireland: What options are available?

Your options for term loans in Ireland include: 

  • Banks: Term loans are available from the three main banks in Ireland:
    • Bank of Ireland: For loans up to €120,000, you can apply online and should hear back within 24 business hours, while loans over €120,000 can take longer to arrange. You can borrow up to €120,000 with an unsecured loan, with terms of up to 7 years.1
    • AIB: For loans up to €300,000, download the online application form and return it to your branch or relationship manager. For loans over €300,000, you’ll need to speak directly to your branch or relationship manager.²
    • PTSB: Download the application form online and take it to your local branch. Both short- and long-term loans are available, with terms of up to 10 years.³
  • Peer-to-peer lenders: A term loan from a traditional bank involves borrowing from a single, regulated financial institution under standardised terms. A term loan from a P2P lender involves borrowing from multiple individual investors through an online platform, often with more flexible terms and eligibility criteria. Some SMEs are offered lower interest rates with peer-to-peer loans. A well-known lender in Ireland is Linked Finance, who offer loans from €10,000 to €500,000 (that last up to 5 years).⁴

Term loan alternatives

With term loans, you borrow a fixed amount and pay off the loan in monthly installments, plus interest, based on your agreed repayment schedule.

While this arrangement may be suitable for personal loans, it can limit business growth due to the difficulty in quickly adjusting funding. However, other well-established options offer greater flexibility and an approach to finance more tailored to your business.

Here are three of these solutions, all of which we offer at Financefair: 

Revenue-based finance

Revenue based finance is a funding method that offers an advance on funds tied up in your monthly recurring revenue. It takes your regular monthly earnings and turns them into a funding source that you can use to grow your business. It’s a good option for companies that don’t have physical assets but have recurring contracts or non-contracted revenue, like subscription-based or SaaS businesses.

The main advantage of revenue-based finance over a term loan is the flexibility. With a term loan, lowering your repayments can be difficult. This can be challenging if your business experiences a cash flow pinch. Likewise, if your business does better than expected, you might want to increase your funding to make the most of growth opportunities.

With revenue based finance, we base your funding amount on your future projections. We review your funding regularly, meaning your repayments can decrease or increase as appropriate. Unlike with a loan, where you have a set amount to repay with fixed payments, revenue based financing adjusts to the peaks and troughs of your company’s revenue.

Here’s how it works: 

  • We review your projected income for the next 12 months.
  • This allows us to offer you up to 20% of your Annual Recurring Revenue (ARR) or up to 70% of the next quarter’s revenue
  • We can provide the funds monthly or quarterly and adapt them to fit your revenue growth.

Here are some scenarios where revenue based finance can work well:

  • You don’t have blue-chip debtors, but your recurring revenue is stable.
  • You’re scaling your company.
  • You want to manage your working capital more effectively and stop operating month to month.
  • You have some contracts ongoing, but you want access to extra cash to tender for new contracts.
  • You’re considering raising equity in the future. Revenue based finance can also be used alongside VCs and other types of investors.

In Ireland, revenue based finance is only available from Financefair. To be eligible, your company needs:

  • To be a limited company with at least two directors
  • To have been trading for at least one year
  • A minimum turnover of €1 million

For more details, read our article: Revenue based financing: What it is and how to get started

Invoice discounting

Invoice discounting, also known as invoice financing, allows businesses to access cash by using their existing customer invoices to fund new contracts. It’s a convenient way to unlock funding without committing long-term to a loan.

There are two types of invoice discounting: selective and full book.

Selective invoice financing lets you choose which invoices to finance. This means you can select your largest, most significant invoices without raising invoices with much smaller sums. Selective can be a good option for smaller companies with only a few larger contracts (and many smaller ones). We are the only provider of selective invoice finance in Ireland.

With full book invoice discounting, you finance all of your invoices, which is slightly cheaper but can be more operationally intensive. Full book works well for businesses with larger teams and the resources to manage it.

Depending on the provider, you may be able to choose between disclosed (also known as non-confidential) or undisclosed (also known as confidential) invoice discounting. With a disclosed facility, your customers know you’re using invoice discounting. Invoice factoring is a common type of disclosed invoice finance where the funding provider effectively takes over your credit control. 

With undisclosed invoice financing, your customers won’t know you’re using invoice discounting. You’ll be in charge of sending invoices and collecting payments as usual.

Here’s how invoice discounting works:

  1. You create an invoice.
  2. The provider gives you a pre-agreed advance, usually a percentage of the total invoice value (for example, up to 90%).
  3. Your customer pays the invoice amount to an account managed by the provider. If the facility is undisclosed, your customer assumes they’re paying you, but if it’s disclosed, they’ll know they’re paying a third party.
  4. The provider then sends you the invoice balance minus any fees.

In Ireland, there are several providers offering invoice discounting:

  1. Financefair: Choose either selective or full book invoice discounting and get an advance of up to 90% of the invoice value. You can apply for and manage your facility online, and once it’s approved, we’ll deposit funds into your account within 24 hours. To estimate the cost of invoice discounting, try our calculator. Our eligibility criteria requires that you:  
    1. Are a limited company with at least two directors 
    2. Have a trading history of at least three years
    3. Have a minimum annual turnover of €3 million
    4. Maintain an average debtor book of at least €500,000
  2. AIB: Full book invoice discounting that you can manage online, with an advance of up to 85% of the invoice value.
  3. Bank of Ireland: Full book invoice discounting, typically for invoices that have been outstanding for up to 90 days. Provides an advance of up to 85% of the invoice value.⁶
  4. Close Brothers: Invoice factoring and full book invoice discounting, with an advance of up to 90% of the invoice value.
  5. Bibby: Invoice factoring and full book invoice discounting that you can manage online.

These providers may offer disclosed and undisclosed options based on your company’s perceived risk. Banks usually offer disclosed facilities, but all of Financefair’s invoice financing is undisclosed.

For more information about invoice discounting, read our article: Invoice discounting: How to get started

Line of credit

A line of credit is a type of financing that works similarly to a digital overdraft. It allows you to quickly access working capital whenever you need it, while only paying for what you use. 

A line of credit gives your business lots of flexibility. For instance, you might need to place a large order of stock to fulfil a new contract or to make the most of a bulk-order discount. Line of credit can help you make the most of these opportunities. 

Line of credit providers, like Financefair, can often offer businesses more funding than a traditional overdraft – up to €250,000 per 12-month period in our case. Additionally, these credit lines are more flexible than bank overdrafts. If you have a bank overdraft or loan, increasing your funding requires a new application, but with a line of credit, it’s easier to arrange a funding extension.

Once we’ve set your facility up, accessing the funds is simple. Unlike with invoice financing, you don’t need to redirect customer payments to a separate account. When you need to access funds, we’ll deposit them into your bank account via a bank transfer.

A line of credit might be the right choice for your business if you:

  • Need quick access to a flexible cashflow for a milestone or project.
  • Prefer a flexible funding option without a long-term commitment. 
  • Don’t want to divert incoming payments to another bank account.
  • Need funding fast and don’t have time to wait for the decision on a small business loan application.

AIB is currently the only Irish bank offering line of credit facility to current account customers. Financefair is the only provider offering it as a standalone option. To qualify for our line of credit facility, you must: 

  • Primarily operate as B2B.
  • Have a debtor book – but your clients don’t need to be blue chip.
  • Connect your financial software with our platform.
  • Fit the other rating criteria we look at. This includes your business credit score, history and creditworthiness, and business performance.

Why choose Financefair?

Established in 2015 by industry professionals, Financefair is an alternative lending platform that provides customised working capital solutions to Irish businesses. Previously known as InvoiceFair, our focus is offering businesses the funding they need to grow.

To do this, we offer business line of credit facilities, selective invoice finance, full book and selective invoice discounting, and revenue based financing

Here’s why you should consider working with Financefair to grow your business:

Get business funding plus the flexibility to switch solutions if you need to 

The financing we offer at Financefair offers more flexibility than a fixed-term loan: you’re not stuck waiting until your loan ends before you can apply for a higher (or lower) loan amount. Also, you can have a business finance solution with Financefair and a traditional loan from your business bank. 

When you reach out to us, we’ll assess your current funding needs and discuss where you see your business going in the long run. From there, we can determine which funding solution might be the best fit for you. 

Because we know how important flexibility is, we make switching to another funding solution easy if your needs change. As the only provider in Ireland that provides revenue based finance and a standalone line of credit, we can provide you with a wide range of options that other providers can’t – all on one easy-to-use platform. 

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

  • The business owner doesn’t have to give a personal guarantee: Term loans usually always require some kind of personal guarantee. Financefair never requires a personal guarantee: so your home and other personal assets aren’t at risk. 
  • Our pricing is transparent: No hidden fees will crop up later on. You’ll know from the outset exactly what the cost is. 
  • You don’t need blue-chip debtors to get funding from Financefair: If your business has a subscription or recurring revenue model, securing funding from a bank can be difficult. 

Find out in one business day if we can fund your business.

One of the problems with term loans is how long it can take to find out if the bank has accepted your application. We know how important it is to be able to move fast if a business opportunity comes your way. For that reason, we ensure your indicative offer is with you in one business day

If you decide to accept our offer, you’ll need to complete some paperwork, and we’ll then set you up on the Financefair platform. When that’s all sorted, you can access your funding within 24 hours. To ensure we can move quickly, we use a combination of data analytics and a knowledgeable team with decades of industry experience. 

Benefit from decades of financial services experience 

When your facility is up and running, we’ll still be on hand if you want to discuss your funding, particularly if things change and you think another solution may suit your business better. We’ll speak to you directly to make sure we have a good understanding of which funding solution might best suit which situation. 

For example, we’ve seen that e-commerce businesses wanting to scale can do so more effectively with revenue based finance. Because revenue based financing is a more flexible option, it allows businesses to get hold of the funds they need faster. This lets them move more quickly than they might be able to if they had a loan and needed to secure more funding. 

Scale your company with frictionless, flexible funding from Financefair

In this article, we’ve looked at the options for term loans in Ireland, along with some of the most popular banks and peer-to-peer providers. 

We’ve also pointed out the limitations of term loans: namely, the lack of flexibility and ability to adapt as your business grows.

At Financefair, we offer innovative, more flexible funding alternatives that can grow with your business: revenue based financing, line of credit, and invoice discounting. 

If one of those solutions sounds like it might work well for your company, get in touch with the team today to find out more. 

Sources

¹https://businessbanking.bankofireland.com/credit/business-loans/business-loan/
²https://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/
⁴https://www.linkedfinance.com/business-financing/
https://www.linkedfinance.com/borrower-faqs/
⁵https://aib.ie/business/loans-and-finance/finance/invoice-finance
https://businessbanking.bankofireland.com/credit/finance/invoice-finance/how-does-it-work/
https://www.closeinvoice.co.uk/invoice-discounting
⁸https://www.bibbyfinancialservices.com/funding/invoice-finance-products
https://www.bibbyfinancialservices.com/funding/invoice-finance-products/invoice-discounting

 

Alternative business loans: What are your options?

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: 

  • You can’t get the level of funding you need to grow from your business bank, or the interest rates are too high. 
  • You want to avoid being locked into a long-term, inflexible loan for several years, which can be hard to adjust as your needs change.
  • You don’t want to wait weeks for a decision on a loan application, and you want to know upfront if you need to provide a personal guarantee. 
  • It’s hard to find funding providers that cater to businesses in Ireland.

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. 

Revenue based finance: funding based on your recurring monthly revenue

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:

  • Have reliable recurring revenue
  • Don’t have blue-chip debtors
  • Have a subscription model or contracted revenue 
  • Are in a period of growth
  • Have a turnover of €1 million or more
  • Don’t want additional debt and don’t want to give away equity

Revenue based financing is great in situations where:

  • You want to grow your business, but you need an injection of capital– perhaps to hire skilled personnel for a contract, purchase a large amount of stock, or upgrade premises.
  • You’ve secured a contract with lengthy payment terms, such as a government contract. 
  • Your business has ongoing contracts, with others about to start and more you’d like to tender for.

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

Revenue based financing providers in Ireland

Financefair is the only provider of revenue based financing in Ireland. 

Peer-to-peer (P2P) lending: borrowing from other businesses and investors

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.

P2P lenders in Ireland 

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: use existing contracts to fund new ones

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: 

  • Full book: You finance all of your invoices.
  • Selective: You choose which of your invoices to finance.

Depending on the provider you choose, you may then have the choice of:

  • Undisclosed or confidential invoice discounting: Your customers are unaware it’s happening. You manage your invoices and the payments from your customers. Some prefer this type of invoice discounting, as it allows you to remain in control of your customer interactions.
  • Disclosed or non-confidential invoice discounting: Your customers know you’re using invoice discounting. The funding provider can impose this on a business if they feel the perceived risk is high enough. 

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:

  1. You generate an invoice.
  2. Provider sends the pre-agreed advance amount: This is a percentage of the total invoice value (for example, up to 90%).
  3. The customer pays the invoice amount into a separate account managed by the invoice discounting provider. If you have a disclosed facility, your customer will be aware of the provider’s involvement, but for undisclosed facilities, they’ll assume they’re paying you.
  4. Provider sends the remainder of the invoice minus any fees.

To read more about this type of funding, see our article: Invoice discounting: How to get started

Invoice discounting providers in Ireland

The following providers offer invoice discounting in Ireland:

  1. Financefair: Choose between selective or full book invoice discounting with an advance of up to 90% of the invoice value. You apply for and manage your facility online, and the funds will be in your account within 24 hours of approval. Financefair’s pricing model is transparent, featuring only three fees (you can find out more about these in the article above). Try our calculator to get an idea of the cost of invoice discounting.
  2. AIB: Provides full book invoice discounting, offering an advance of up to 85% of the invoice value. You can manage it online.²
  3. Bank of Ireland: Offers full book invoice discounting with an advance of up to 85% of the invoice value, typically for invoices that have been outstanding for up to 90 days.³
  4. Close Brothers: Provides full book invoice discounting and invoice factoring, offering an advance of up to 90% of invoice value.⁴
  5. Bibby: Offers full book invoice discounting and invoice factoring, with full online management of your facility.⁵

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.

Line of credit: draw down funds when you need them

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:

  • Effectively manage large payments for items such as inventory or staffing.
  • Work with providers other than your business bank, allowing you greater flexibility. This is also handy if you’ve not had your business bank account for very long, as banks often won’t fund businesses with new bank accounts.
  • Choose your repayment terms, whether that’s monthly or as a lump sum. After 12 months, you can opt to continue or close the facility.
  • Fund seasonal expenses that occur infrequently during the year.
  • Avoid diverting customer payments to a separate account – with a line of credit, the funds are deposited straight into your business bank account.

Line of credit providers in Ireland

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. 

How to get started with Financefair

Our application process is simple. Here’s a quick guide to getting started:

  1. Apply: Fill out an application form or get in touch with us to schedule a chat with one of our team.
  2. Connect: Integrate your banking and accounting software and share some essential documents with us: your latest statutory financial statement (such as your tax return), business forecasts, and tax clearance certificate.
  3. Offer: You’ll get an indicative offer within 24 hours.
  4. Onboard: If you’re happy with the offer, our team will guide you through the onboarding process for our platform.
  5. Formal offer: When your credit is approved, we’ll send your formal offer as well as:
    1. A DocuSign link for the debenture
    2. A link to set up an account with GoCardless, which is how we collect our fees
    3. Security documentation for Anti-Money Laundering (AML) and Know Your Customer (KYC) 
  6. Funding: Once we’ve set your facility up, you can access your funding within 24 hours.

Why choose Financefair for your business finance?

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.

We offer a range of funding options to support you, including revenue based financing, business line of credit facilities, invoice discounting, and selective invoice finance

When you choose Financefair for your business funding, you can:

Find out how much funding we can offer in one business day

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. 

Fund your business goals with frictionless, established solutions 

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:

  • Our funding limits are flexible: We know that you’ll probably need more funding as your business grows, but we also understand that working capital ebbs and flows. If you’re a revenue-based finance customer, this means that if you have a quieter month and take less revenue, we can reduce your funding rather than withdrawing it completely.
  • We never require personal guarantees: As a small business owner, you don’t want to put your home and personal assets at risk. As long as you meet our eligibility, we’ll never ask for a personal guarantee. 
  • Our pricing is transparent: No hidden fees will crop up later on – you’ll know from the outset exactly what the cost is. 
  • You don’t need blue chip debtors to get funding from Financefair: If your business has a subscription or recurring revenue model, it can be difficult to secure funding from a bank. Our alternative finance options, like revenue based financing, can grow your subscription or recurring revenue business.

Grow your business with funding from Financefair

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.

 

Sources:

¹https://www.linkedfinance.com/start-lending/
²https://aib.ie/business/loans-and-finance/finance/invoice-finance
³https://businessbanking.bankofireland.com/credit/finance/invoice-finance/features-and-benefits/
⁴https://www.closeinvoice.co.uk/
⁵https://www.bibbyfinancialservices.ie/
⁶https://aib.ie/business/loans-and-finance/finance/credit-line

Selective invoice discounting: How it works and how to get started

If you’re an SME looking for information on selective invoice discounting, you might have one or more of the following issues in mind:

  • You only want to finance a few of your largest invoices to help grow your business. You might have a lot of smaller contracts alongside a few larger ones, and don’t want the extra admin that comes with financing all your invoices.
  • You’re familiar with invoice discounting but you’ve heard about hidden fees. The fact that you might not know up front exactly what you’ll pay makes you reluctant to try it.
  • You’re looking for funding that’s quick and easy to set up and manage. 
  • You aren’t sure if invoice discounting is the right funding solution for your business needs –  but you do know you don’t want to commit to a longer-term solution like a business loan.

In this article, we’ll look at selective invoice discounting in detail, including:

If you already know you want to try selective invoice discounting with Financefair, reach out to us to get started. 

How selective invoice discounting works

Invoice discounting – also known as invoice financing – is a funding solution that’s widely available in Ireland. It allows you to use your sales ledger to get a cash advance on customer invoices. We’re the only invoice discounting provider in Ireland that can offer you a choice between:

  • Full book invoice discounting: You raise your entire sales ledger. This is more operationally intensive but costs slightly less than selective. 
  • Selective invoice discounting: You choose specific invoices to finance – you can raise your largest invoices and leave out smaller contracts. Selective invoice discounting might be ideal for you if a small proportion of your customers make up the largest portion of your revenue each month. In this situation, financing every invoice (including those that are for relatively small amounts) would be operationally intensive for a small business. 

Invoice discounting can also either be:

  • Disclosed: Your customers will know you are using invoice financing. A common form of disclosed invoice financing is ‘invoice factoring’.  This is where the lender takes on an operational role in the business, taking over credit control processes: this means your customers will pay their invoices to the invoice factoring company, and take care of any late payments or unpaid finances.
  • Undisclosed: Your customers won’t be aware you’re using invoice financing. All Financefair invoice discounting facilities are undisclosed. This is also known as confidential invoice financing. Selective invoice financing with Financefair is always undisclosed, offering complete discretion. 

With selective invoice financing, there’s no tie-in. Your facility is available for you to use when you need it, and you choose which invoices to finance and when to do it.

How much does selective invoice discounting cost? 

The cost of funding with Financefair typically ranges from 0.75% to 1.50% per 30 days, depending on the product type, term, credit quality, and several other factors. 

Selective invoice discounting typically costs slightly more than the full book option. When you apply for funding and get your offer from us, it will include the total cost. This comprises three fees: 

  • The annual platform fee: A fixed fee that’s charged on the total facility provided.
  • A transaction fee: This is a percentage of the receivable funded.
  • Discount charge: This is payable on the amount of funding used in a 30-day period and is linked to your credit score. The discount is greater the higher your credit score is. 

Here are some examples of what an ID facility with Financefair might cost, comparing selective with full book:

Amount advanced Cost per 30 days (selective) Cost per 30 days (full book)
€180,000 €2,250 €1,800
€450,000 €5,625 €4,500
€810,000 €10,125 €8,100

Use the calculator on our selective invoice discounting page to get an idea of how much it would cost for you.

How to get started with Financefair

We can finance individual invoices from €30,000 and provide up to €50m in annual funding if your company meets our criteria: 

  • You’re a limited company and have two or more directors
  • You’ve been in business for three years or more
  • Your minimum annual turnover is €3m
  • You have an average debtor book of at least €500,000

Getting started with Financefair selective invoice discounting is easy:

  1. Apply: To get started with us, you can:
    1. Get in touch with us directly to discuss your funding requirements. Call +35315252486, email busdev@financefair.com, or book an appointment with us, and we’ll tell you if we can offer funding to your company.
    2. Complete a funding application form, which just takes a few minutes.
  2. Offer: You’ll get an indicative offer in one business day.
  3. Onboard: The next step is to run the required KYC and AML identity checks and onboard you onto the platform, which the team will help with. 
  4. Funding: When your facility is open, upload your invoices onto our platform. Once they’re verified, we’ll advance up to 90% of the value of the invoice to your bank account within 24 hours.

Why choose Financefair for selective invoice discounting?

Founded in 2015 by a team of accounting and finance professionals, Financefair (initially called InvoiceFair) provides flexible tailored working capital solutions that help ambitious businesses grow faster. 

This includes funding options like revenue based financing, line of credit, and both full book and selective invoice discounting – and we’re the only provider of selective invoice discounting in Ireland. 

So why should you choose Financefair to grow your business?

Save time on admin and get flexible, hassle-free funding

Many invoice discounting companies need you to upload information to your account daily at a particular time, plus your bank statements each week. This creates a lot of admin that can be a drain on resources. 

With Financefair, the technology in our platform means there’s no need to upload information manually – we can fund your account automatically. This saves you and your team time and energy that can be better spent growing the business.

Access different kinds of growth funding through our platform

As part of the application and onboarding process, we’ll speak with you to understand your business, immediate needs, and future growth plans. We’ll also use data analytics to get an accurate understanding of your circumstances and funding requirements. 

The support doesn’t end once your initial funding is approved and your facility is set up. Going forward, we’ll work together to review your funding regularly, using our industry knowledge and decades of financial services experience to make sure you have the best finance solution for your business needs. 

As well as selective invoice discounting, we also offer other business finance products – all of which are off balance sheet and require no personal guarantee. These include:

  • Revenue based finance: Use up to 20% of your future annual recurring revenue for access to upfront capital. 
  • Line of credit: Like an online overdraft that isn’t attached to a bank account, a line of credit lets you access up to €250,000 instant working capital when you need it.

You also have the option of starting with selective invoice discounting and moving to full book if it would work better for you. 

We know it can be tricky to get funding from banks if you have a subscription or recurring revenue model, as they often only want to fund businesses with blue-chip debtors. But as long as you meet our eligibility criteria, we can finance these different business models. 

How selective invoice financing closed a cash flow gap in a multi-million euro contract

Meritcom, a leading data and telecommunication services provider, has operated for over 20 years. 

The company won a multi-million euro contract with a social media company to provide sub-contracting services for a large-scale data centre project in Denmark. Meritcom was to provide highly skilled workers for services such as power and electrical works during the build phase of the data centre site expansion. 

As the project ramped up, the labour requirement increased, along with the working capital requirements. The repayments from the primary contractor were on a 30-day payment term cycle, but Meritcom paid their staff weekly, which created a cash flow gap.

Meritcom needed a cash flow strategy that would cover the initial set-up costs of the project before they received any payments from the primary contractor. We took our time to understand the business’s working capital needs and ultimately suggested selective invoice financing. 

This solution allowed Meritcom to leverage 70% of the purchase order in the initial set-up phase to assist with the capital costs at the start of the project and 90% of completed worksheets to provide working capital as the project moved through the design and build phases.

Find out more in our case study on Meritcom.

Decide what invoices to fund and when with Financefair selective invoice discounting

In this article, we’ve taken a deep dive into selective invoice discounting, looking at how it works and how you can get started with us at Financefair, the only finance provider of selective invoice discounting in Ireland. 

We’ve also seen how selective invoice discounting was the ideal solution to close a cash flow gap in a big contract, where there was the need for an initial outlay to get set up before any payments came in, plus weekly payments to workers going forward. 

If you could benefit from the option to finance some of your invoices as and when you need to, reach out to us today to get started.

No personal guarantee business loans: What you need to know

If you’re looking for no personal guarantee business loans, you might relate to the following difficulties: 

  • While personal guarantees are standard in business financing, it means your personal assets – like your home – are on the line. You might have had a bad experience with personal guarantees in the past.
  • You likely want to know if you’ll require a personal guarantee upfront, instead of going through a loan application first.
  • There aren’t many lenders that offer loans without a personal guarantee in Ireland. 
  • You might want to tender for a new contract, but you need to know you have the funding available to deliver. Ideally, you want a business loan that doesn’t require a personal guarantee and will still give you enough funding. 
  • You want to avoid getting locked into a traditional bank loan that may not suit your business in a few months.

This article will look at what a no personal guarantee business loan is, plus some alternatives that might work better for your business. We’ll cover:

To speak to the team about our funding options – all of which don’t require a personal guaranteereach out to us today. 

How to get a no personal guarantee business loan

A no personal guarantee loan means you don’t need to use any personal assets such as your home or car as collateral. 

Personal guarantees are often the standard in business financing, so finding an appropriate loan option can be difficult – especially if you’re a new business or a start-up.

If a lender does offer you a loan without a personal guarantee, they might offer you a smaller amount of funding than you’d like and potentially higher interest rates. This is because the lender’s perceived risk is higher as they don’t have any of your assets as security.

However, this type of loan agreement can have a serious impact on a small business owner’s life. When you use your own assets as collateral for a loan agreement, you’re introducing something personal into your business life. This means that if you’re unable to repay the loan, your personal items and relationships – which ought to be separate from your business assets – are impacted. 

If you’re researching this topic, you might have already tried talking to your bank to see if you’re eligible for a no personal guarantee business loan. If you were, chances are you would have been offered less financing than you’d like. Frustratingly, it can be difficult to tell if you’ll be required to give a personal guarantee before you go through the application process.

At Financefair, we don’t offer traditional business loans, but we do offer several finance options that may be a better fit for your business. We’ve included information on those solutions in this table, alongside the main providers of secured and unsecured business loans in Ireland: 

Financefair Bank of Ireland¹ AIB² PTSB³ Linked Finance Grid Santiago
Personal guarantee required? No May be required No information on website No information on website Yes No information on website No information on website
Minimum finance amount €50,000 for line of credit and selective invoice financing €1,000 No information on website  €5,000 €10,000 €10,000 €10,000
Maximum finance amount €1,000,000 for revenue based finance and invoice discounting For loans over €120,000, speak to your relationship manager For loans over €300,000, speak to your relationship manager No information on website €500,000 €500,000 €500,000
Terms Flexible: depends on funding solution.  Unsecured loan terms of up to 7 years, secured loan terms not on website No information on website Up to 10 years Up to 5 years Up to 12 months No information on website
Can you apply online? Yes You can apply online for loans up to €120,000 Download the application form available online for loans up to €300,000 and return it to your branch or relationship manager No, call or go into your local branch Yes Yes Yes

Alternatives to no personal guarantee business loans

A no personal guarantee business loan is a good option for you if you want a term loan with consistent repaymentswithout putting your personal assets on the line. It also keeps your business credit history separate. If your business defaults, your personal credit score and creditworthiness won’t be damaged.

But there are also other financing alternatives that also don’t require a personal guarantee.

Here are three no personal guarantee financing options

1. Revenue based financing

Revenue based financing allows you to use your company’s existing recurring revenue – both contracted and non-contracted – to release working capital. Revenue based finance often doesn’t require a personal guarantee because it’s a more innovative type of funding than a typical small business loan. At Financefair, we never ask for a personal guarantee or a guarantor.  

With revenue based finance, you can get an advance on a percentage of the funds associated with subscriptions and long-term contracts. You’re then able to use that capital as you see fit – whether that’s fulfilling a new contract, growing your company, or paying day-to-day expenses. We’ll convert up to 20% of your annual recurring revenue into growth capital. 

Your funding amount is directly related to your cash flow projections and monthly revenue, which means it can grow as your business grows. Compared to a standard business loan, it’s much more flexible as the loan amount isn’t fixed. 

This type of financing is a great option for companies that have recurring revenue but no tangible assets, such as those with a subscription business model. It’s also a good option for those who want to be able to adjust their funding as their annual revenue grows. 

This is what Zeus Scooters did, using revenue based finance through Financefair to buy the scooters needed to expand into new territories. Read more in our case study on Zeus Scooters.

For more about how this type of funding works, see our article: Revenue based financing: What it is and how to get started.

2. Line of credit

A business line of credit is very similar to an overdraft. There are two providers in Ireland: AIB and Financefair. AIB can offer a credit line to customers with a business account, but they state on their website that they may need security (such as a personal guarantee).

Financefair is the only provider in Ireland that can offer a standalone line of credit without a personal guarantee

When you have a line of credit, the funds are available to draw down when you need them. All you need to do is request funds, and your provider will send the money directly to your business bank account

With a line of credit, you can:

  • Easily pay off seasonal business expenses that you might not have the money for, or payments for labour costs or stock that are larger than average
  • Work with other providers besides your business bank, as you’d have to with an overdraft. This is helpful if you haven’t had your business bank account for long, as many banks require a certain amount of time between opening your account and requesting financing. 
  • Set your own terms for drawing down and repaying the funds – as a lump sum or monthly. 
  • Review your line of credit after the initial 12 months are up. You might choose to close the facility or leave it open to cover any unexpected expenses. 

For more in-depth information on credit lines, see our article: Online business line of credit: Everything you need to know to get started

3. Invoice discounting

With invoice discounting, you’ll get an advance on your invoices to turn your existing contracts into working capital to finance new projects. Depending on which provider you choose, it’s possible to get invoice discounting without a personal guarantee. However, providers don’t state on their website that they require a personal guarantee: you might not know until you apply. 

Also known as invoice financing, this type of funding is a good option if you’re looking for quick access to cash without committing to a longer-term business loan. 

There are three types of invoice discounting:

  • Full book: You finance up to 90% of the value of all your invoices. 
  • Selective: You finance up to 90% of the value of some of your invoices, usually your largest contracts.
  • Invoice factoring: With this kind of invoice discounting, you finance all your invoices, but the lender takes over credit control for you. 

Invoice discounting facilities are either:

  • Disclosed: This means your customers are aware you’re using invoice discounting. Invoice factoring is always disclosed. 
  • Undisclosed: Your customers remain unaware. This is the type of invoice discounting that Financefair offers.  

We recently worked with energy solutions provider Work Work, and provided them with a  used selective invoice financing facility. They had to fund weekly stock purchases and labour costs, but their invoice payment terms were for 60 days. 

By using selective invoice financing, Work Work was able to get an advance on 90% of the invoice amount on selected invoices. This meant that the company could continue to grow without having to wait for the invoice to be paid. 

For more information on invoice financing and how it might be a good option for your business, read our article: Invoice discounting: How to get started

Why choose Financefair for your business financing?

Financefair, founded in 2015 as InvoiceFair, provides innovative funding solutions to growing businesses. We offer revenue based finance, online business line of credit, and both full book and selective invoice discounting. 

We’re the only provider in Ireland that can offer a standalone line of credit and selective invoice discounting.

Here are a few reasons to work with Financefair: 

Get business funding without a personal guarantee

At Financefair, we don’t require a personal guarantee from the business owner for any of our funding solutions. This is because we base our decisions on real-time accounting and banking data and take the time to speak with you to fully understand your business needs and growth plans. This gives us the information we need to understand the potential risk.  

Because we can offer a variety of finance products, it’s easier for us to find a solution that’s a good fit for your company’s needs, and we’ll work with you and your finances to do that. We’ll also review your needs regularly to ensure you’ve got the best business financing solution for your needs. Once you get started with Financefair, it’s easy to adjust your funding as your business evolves. 

Here are some other important details to know about our products:

  • Our funding limits are flexible: As your business grows, so can your funding limits. We know working capital isn’t static, and it can ebb and flow. If your revenue is lower than expected one month, we can discuss reducing your funding – rather than stopping it altogether. 
  • Our pricing is transparent: You’ll know up front exactly what you’ll pay when you choose Financefair funding, as we have no hidden fees or costs.
  • You don’t have to have blue chip debtors to work with us: It’s sometimes a struggle for small business owners with a subscription or recurring revenue model to find funding from banks. But because we offer revenue based finance, we can help companies with these business models. 

Get an indicative offer in one business day

When you apply for funding, you want to know as soon as possible if you’ve been approved, and if you can get the amount you need. Assuming you meet our eligibility criteria, we can give you an indicative offer in one business day

When you accept our offer and send us the documentation we need, we’ll work with you to set you up on our platform as soon as possible. When the application and onboarding process is complete, we’ll set up your facility within 24 hours so you can access your funding.

We can do this thanks to the decades of financial services experience our team has. Combining this with the data analytics in our platform, we’re able to accurately assess and monitor risk. This means we can move quickly and get you the decision you need. 

Finance your business without the need for a personal guarantee

In this article we’ve taken a look at what a no personal guarantee business loan is, along with some other more flexible alternatives that might work better depending on your situation and type of business– revenue based finance, line of credit and invoice discounting.

If you’re ready to discuss your funding needs with our experienced team, get in touch with us today to start the conversation. 

Sources

¹https://businessbanking.bankofireland.com/credit/business-loans/business-loan/ 

²https://aib.ie/business/loans-and-finance/loans-up-to-60k and https://aib.ie/business/loans-and-finance/loans-from-60001-300k

³ https://www.ptsb.ie/business-banking/term-loans/

https://www.linkedfinance.com/business-financing/ and https://www.linkedfinance.com/borrower-faqs/

https://www.gridfinance.ie/short_term_loans and https://www.gridfinance.ie/help_centre/faqs

⁷https://santiagosme.ie/about/faq

Invoice finance providers: which one is right for you?

If you’re researching invoice finance providers, you might relate to one of these struggles:

  • You aren’t sure if invoice finance is the right solution for you, and you want to know more about what the different providers can offer.
  • You’re interested in trying invoice finance, but the offered advance rate was lower than you’d like, so you want an easy way to compare providers.
  • You’ve heard about hidden costs with invoice finance, and want to pick an invoice finance provider that is transparent about their fees. 
  • You’re hesitant to dive into full-book invoice financing – you want to see what else might be a better fit. 

In this article, we’ll compare five of Ireland’s top invoice finance providers. We’ll also look at the eligibility criteria for these providers, plus the businesses they might suit best.

We’ll cover:

Note: To find out how invoice financing could help grow your business, reach out to us

What are the top invoice finance providers in Ireland? 

Invoice financing, also known as invoice discounting, is a type of business finance that lets you use your existing contracts as general working capital by getting an advance on your unpaid invoices.

These invoices might have payment terms of 30-60-90 days. Instead of waiting for your agreed payment term, invoice financing allows you to get paid for up to 90% of these outstanding invoices in 24 hours. This unlocks the liquidity in your business, and gives you near-immediate access to a cash flow that can help grow your business. 

There are three types of invoice financing:

  • Full book: You use all of your invoices to raise working capital. 
  • Selective: You only raise certain invoices (your largest contracts).
  • Invoice factoring: The finance partner essentially takes over credit control, and manages payments of invoices.

The financing will either be: 

  • Disclosed: Your customers will know you are using invoice financing.
  • Undisclosed: Your customers won’t be aware of your invoice financing activity. 

For more in-depth information about how invoice financing works, see our article: Invoice discounting: How to get started.

Here’s a comparison of the top invoice finance providers in Ireland: 

Financefair AIB¹ Bank of Ireland² Bibby³ Close Brothers⁴
Products offered Full book and selective invoice financing Full book invoice financing Full book invoice financing Full book invoice financing and invoice factoring Full book invoice financing and invoice factoring
Maximum advance rate 90% of the invoice value 85% of the invoice value 85% of the invoice value  100% of the invoice value 90% of the invoice value 
Is the facility disclosed or undisclosed? Undisclosed Could be either, but more likely to be disclosed Could be either, but more likely to be disclosed Invoice finance is undisclosed, invoice factoring is disclosed Invoice finance is undisclosed, invoice factoring is disclosed
Cost per 30 days 0.75% to 1.50% Exact figure not stated on website Exact figure not stated on website  Exact figure not stated on website Exact figure not stated on website. Fees relating to your account are disclosed when your facility is arranged
Maximum facility size €1,000,000 Not stated on website Not stated on website Not stated on website Not stated on website
How quickly can you access funding? When your facility is in place, funding will be in your bank account within 24 hours Instant access to the agreed advance amount for new invoices Instant access to the agreed advance amount for new invoices When your facility is in place, funding will be in your bank account within 24 hours Instant access to the agreed advance amount for new invoices
Can you apply and manage your facility online? Yes, the entire process is online Can manage it online but you’ll need to apply in branch or with your Relationship Manager. You can email to get started Can manage it online but you’ll need to apply in branch or with your Relationship Manager. You can email to get started Yes Yes
Is a personal guarantee required? No Not stated on website  Not stated on website Not stated on website Not stated on website
Who qualifies?
  • Limited company with at least two directors
  • Trading for at least three years
  • Minimum annual turnover is €3m
  • Average debtor book is at least €500,000
  • Have an average on-going funding requirement of at least €150,000
  • Sell goods or services on credit to other businesses
  • Your ongoing trade debtor’s ledger is a minimum of €250,000
  • Invoice after goods and services are delivered
  • Have a satisfactory quality and spread of debtors
  • Use a sales ledger accounting system and appropriate credit control procedures
  • Sell on credit to business customers
  • Have a good spread of debtors
  • Growth potential
  • Good credit control
  • Provide goods and/or services to other businesses
  • Issue your customers with credit terms of between 30 and 90 days
  • Have strong credit management and control reporting tools
  • Can demonstrate a capable management team
  • Have been financially viable for a minimum of six months
  • Invoices are business to business
  • Minimum annual turnover is £750k
  • You want to finance all of your invoices, not just a few

 

Why choose Financefair as your invoice financing?

Financefair has provided Irish businesses with the working capital solutions they need to grow since 2015. In addition to invoice financing, we offer revenue-based financing and line of credit

Here’s what it means when you choose Financefair for your invoice financing: 

You can choose to fund just one invoice if you prefer 

When you choose Financefair for invoice financing, you have the option of either selective or full book. Selective invoice discounting allows you to get an advance on a select number of invoices, rather than your whole debtor book. This allows you to test invoice financing before making a large commitment. We are the only provider of selective invoice financing in Ireland.

Selective invoice financing could be right for your business if:

  • You’re a small business, and don’t have the operational resources to raise all of your invoices for invoice financing.
  • You have a few larger contracts and many small ones. The smaller invoices might not make a difference to growing your business.

Full book invoice financing might be a better option if: 

  • You’re a larger business with many significant invoices, and you want to finance all of them. 
  • You have a larger team and have the operational resources to manage full book. 

For an example of how selective invoicing helped a business grow, see our case study on how a company used their approved worksheets to expand in Europe.

You won’t find our fees confusing

Our pricing structure is simple. You’ll pay three fees:

  1. An annual platform or facility fee: This fee is fixed and we’ll charge you based on the facility limit provided.
  2. A discount or interest charge: This fee relates to how much funding you use in any 30-day period and depends on your credit score. The higher your credit score is, the lower your interest rate.
  3. A transaction fee or monthly service fee: This is a percentage of the overall invoice finance facility approved.

Our all-in cost of funding through our platform typically ranges from 0.75% to 1.50% per 30 days, depending on the product type, term and credit quality. 

To get an idea of how much an invoice finance facility would cost your business, try our calculators for full book invoice discounting and selective invoice finance

Who is Financefair good for?

Financefair is good for businesses who want:

  • An undisclosed facility: You manage your own invoices, and your customer won’t know you’re using an invoice financing company. Many SMEs prefer this approach, as it allows you to remain discreet..
  • To apply for and manage their facility online: You can apply to Financefair entirely online. Our platform means you can manage your facility online and upload your invoices directly.
  • The option to swap to a different form of financing: We want to see your company succeed and grow. As your business grows, we can help ensure you’re using the right financing option for your business needs – whether that’s invoice financing, revenue based financing, or line of credit. Once you’re part of our community, swapping products is simple.
  • Flexible funding limits: We know working capital can ebb and flow. For example, say you were using our revenue based financing facility. If you had a quieter quarter than expected with less revenue coming in, we can discuss reducing your funding rather than stopping it completely.
  • Funding with no personal guarantee: This means you don’t need to put your personal assets, like your home, at risk.
  • Funding without having blue-chip debtors: If you have a subscription or recurring revenue model, it can be tricky to get a business loan from the bank, which often only fund businesses with blue-chip debtors. Financefair can fund different business models, including a subscription-based model, using facilities such as revenue based financing

How to start financing your invoices with Financefair

To be eligible for Financefair invoice financing, you must:

  • Be a limited company with at least two directors
  • Have been trading for at least three years
  • Turnover at least €3m annually 
  • Have an average debtor book of at least €500,000

We can finance single invoices from €30,000 and provide up to €50m in annual funding if your company meets our criteria. It’s easy to get started:

  1. Apply: To apply for funding you can:
    a. Contact us directly to discuss your requirements with one of our team, who can quickly let you know if we can fund your business. Call +35315252486, email busdev@financefair.com, or book an appointment with us.
    b. Complete a funding application form. Submit it online, and our team will get in touch with you ASAP. 
  2. Offer: Within 24 hours of getting in touch, you’ll get an indicative offer.
  3. Onboard: If you accept our offer, we’ll run the necessary KYC and AML identity checks and onboard you onto the platform. 
  4. Funding: When your facility is in place, funding will be in your bank account within 24 hours.

Other invoice finance providers in Ireland

Financefair isn’t the only invoice financing provider in Ireland. Let’s take a closer look at some of the other options available to businesses in Ireland. 

AIB¹ 

AIB is a financial services group that operates in Ireland and the UK, offering banking and other services to personal, business, and corporate customers.

The eligibility criteria for invoice finance with AIB is:

  • Your ongoing funding need is at least €150,000, on average
  • You sell goods or services on credit to other businesses
  • Your ongoing trade debtor’s ledger is a minimum of €250,000
  • You invoice after goods and services are delivered
  • The quality and spread of debtors are ‘satisfactory’
  • You use a sales ledger accounting system and appropriate credit control procedures

AIB is suitable for businesses who: 

  • Want their funding from a more familiar source
  • Are happy to finance all their invoices

Bank of Ireland² 

Bank of Ireland offers a range of banking and other financial services to SMEs.

The eligibility criteria for invoice finance with Bank of Ireland are:

  • You sell on credit to business customers
  • You have a good spread of debtors
  • Your business has growth potential
  • Your credit control is good

Bank of Ireland is suitable for businesses who:

  • Want their funding from a more traditional source
  • Are happy to finance all their invoices

Bibby³

Bibby Financial Services offers SMEs a variety of funding options, including invoice finance and invoice factoring. 

The eligibility criteria for invoice finance with Bibby are:

  • You provide goods and/or services to other businesses
  • Your customers have credit terms of between 30 and 90 days
  • You have strong credit management 
  • You have a capable management team 
  • You’ve been financially viable for a minimum of six months

Bibby is suitable for businesses who: 

  • Are happy to finance all their invoices
  • Prefer invoice factoring over invoice financing 
  • Want to apply for and manage their facility online

Close Brothers

Close Brothers offers a range of funding solutions for Irish businesses.

The eligibility criteria for invoice finance with Close Brothers are:

  • Your invoices are business to business
  • Your business has a minimum turnover of £750k p.a
  • You’re interested in financing all of your invoices, not just a few

Close Brothers is good for businesses who: 

  • Have a large number of high-ticket invoices
  • Might prefer invoice factoring instead of invoice financing
  • Want to apply for and manage their facility online

What to consider when choosing an invoice finance provider

When you’re making a decision on invoice finance providers, there are a few things to keep in mind:

The advance rate: What is the ideal advance rate for your business? Many businesses are glad to be approved by an invoice financing provider only to discover that their advance rate is 65% rather than the expected 90%. A low advance rate leads to a situation where you’re still struggling to get the capital required and therefore defeats the purpose of getting financing in the first place. At Financefair, we offer up to a 90% advance rate.

Cost: It can be difficult to work out the cost of invoice financing with some providers, so it’s important to calculate the true cost rather than just going off the headline rate. It can also be difficult to make an apples to apples comparison since each provider will charge fees differently. Make sure you fully understand what the cost of funding for each provider will be.

Do you want full book ID or selective? With full book invoice financing, you finance all of your invoices. This costs slightly less than selective invoice financing, but it can be operationally intensive, particularly if you’re a smaller business.

Selective invoice financing allows you to finance only your highest invoices, significantly reducing the admin time. It also allows you to test invoice financing before committing your entire debtor book. Financefair is currently the only provider of selective invoice financing in Ireland. 

The type of debtors you have: If your revenue is non-contracted revenue or from subscriptions, invoice financing might not be the best fit. Other options like revenue based financing or line of credit might be more appropriate.

Not sure what type of financing would be right for your business? Get in touch with our team to learn more. 

Grow your business with Financefair invoice financing

In this article, we’ve compared the main invoice finance providers in Ireland, to make it easier to choose the right one for your business. We’ve also looked at why you might choose Financefair, plus the main eligibility criteria for a number of other providers.

Ready to explore invoice financing options for your business? Contact Financefair today to discover how we can help you grow your business. 

Sources

¹https://aib.ie/business/loans-and-finance/finance/invoice-finance
²https://businessbanking.bankofireland.com/credit/finance/invoice-finance/how-does-it-work/3
³https://www.bibbyfinancialservices.com/funding/invoice-finance-products and    https://www.bibbyfinancialservices.com/funding/invoice-finance-products/invoice-discounting
⁴https://www.closeinvoice.co.uk/invoice-discounting, https://www.closeinvoice.co.uk/how-our-fees-work and https://www.closeinvoice.co.uk/invoice-finance

 

Invoice discounting: How to get started

If you’re searching online for invoice discounting, you might relate to one of these struggles:

  • You’re interested in trying invoice discounting, but in the past, providers have offered you a lower advance rate than you would have liked.
  • You’ve heard about invoice discounting but have also heard about the hidden service fees that are often involved, and want to make sure you don’t get caught out by fees. 
  • You feel invoice discounting is the best option for your business, but you’ve only been offered a disclosed facility in the past, and that’s not something you want to do. 
  • You don’t want to do full book invoice discounting as your business has lots of smaller contracts, and want to see what your alternatives are.

In this article, we’ll look at how invoice discounting works, the top invoice finance providers in Ireland, and what to consider when choosing a provider.

We’ll cover: 

To get started with selective or full book invoice discounting, learn about Financefair and get in touch.

How invoice discounting works

Invoice discounting (ID) is a financing tool that enables you to get an advance on your invoices. It allows you to use your existing contracts as general working capital, giving you quick access to cash without the long-term commitment of a business loan.

You may have heard different terms used to describe this type of funding. Invoice discounting and invoice financing are the same concept.

There are two types of invoice discounting facilities: 

  1. Undisclosed or confidential: This means your customers aren’t aware that you’re using ID. It’s done discreetly, meaning you’ll handle your own invoices and be responsible for collecting payments from your customers. Some businesses prefer this option, seeing it as better for managing customer relationships.
  2. Disclosed or non-confidential: With this type of ID, your customers will know it’s happening – there will be no confidential invoices. A funding provider may choose to impose disclosed ID on your company depending on their perceived risk.

A common form of disclosed financing is ‘invoice factoring’. With invoice factoring, the funding provider will take an intensive operational role in the business. They’ll be in touch regularly and will essentially step in and take over the credit control. Your customer will pay their invoice payments directly to the invoice factoring provider.

Here’s how invoice discounting works in practice:

  1. You raise an invoice.
  2. The invoice discounting provider sends you the pre-agreed advance amount. This will be a percentage of the invoice total (for example, 90% of the invoice value).
  3. Once the number of days to pay have elapsed (e.g. net 30, net 60, etc), your customer then pays the invoice into a separate funding account that’s managed by the invoice discounting provider. If the facility is disclosed, your customer will know this belongs to the funding provider. If it’s undisclosed, they will assume they are paying you as normal. 
  4. After the payment is complete, the funding provider will send you the remainder of the invoice amount minus any applicable fee.

The top invoice discounting providers in Ireland

If you’re looking for an invoice discounting provider in Ireland, the options are:

  • Close Brothers: Offers full book invoice discounting and invoice factoring. You can access up to 90% of the value of invoices raised.¹
  • Bibby: Offers full book invoice discounting and invoice factoring. You can access up to 100% of the value of invoices raised.²
  • AIB: Offers full book invoice discounting. You can access up to 85% of the value of invoices raised, and you’re able to manage your facility online.³
  • Bank of Ireland: Offers full book invoice discounting. You can access up to 85% of the value of invoices raised, usually for invoices outstanding up to 90 days.
  • Financefair: You can choose from selective or full book ID and access up to 90% of the value of invoices raised. The facility is managed completely online, and when you’re approved, your funding will be in your bank account within 24 hours. Financefair’s pricing model is transparent, with only three agreed fees (find out more below).

The providers above offer a mix of disclosed and undisclosed ID based on your perceived risk and preferences. The banks usually offer disclosed facilities. Financefair offers undisclosed invoice financing, meaning your customers won’t be aware you’re using ID.

What to consider when choosing an invoice discounting provider

There are a few things to keep in mind when you’re choosing an invoice discounting provider:

  • The advance rate: Consider what advance rate you need – in other words, what percentage of the invoice do you want an advance on. While you may be relieved to have been approved for funding with a provider, if the advance rate is too low (e.g. 65%), you might not have access to the immediate cash flow that is needed to help you grow your business. Make sure the provider you choose offers a rate that’s aligned with your business objectives and allows you to unlock the capital you need to grow. For example, Financefair offers up to 90%.
  • Cost: Many providers have hidden costs, so it’s important to calculate the true cost of ID rather than just going off the headline rate. With Financefair, the costs are: 
  • The annual platform fee: This is a fixed fee and is charged based on the facility limit provided.
  • Monthly facility fee: This fee is charged on the facility limit provided.
  • Discount 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.

Our all-in cost of funding through our platform typically ranges from 0.75% to 1.50% per 30 days, depending on the product type, term, credit quality and a number of other factors. Here are some examples of what an ID facility with Financefair might cost:

Size of facility Cost per 30 days
€100,000 €1,000
€500,000 €5,000
€1,000,000 €10,000

Try the calculator on our invoice discounting page to see the cost for your business.  

  1. Do you want full book ID or selective? Full book ID is where you raise all of your invoices. This is cheaper than selective ID, but it can be operationally intensive. Selective invoice discounting is more expensive but allows you to choose selected invoices and ignore smaller contracts. This can be easier to manage. Financefair is currently the only provider of selective invoice financing in Ireland. 
  2. The type of debtors you have. If your revenue is non-contracted revenue or from subscriptions, then ID might not be the best fit when compared with other options like revenue based financing or line of credit, for example.

Unsure of the right financing for your business? Get in touch with our team. 

Why choose Financefair for invoice discounting?

There are several benefits to using Financefair for your invoice discounting: 

You can choose selective invoice financing if you don’t want to finance your whole debtor book

We’re the only provider in Ireland that can offer you the option of choosing either selective invoice financing or full book. Managing full book ID is operationally more intensive, and many businesses prefer selective invoicing for its simplicity. 

Here’s an example of a situation where selective ID makes more sense than full book: 

  • Let’s say you’re an SME with a customer book of 30 accounts.
  • 10 of those customers make up the largest portion of your revenue every month. 
  • The other 20 customers make up a smaller amount of your revenue each month.

In this situation, doing full book ID would be much more operationally intensive than selective, without a significant advantage. You’d have to raise 30 invoices, even though you really only need to raise 10 invoices from your largest customers to achieve the level of funding you need. Selective invoice financing allows you to only raise those 10 invoices, saving you admin time. There’s also no tie-in, so you can use your facility as and when you need to.

You’re eligible for our invoice discounting facility if:

  • You’re a limited company with at least two directors
  • You’ve been trading for at least three years
  • Your minimum annual turnover is €3m
  • Your average debtor book is at least €500,000

At Financefair, we can finance single invoices from €30,000 and provide up to €50m in annual funding if your company meets our criteria.

Learn more about it here: Financefair Selective Invoice Finance

Access the right amount of funding at all times with the right model (and save time on admin)

After your initial funding has been approved, we’ll work with you to regularly review your funding and make sure you have the best funding option for your business.

As well as invoice discounting, we also offer other business financing solutions, including:

  • Revenue based finance: Converts up to 20% of your future annual recurring revenue to give you access to upfront capital. 
  • Line of credit: Works in a similar way to an overdraft, and gives you access to up to €250,000 instant working capital that you can draw on when you need it.

Before getting started, we’ll speak with you to understand your business needs and use data analytics to get an accurate understanding of your circumstances and funding requirements. Based on our team’s decades of financial services experience and industry knowledge, we’ll make sure you have the best funding model for your business and needs.

Many invoice discounting companies will require you to upload information at a specific time every morning and upload bank statements weekly, creating a lot of admin work and a drain on resources. 

With Financefair’s platform and data analytics, we can fund your account automatically – saving you and your team time and energy. 

Access future growth funding through our platform

At Financefair, we value our customer relationships and want to see you grow your company. So as well as discussing your immediate needs, we’ll also talk about your plans for future growth. We can help ensure you’re using the right financing option for you – whether that’s invoice discounting, revenue based financing, or line of credit

Here are the benefits of using Financefair for your business financing:

  • Our funding limits are flexible: We know working capital can ebb and flow. Say you have revenue based financing and have a quieter month than expected with less revenue coming in. Instead of just stopping your funding, we can talk about reducing it. 
  • You aren’t required to give a personal guarantee: This means you don’t need to put your personal assets, like your home, at risk. 
  • We don’t need you to have blue-chip debtors: If you have a subscription or recurring revenue model, it can be tricky to get funding from banks, who often want you to have blue-chip debtors. Financefair can fund these different business models as long as you meet our criteria. 

How a healthcare product manufacturer used Financefair’s selective invoice finance to secure another major supplier

A manufacturer of healthcare products was looking to branch out into Europe. 

They already worked with four key customers which were healthcare product suppliers that supply their products to the majority of hospitals in Ireland and the UK. They needed to win a fifth customer to grow into the continent.

Although they won the project with the fifth customer, they needed the funding to buy the stock to fulfill the contract.

That’s when they reached out to Financefair.

We spent the time understanding their business and deciding on which funding option would work best for them. We agreed that selective invoice financing would be the best fit for their needs.

With selective invoice financing, the healthcare company was able to get an advance on two of their current customer invoices, and use that funding to buy stock to fulfil the fifth supplier. 

The healthcare company had to act fast. Fortunately, selective invoice financing is a frictionless process with a quick lead time. All the business needed to do when the facility was set up was to upload two invoices to the platform. Within 24 hours, the company had the capital needed to buy the stock for the fifth contract.

Want a separate example of how selective invoicing can help a business grow? Check out our case study on how an Electrical, Mechanical and Civil Engineering company leveraged their approved worksheets to grow across Europe.

How to get started with Financefair

Getting started with Financefair for both selective and full book invoice discounting is easy:

  1. Apply: To start the funding application process, you can:
    1. Contact us directly to discuss your funding requirements. One of our team can then indicate if we can provide funding for your business. Call +35315252486, email busdev@financefair.com, or book an appointment with one of the team.
    2. Complete a funding application form, which takes less than 5 minutes.
  2. Offer: Within 24 hours, you’ll get an indicative offer.
  3. Onboard: If you accept the offer, our team will onboard you onto the platform and run the necessary KYC and AML identity checks. 
  4. Funding: When your facility is in place, funding will be in your bank account within 24 hours.

Unlock the capital in your outstanding invoices with Financefair invoice discounting 

In this article, we’ve looked at how invoice discounting works, who the top providers in Ireland are and what to take into account when choosing a provider. We’ve also shared some real-life examples to show how invoice discounting allowed growing businesses to achieve their goals. 

If you want the flexibility of choosing how many of your invoices to finance, or you want to work with a provider that cares about helping you to grow and will make sure your funding options align with your goals, reach out to us to start the conversation. 

Sources:

  1. https://www.closeinvoice.co.uk/invoice-discounting
  2. https://www.bibbyfinancialservices.com/funding/invoice-finance-products/invoice-discounting
  3. https://aib.ie/business/loans-and-finance/finance/invoice-finance
  4. https://businessbanking.bankofireland.com/credit/finance/invoice-finance/how-does-it-work/

What you need to get a business overdraft loan

If you’re looking for funding in the form of a business overdraft loan, you might have encountered one of these common issues:

  • You’re projecting a cash flow pinch. While you need fast access to cash for a large project or a one-off purchase, you know it will take too long to secure funding from a traditional source like a bank.
  • Maybe you’ve struggled to get a regular overdraft with your bank, or you can’t get one with a high enough limit. You may have been impacted by a recent shift in the Irish banking sector, with Ulster transitioning to AIB, who have downsized and removed some overdraft options during the transition.
  • You’re based in Ireland and want to find a provider that can accommodate your business both locally and internationally.

In this article, we’ll look at the options available for a business overdraft loan, plus why funding your business using a line of credit might be a better alternative. 

We’ll cover:

If you want to dive straight in and speak to us about our line of credit facilities, reach out to us to get started

Business overdraft loans: what are they and what are the alternatives?

If you’re looking for a business overdraft loan, the chances are you’ll start by looking at what your business bank account provider can offer. 

You usually have to be with a bank for a certain amount of time before you can get an overdraft facility. So if you can’t get an overdraft with your current bank, you won’t be able to switch to another business account and apply for one right away.

In that case, you might consider other options, such as: 

  • Business loan: This involves borrowing a set amount of money and repaying it (plus interest) over the repayment term. Providers of business loans include:
    • Banks: The loan options available include term and commercial loans for property, plus the most popular and flexible option, the stocking loan. With a stocking loan, you repay the interest each month, then pay the balance at the end, or sooner if you like, with no penalty. The maximum term for loans from a bank is usually 5-7 years. Examples of banks in Ireland that offer business loans include:
      • PTSB¹
      • Bank of Ireland²
      • AIB³,⁴
    • Peer-to-peer lenders: Their terms are usually similar to banks, but they aim to provide funding more quickly. However, that generally comes at a higher cost. Examples include:
      • Linked Finance: Loans from €10,000 to €500,000 for up to five years, with rates from 6.95%-17.5%.⁵,⁶
      • Grid: Loans from €10,000 to €500,000 at around 7-12% interest.⁷
      • Flender: Loans from €10,000 to €300,000 for up to five years at around 7-16% interest.⁸
      • Santiago: Loans from €10,000 to €500,000. Interest rate and term length are unavailable on their website.⁹
  • Line of credit (LoC): A business line of credit works similarly to a business overdraft, providing a predetermined credit limit from which a company can draw as needed. Interest is paid only on the amount borrowed. In Ireland, the following providers offer LoC (also known as a Credit Line):
    • AIB: They only provide a credit line to their banking customers.¹⁰
    • Financefair: The only provider in Ireland offering a line of credit as a standalone product to businesses, meaning you don’t have to open a current account with us. We work with businesses that are incorporated limited companies, have a minimum annual turnover of €250,000, and have been trading for at least 1 year. LoC facilities advance you 20% of your annual turnover up to a limit of €250,000.

Here are the pros and cons of each option:

 

Provider Pros Cons
Business loan
  • It’s a well-known financial product, usually straightforward to understand.
  • Fixed cost and terms so you know what you’re paying and can plan your business finances accordingly.
  • A loan with a bank can take a while to set up and require a lot of admin.
  • Usually needs a personal guarantee, so your personal assets are at risk.
  • Can be restrictive. You usually have to have paid down at least 50% before you can get more funding. If you spread out your repayments, you’re locking out further funding for years.
Line of credit
  • You can draw down funds when needed.
  • More control over the funding solution.
  • Acts as a safety net, pay interest only on what you borrow.
  • Quick decision and access to funds with Financefair.
  • No personal guarantee needed with Financefair.
  • Fully online application process with Financefair.
  • 12-month facility, not a long-term commitment.
  • Only two providers in Ireland: AIB and Financefair (AIB only for their customers).

What is a line of credit and when does it make sense to use one?

A business line of credit is similar to an overdraft. In Ireland, you can choose  AIB’s Credit Line (if you’re their business customer) or Financefair’s Line of Credit. You can apply for both online. 

AIB don’t advertise their line of credit limit, but Financefair offers businesses up to €250,000. This gives you the working capital you need to get where you need to go. There are no concerns about running into the red, as the money is available to draw down when you need it. 

With a line of credit, you:

  • Have the money for one-off payments that you might otherwise be unable to afford. This might include: 
    • Significant seasonal expenses that only come around once or twice a year. 
    • Upcoming cashflow gaps where taking out a loan would be too cumbersome or long-winded.
    • Wages
    • Business events
    • A larger-than-average order of stock so that you can take advantage of bulk-buy discounts
    • Capital outlay
  • Have the freedom to work with other providers. With a traditional business overdraft loan, you can only get this facility from your business bank account provider. But with Financefair’s line of credit, you can have your bank account anywhere, and our line of credit facility won’t stop you from getting additional finance elsewhere.
  • Can normally draw down and pay back monthly or as a lump sum. When your line of credit has been open for 12 months, you can decide if you want to keep it open as a safety net for peace of mind or close it. You can also close it early, so you’re not locked into 12 months. 

How to get started with a Financefair line of credit

In Ireland, business line of credit facilities are only available from a select number of providers. There are currently two providers: AIB (if you have your business bank account with them) and Financefair.

It’s the quickest funding solution for us to set up, at Financefair we can have a line of credit up and running in two weeks. You can apply online, integrate your banking and accounting software with our platform and send us any documents online too. 

 Our line of credit facility has a number of other benefits: 

  • No other provider in Ireland currently offers a business line of credit as a standalone product. 
  • Our platform’s data analytics lets us stay up to date on the ongoing performance of your business, so there’s no need for you to regularly send us bank statements. 
  • We collect fees via GoCardless direct debit. This means we don’t need to contact your customers, and there’s no requirement for you to redirect payments to a Financefair bank account.
  • We don’t ask for a personal guarantee, so your home and personal assets won’t be at risk.

Here are the lending criteria for using Financefair LoC: 

  • Be an incorporated limited company.
  • Have been trading for at least one year.
  • Have a minimum annual turnover of €250,000.
  • Have some sort of debtor book (doesn’t have to be blue chip).
  • Primarily be operating as B2B.
  • Integrate your accounting and banking with our platform for ongoing management.
  • Fit our rating system. We check several metrics like your credit score, experience score and business performance.

How much funding could you get?

The funding calculator on our line of credit page shows some examples of the size of facility you could get, based on advancing 20% of your annual turnover:

Annual turnover including VAT Line of credit you could be approved for
€250,000 €50,000
€750,000 €150,000
€1,250,000 €250,000

Our pricing for a line of credit is as follows:

  1. A monthly fee of 0.6-0.75% 
  2. The platform joining fee 
  3. Minus any discounts applied 

Here’s how to get started:

  1. Apply: Complete a funding application form or contact us to arrange an appointment to speak to one of the team. 
  2. Connect: You’ll need to share a few documents, including your latest statutory financial statement (e.g. tax returns), business forecasts and tax clearance certificate, as well as connect your banking and accounting software.
  3. Offer: Within 24 hours, you’ll get an indicative offer.
  4. Onboard: If you accept the offer, our team will onboard you onto our platform.
  5. Formal offer: Once you’re credit approved, you’ll get a formal offer along with:

a. A DocuSign link with the debenture
b. A link to sign up to GoCardless so we can collect fees
c. Security documentation for AML and KYC

6. Funding: Once your facility is in place, your funding will be available within 24 hours.

We charge any fees via GoCardless direct debit during the first week of each month. 

Why fund your business with Financefair?

A team of finance and accounting experts in Ireland founded Financefair in 2015 under the original name InvoiceFair. 

Our aim is to give businesses the working capital solutions they need to grow faster. We offer several finance options to do this: invoice discounting, selective invoice finance, revenue based financing and line of credit

Here’s what it means when you choose a Financefair funding solution:

Get an indicative offer in one business day

It’s important for you to know if you can get funding – and how much you can get – as quickly as possible. That’s why we’ll give you an indicative offer within a business day. Then, when you’re set up on our platform and have completed all your documentation, your line of credit facility will be set up and ready to access within 24 hours.

Our team has decades of experience in financial services. This expertise, along with our seamless data analytics integration, allows us to evaluate, approve, and monitor risk quickly – meaning you can get a fast decision.

Access a line of credit, plus other financing solutions to help your business scale

When you get a line of credit with us, you’re getting a convenient, straightforward funding option you can use when needed. But you also have an entry point to our other business financing options, including revenue based financing and invoice financing. 

Because of the way we operate – by both talking to you about your business and goals, and backing this up with your accounts data – we can help you find the right funding solution to help your business grow. For example, if you sign up with us for a LoC, but it becomes clear that invoice financing might be a better option, we can suggest this to you. 

Here are some of the other advantages of working with us:

  • You can work with a local company that understands the Irish market.
  • You don’t need to give us a personal guarantee, so your personal assets aren’t at risk. Most business finance providers require a personal guarantee. 
  • You won’t face any hidden fees: You’ll know exactly what your line of credit will cost from the beginning.

How a solar panel company tendered for extra work with a Financefair line of credit

A company that installs solar panels on business premises made the most of a big opportunity with a Financefair business line of credit. They wanted to take advantage of a supplier discount by bulk buying solar panels, and they came to us with the idea to use invoice discounting to secure the €120,000 they needed. 

When we discussed their plans, it soon became clear that a line of credit would actually work better. We could offer them a €250,000 line of credit, allowing them to place the big order of stock and also have capital left over to tender for a new contract. 

This meant they could work on two contracts at once instead of one, boosting their brand and credibility in the process. And when the payment for the finished job came in, they could pay off the balance of their line of credit. 

Being able to buy a large amount of stock is just one example of how a line of credit can work well for a business. And in this case, not only was the business able to get a bulk order discount, but they were able to procure another large project and use the line of credit to fund two contracts instead of just one. 

Finance one-off business expenses with a line of credit from Financefair

In this article, we’ve taken a look at the options available if you’re looking for a business overdraft loan and why a line of credit might be a better option. 

If you need funding of up to €250,000 to cover a short-term cash flow gap, or to dip into once or twice a year to cover seasonal costs, a line of credit could be the right funding solution for your company.

Reach out to us to speak to a member of the team about how Financefair funding can help your business get where you want it to go. 

Sources

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

Business loans in Ireland: What are your options?

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

Working capital loans: how to get started

Working capital loans: how to get started

If you’re searching online for working capital loans, you’ll probably relate to one or more of these struggles:

  • You need cash for your daily business needs, but you’re in the ICT or SaaS industry with lots of customers but no tangible assets. This makes it harder to get funding from a traditional source like a bank.
  • You’re in a position where you need immediate access to cash, which is usually difficult to achieve with traditional financing options.
  • You want repayment flexibility but it’s hard to do when your funding source is your bank. 
  • You’re based in Ireland and want a funder that can cater to you and understands your market. 

In this article we’re going to look at different types of working capital loans, plus a couple of options that might work better for your situation: revenue based finance and line of credit. We’ll cover:

Note: looking for working capital financing? Reach out to us.

Working capital loans: what are your options?

A working capital loan is usually a short term option, lasting less than 12 months. If you’re searching for working capital loans and trying to understand what options are available to you, you’ve probably already tried talking to your bank to secure funding and are looking for an alternative business loan

In Ireland, there aren’t many providers of working capital loans, but here’s a quick look at some of the options available and who provides them:

  • Small business loan or term loan: An amount of money that’s paid back in regular payments over a fixed period of time, with interest added. Small business loans are widely available from traditional banks to peer to peer online lenders. 
  • Invoice discounting (or invoice factoring): A provider lends cash to a company up to a certain percentage of its unpaid invoices. Providers include Financefair, Bibby and Close Brothers. 
  • Overdraft: An overdraft or line of credit on your business bank account gives you access to additional money for purchases over what’s in your bank account. You’ll usually pay higher interest rates on the amount you use and other fees normally apply too. 

Here are some of the pros and cons for these solutions: 

Type of working capital loan Pros Cons
Overdraft
  • You can use it as needed.
  • Usually renews annually.
  • Limited by historic trading performance.
  • Tied to current bank/provider.
  • Security or personal guarantee may be required.
Small business loan
  • Comparatively low interest rates.
  • Wide availability of options.
  • Fixed amount and repayments.
  • Lengthy application process.
  • Debt on balance sheet; security or personal guarantee required.
Invoice discounting (ID)
  • Aids cash flow.
  • Related to business growth.
  • Viable only with debtors/invoices.
  • Redirecting funds to ID Provider’s account may cause friction.
  • Customer concentration limits affect funding from larger customers.

 

Just as businesses with a debtor book can use their receivables to secure funding, you can also unlock funding from your customers’ future recurring revenue, as we’ll get into now.

Flexible options to suit your business: revenue based financing and line of credit

While working capital loans work well for some businesses, here are two lesser known but highly established options that offer more flexibility and could be an even better choice for your business:

1. Revenue based finance: how it can fund your business 

Revenue based finance (RBF) unlocks liquidity that’s trapped in the future contracted and non contracted revenue you have in your business. A RBF provider puts a value on your revenue and then converts it into a working capital funding line that you can use to grow your business.

Revenue based finance is designed for businesses that don’t have tangible assets but do have customers and recurring contracted and non-contracted revenue – for example, a subscription-based or SaaS business.

With traditional funding, you’d typically go to your bank with a set of projections and get a short term loan based on the bank’s assessment. Then, depending on how your business performs compared to your projections, you might either need to renegotiate lower repayment terms or an extension to the facility due to business growth.

Revenue based finance is based on your future cash flow and is directly aligned to the ebb and flow of your business revenue. This means your repayments can increase and decrease depending on the amount of revenue each month, as opposed to other options like a short term loan which is a fixed amount with fixed repayments

How does it work in practice? Here’s how we do it at Financefair:

We look at your projected income for the next 12 months and your expected growth rate. Based on those numbers, we can offer up to 20% of Annual Recurring Revenue (ARR), or 70% of your quarterly income. We can then advance the funds on a quarterly or monthly basis, and adjust the funding based on how much you’ll grow.

Here’s how RBF works in a growing business:

revenue based financing example

  • Let’s say your business’ assumed sales growth rate is 25%, with month 1 bringing in revenue of €250,000.
  • With a growth rate of 25%, here’s the expected income for the next 6 months:
M1 M2 M3 M4 M5 M6
€250,000 €312,500 €390,625 €488,281 €610,352 €762,939

 

  • Let’s say we’ve agreed to advance funds of your first 3 months of income, and then every month after that.
  • Month 1, Day 1, we’ll advance 70% of your first 3 months of income
    • That’s M1 + M2 + M3 = first advance. So €250,000 + €312,500 + €390,625 = €953,125
    • Then 70% of those months combined. So 70% of €953,125 = €667,188
    • Month 1, Day 1, we’ll advance €667,188
  • At the end of Month 1, when you receive your expected €250,000 income, and will therefore be able to repay 70% of the funding Financefair advanced in the first month.
    • That’s 70% of your M1 income. So 70% of €250,000 = €175,000.
  • End of Month 1, you’ll repay €175,000.
  • We’ll now be advancing funds on a month to month basis.
  • We’ll look at your projected income in Month 4, which would be €488,281.
  • At the end of Month 1 or beginning of Month 2, we’ll then advance 70% of your Month 4 projected income.
    • 70% of €488,281 is €341,797.
    • Beginning of Month 2, you’ll receive €341,797 in funding from Financefair.
  • At the end of Month 2, you’ll receive the expected €312,500 in income, and will repay 70% of the income received in the second month.
    • That’s 70% of your M2 income. So 70% of €312,500 = €218,750
    • End of Month 2, you’ll repay €218,750.
  • Then, we’ll look at your projected income in Month 5, which would be €610,35.
  • At the end of Month 2/beginning of Month 3, we’ll then advance 70% of your Month 5 projected income.
    • 70% of €610,352 is €427,246.
    • Beginning of Month 3, you’ll receive €427,246 in funding from Financefair.
  • This continues for every subsequent month.

revenue based financing graph

As you can see with this example, the funding you’re advanced acts as a revolving line of credit based on your projected income of the next month, which allows you to use your own revenue to fund your growth.

The advantages of choosing revenue based financing are:

  • A lot of flexibility: If your revenue grows, the funding amount can also grow, but we can also dial back the funding amount and repayments in slower months (based on our discussion every 3 months). It just takes a conversation. 
  • It’s a line of funding that’s directly related to the growth of the business. This gives you a lot of scope for further funding. 
  • It’s non-dilutive and gives you time to grow your ARR. If you’re using RBF to grow, a higher ARR drives a higher company valuation which will translate into a lower level of dilution if you raise equity.
  • No need for additional applications: You don’t have to worry about getting the amount of funding right first time, not knowing what opportunities might come up for your business in future. We know the amount you request may need to change, and if you need more money for more growth opportunities, there’s no need to fill in another application like you would if you wanted to extend a loan with a bank or other provider. 

Interested in learning more about whether RBF could work for you? Reach out to us to learn more.

2. Line of credit: how it can fund your business

Line of credit (LoC) facilities are a type of working capital loan. It usually acts like a digital overdraft, which gives you access to instant working capital you can draw down whenever you need it. 

We think of a business line of credit funding as being driven by key events in the business. In other words, LoC is great for when you see a big opportunity for your business that would require additional funding to fulfil. For example, a bigger than average bulk order of stock in order to fulfil a new contract.

Why choose a line of credit over a traditional bank overdraft? In general, line of credit providers can offer bigger amounts of funds than a traditional bank – at Financefair, we offer up to €250,000 per 12 months. 

It’s also a lot more flexible: if you need more funding it’s much easier to arrange than if you had an overdraft or short term loan with a bank where you’d have to fill out a new application to secure more money.

Receiving funds from a line of credit is straightforward once you’re approved: whenever you need the funding, you upload an invoice and get the funds directly sent to your bank account. 

The big advantage there is that you don’t have to divert all your customers’ payments to a separate bank account as you would with invoice financing. Instead, you can simply draw down whenever you need financing.

Read this article to find out more about line of credit.

Revenue based financing vs line of credit: which one might work best for your business?

To summarise, revenue based financing is generally best for companies:

  • With predictable recurring revenue.
  • That are looking ahead to scaling/growing.
  • Looking to better manage their working capital cycle, rather than operating month to month.
  • Who don’t necessarily have blue chip debtors but have recurring revenue.
  • With a few ongoing contracts, a couple more about to start, and a few more they want to win. In other words, the customer pipeline is there, but you need to know there’s some extra money available to deliver on these contracts. 
  • 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.

Line of credit is usually more suitable for companies:

  • Who need a cash injection for a project or business milestone.
  • That value and need flexibility.
  • That don’t want to go with purchase order finance, trade credit and other invoice financing methods and have to deal with the friction that comes with that – for example diverting all payments to a separate bank account.
  • That don’t want to wait for months to get a response on a small business loan and get funding immediately. 
  • That have a debtor book with a lot of customers. LoC is easier to manage than traditional invoice discounting when you have hundreds of customers, for example.

What do we do and why work with Financefair?

Financefair (formerly InvoiceFair) was founded by a team of experienced industry experts with the aim of offering ambitious businesses tailored working capital solutions to help them grow faster.

Since 2015, we’ve been helping companies in Ireland with invoice finance, revenue based financing and business line of credit. We provide the working capital required to allow these companies to capitalise on their market opportunities with fit for purpose funding. 

Here’s what you’ll get when you work with us:

Get a decision within 24 hours thanks to our experienced team

Our experienced team and streamlined processes mean we can get a response for you within 24 hours. 

Once your application has been approved, we can release funds within 24 hours. This is because we use technology to get read-only access to your most recent accounting and open banking information which gives us a real-time view on your finances and therefore a much more accurate understanding of your funding requirements. 

Our team has years of financial services experience, with the breadth and diversity of our industry knowledge and track record overlaid with access to real-time data, we ensure to evaluate, approve and monitor risk effectively. 

Scale your business with flexible and established products 

We’re the only financing providers that offer revenue based financing and business line of credit in Ireland. 

That means that when you choose Financefair, not only do we ground our decisions on real time accounting and banking data but we speak with you to understand your business needs and growth plans. We ensure we offer you the financial products that will be the best fit to your business. 

For example, we know from years of experience that e-commerce businesses find that RBF is a much more effective and efficient way to scale that business than with a short term business loan.

Some other important aspects to know about our products:

  • A variety of flexible products means it’s easier to find something that’s a good fit for you. We’ll work with you and your finances to understand whether a line of credit, revenue based financing or invoice finance would be best for you.
  • We offer flexible funding limits: This means that as your business grows, so can your funding limits. We also know that working capital ebbs and flows, so if you have a month where you haven’t taken in as much revenue as you expected, we can have a conversation about dialling back your funding – rather than stopping it altogether. 
  • There are no restrictive debtor concentration limits: This is important for your business if you’re uncertain about how you’ll grow. We dive into more detail on this below.
  • You don’t have to have debtors to work with us: Businesses with a subscription or recurring revenue model can sometimes struggle to find funding, but our RBF product means we can still help you
  • We don’t require a personal guarantee from the business owner.
  • Our pricing is transparent, with no hidden fees or costs.

Access more working capital via our unique funding model

We’re able to advance a larger amount of funds thanks to our established funding model. 

The funding doesn’t come from our own balance sheet, unlike with traditional banks. Instead, we partner with investors who advance the funding. This means you’ll have access to funding that has different risk mandates and a portfolio approach that can be taken to spread risk. This allows you to access more overall funding.

With traditional bank loans, there are strict concentration and risk rules. Banks don’t want to provide more financing to a company that already has a credit line with them. This means it’s often harder to top up or get access to a higher amount of funding.

Our established funding model means that for you as an SME you can more easily request – and get access to – more funding.

How Zeus Scooters used revenue based financing to expand into new territories

Irish company Zeus uses the world’s first 3-wheeled electric scooter featuring state-of-the-art technology and reliability to give their users a safe, smooth, and stable ride. Over 100,000 customers per day use their services through their mobile app, which operates across almost 40 cities in 6 countries and 2 continents, including Germany, Sweden, Norway, Croatia, Italy, and Malaysia.

For Zeus, the company’s speed of growth depended on how quickly they could secure funding for upfront infrastructural costs and more vehicles as adoption numbers rose in a new market.

The options were: 

  1. Raise restrictive or expensive equity and potentially give up ownership of a portion of their business.
  2. Take out inflexible long-term debt.

Zeus needed to find a solution that matched their growth plans without restricting their cash flow runway, business operations, or having to give up equity. 

This is where revenue based financing was the ideal option, as it meant Zeus could leverage up to 20% of their future annual recurring revenue (ARR) to buy the scooters needed to expand into new territories.

Founder and CEO Damian Young said: “We operate in a relatively new, very fluid, and fast-changing category. It can be difficult for more traditional funders to see the opportunity and they can be reluctant to support new business models.”

Financefair worked with Zeus  to provide funding based on their annual recurring revenue. We structured a business financing solution where they were able to repay based on the cyclical nature of their business, which included moratoriums and repayments when it worked best for them.

“Their solution really did demonstrate a total understanding of our business and allowed us to utilize our most valuable current assets – our customers – via our future cash flows (ARR) to increase stock levels, expand into new territories, and really grow our business.”

Find out more in the full Zeus Scooters case study

Manage your cash flow more efficiently and grow faster with Financefair 

In this article, we’ve looked at some of the options for working capital loans, and why revenue based financing or line of credit might work better for your business depending on your circumstances. 

Whether you need a source of funding for growing and scaling your business or to cover a one-off business expense like a bulk order of stock, our working capital financing solutions could help support your business needs. 

If you value flexibility and transparency and you’ve struggled to find suitable funding before due to running a business that doesn’t have tangible assets, let’s talk about how we can help you. 

Reach out to us to get started. 

Online business line of credit: Everything you need to know to get started

If you’ve been researching online business line of credit facilities, you might relate to one of the following situations:

  • You need immediate access to cash for a one-off purchase or a business milestone, but you know a traditional funding option will take too long to secure.
  • You might have tried to get a regular overdraft with your bank, but perhaps you couldn’t get one, or if you did, you didn’t get the loan amount you needed.
  • You’re located in Ireland and want a funding provider that can cater to you. You might also be looking to expand internationally.

In this article we’re going to look at funding your business using a line of credit, including how it works, when it makes sense as a funding option, and how to get started with Financefair. 

We’ll cover:

Note: If you want to dive straight in and find out what funding we can offer you, get started by filling out our online funding application form

What is a business line of credit and how does it work?

In short, a business line of credit works like a digital overdraft. Many businesses need access to funding of between €10,000 to €250,000 per 12 months, and this is where a line of credit can help. 

With a line of credit, you don’t have to worry about running into the red as the capital is available to you if you need it.

Usually, you can apply for a business line of credit online with your bank or with an alternative online lender. Once you’re ready for the funds, you can submit a request directly to your provider and receive the funds via a bank transfer straight into your business bank account.

The main advantages of a line of credit is that you: 

  • Can easily manage larger than usual payments for stock or staffing that you might not otherwise have the money for. 
  • Aren’t limited to only working with your business bank account provider, giving you more choice. It’s also useful if you’ve had your business bank account for a short period of time, as many banks won’t lend to businesses within a certain time of the account opening. 
  • Can usually draw down and pay back on your own repayment terms, either monthly or as a lump sum. After the initial 12 months have passed, you can either decide to keep the facility running for peace of mind or bring it to a close. 
  • Can put it towards seasonal business expenses that may come once or twice a year. 
  • Won’t have to divert customer payments to a separate bank account. You can directly request to draw down from your LoC and get the funds in your account.

When does it make sense to get a business line of credit?

When you might choose to get a line of credit depends on your needs and future business plans. It might be something you’re searching for as you aren’t happy with your business checking account overdraft – or maybe your bank didn’t grant as big an overdraft as you needed.

A line of credit is ideal for handling a larger than usual transaction, or seasonal transactions that only occur a couple of times a year. With this type of facility, you won’t face the restrictions you may get with term loans and other types of small business loans, like having to pay a fixed amount per month for a certain number of months.

Other examples of situations where a line of credit may be useful include if you:

  • Are looking for hassle-free cash flow for capital expenditure – most commonly to buy stock.
  • Want to fund milestone needs in the business – say you need to upgrade some equipment to keep up with demand.
  • Can see a big opportunity but need funding for a larger than usual expense to fulfil.
  • Went to the bank for an overdraft but were turned down or didn’t get as much as you’d hoped.
  • Think you can’t get the funding elsewhere, maybe because you already have a loan.

You might also choose to keep a line of credit open after you’ve dealt with your immediate funding need and paid off what you’ve used. You have the option to keep it available to you, ready for the next big expense. 

We think of line of credit use as being driven more by the key events and milestones in your business, compared to other types of funding such as revenue based finance (RBF) which is driven more by business strategy and scale. However, a line of credit also works nicely alongside other solutions like RBF if it suits your business needs. 

Read more: Revenue based financing: What it is and how to get started

How to get an online business line of credit with Financefair

Business line of credit facilities are not very common in Ireland. At the moment, only AIB offers a credit line for their customers and we’re the only alternative provider in the country.

Our online business line of credit is both quick and easy to set up. It’s our fastest solution to get up and running, and we can advance the funding within 24 hours of your being onboarded on our platform. 

It’s easy to do since the set up is all digital – you can apply online, connect your accounting and banking with our platform and complete the fulfilment all digitally.

Here are some of the other benefits of our line of credit facility: 

  • We’re the only provider in Ireland that can offer a business line of credit as a standalone product. 
  • We use data analytics for visibility over ongoing performance, meaning you don’t need to continually send us bank statements or any other financial documents. 
  • We collect fees via direct debit, so there’s no need for us to contact your customers, or for you to redirect payments to another bank account.
  • We don’t require a personal guarantee.

Who’s a line of credit for? To qualify to use a Financefair line of credit, you must: 

  • Have a debtor book.
  • Be primarily B2B.
  • Be able to integrate your accounting and banking software with the Financefair platform for ongoing management.
  • Be a fit in our rating system: We look at a number of attributes including your business credit score, creditworthiness, credit history, experience score and business performance.

How much funding could you get?

Here are some examples from our funding calculator showing the revolving line of credit you could get depending on your annual revenue:

Annual turnover including VAT Line of credit you could be approved for
€250,000 €50,000
€750,000 €150,000
€1,250,000 €250,000

 

You can try our calculator for yourself by visiting our line of credit page. 

Our pricing for this type of facility comprises:

  1. A monthly fee of 0.6-0.75% 
  2. The platform joining fee 
  3. Depending on a few other inputs there may be a discount

Costs typically range from 0.75% to 1.50% per 30 days, depending on the factors mentioned above. 

Here’s how to get started with our application process:

  1. Apply: Complete a funding application form or contact us to arrange an appointment to speak to one of the team. 
  2. Connect: You’ll need to share a few documents including your latest statutory financial statement (e.g. tax returns), business forecasts and tax clearance certificate, as well as connect your banking and accounting software.
  3. Offer: Within 24 hours, you’ll receive an indicative offer.
  4. Onboard: If you accept the offer, our team will onboard you onto our platform.
  5. Formal offer: Once you’re credit approved, you’ll get your formal offer along with:
    1. A DocuSign link with the debenture
    2. A link to sign up to GoCardless so we can collect fees
    3. Security documentation for AML and KYC
  6. Funding: Once your facility is in place, your funding will be available within 24 hours.

What we do and why you should work with Financefair

Financefair (formerly InvoiceFair) was founded by a team of finance and accounting experts in Ireland, with the objective of offering working capital solutions to help businesses grow faster. 

In the years since then, we’ve continued to innovate and our funding solutions now include invoice discounting, revenue based financing and line of credit. 

When you choose a Financefair funding solution, here’s what you’ll get:

Get an indicative offer within 24 hours

We want you to know how much funding you can get as soon as possible, and that’s why we’ll give you an indicative offer within a business day. Plus, once you’re onboarded and all documentation is complete, you’ll be able to access your line of credit within 24 hours.

We can do this because of the way we combine technology and data analytics with our experienced team, offering you a frictionless and flexible experience. Having access to real time accounts data and combining this with a conversation about your business means we know exactly how things are going, and we have the information we need to evaluate, approve and monitor the risk. We can make decisions for future funding faster and often offer more funding than other providers.

The team’s diverse knowledge and experience of financial services means we know very well that working capital ebbs and flows like a river. Some months it flows faster than others. We understand this and can work with you to adapt what we’re offering. 

Access a line of credit, plus other innovative financing solutions to help your business scale

Not only is a line of credit a useful source of hassle-free funding that you can manage on your own terms, but it also serves as an entry point to other business financing options we offer at  Financefair. As your business grows and becomes more successful, other opportunities will become available that can help you scale even further. 

Because we speak to you to get an understanding of your business, and back this up with real-time data about your accounts, we’re able to offer innovative funding solutions that are tailored to you and your unique situation. Whatever your goals for your business, we act as a funding solution for your company.

Here are some of the other advantages of working with us:

  • You’ll be able to access multiple options to help grow your company: These include invoice financing, revenue based financing and line of credit.
  • You can work with a local company: We’re the only provider of line of credit facilities in Ireland.
  • You won’t come up against any restrictive funding concentration limits: We work with multiple funders. We explain more below, but in short, our unique business model allows us to offer more funding.
  • You don’t need a personal guarantee.
  • You won’t be charged any hidden annual fees or costs: Our pricing and monthly payments are clear from the outset. 

Get more funding thanks to our unique business model

One of our unique selling points is that because of our unique business model, we’re able to advance a larger amount of funds. 

Usually, traditional bank loans have strict concentration and risk rules. Banks don’t want to give more financing to a company that already has a credit line with them, which often makes it harder for you to access a higher amount of funding.

But when it comes to our funding, we don’t fund directly from our balance sheet. Instead, we partner with investors who advance the funding. That means you might get 20% from one investor, 40% from another, and so on. This diversification means it’s easier to get more funding in place, as well as top up your line of credit when needed.

How a solar panel company doubled their contracts using a Financefair line of credit

One company that took advantage of a Financefair unsecured business line of credit supplies and installs solar panels for businesses on their commercial property. 

They needed funding for a bulk purchase of solar panels to make the most of a supplier discount. Their initial plan was to use receivable financing to get €120,000 to fund this purchase. When they reached out to us, however, we realised a line of credit would be a better fit for their needs. 

We were able to offer and advance them a €250,000 line of credit upfront, instead of the original €120,000. This allowed them to fund the initial purchase they had in mind, plus use the remaining €130,000 to tender for another contract and get new business. 

This allowed them to fulfil two contracts at the same time, instead of just one.

Using the business line of credit to fund one purchase and tender another contract helped boost their credibility and their brand. Once the money came on from the completed job, they were able to pay off their outstanding balance. 

Thanks to the line of credit, they were able to:

  • Get a bulk discount on their solar panel order 
  • Fulfil their existing contract
  • Secure another large contract
  • Fund two projects instead of just one as they had done in the past

For those needing to bulk buy stock to fulfil contracts, a line of credit can work very well – and in this case, it made more sense than invoice discounting. 

Fund your business milestones with a Financefair business line of credit 

In this article we took an in-depth look at funding your business using a line of credit. We shared some examples where it works well as a funding option, then we went on to cover how you can get started with Financefair. 

If you know you have a big expense coming up that you can’t quite cover, like upgrading your equipment to cope with demand, or buying extra stock to deliver on another contract, a line of credit could be what you need. 

Reach out to us if you’re ready to get started, and let’s talk about how we can help you get your business where you want it to be.