Rapid Expansion At Linked Finance
The demand for finance among SMEs is growing again post-lockdown, according to Niall O’Grady, CEO of Linked Finance. “Many businesses initially used cash reserves built up during Covid but are now borrowing for growth and investment,” he says. “The extra demand that Linked Finance is seeing is down to banks leaving the Irish market and customers demanding high standards, faster turnaround times, and less bureaucracy from remaining lenders.”
To date, Linked Finance has engaged with c.3,300 SMEs in arrangements for €225m in lending. “We make fast decisions with minimal documentation — 95% of our customers give us a maximum score on customer satisfaction and come back for more to continue their growth,” says O’Grady.
It took the lender six years to reach the first €100m and then another three
years to reach the €200m milestone, last year. Loan volume in 2022 was double the volume in 2020, and O’Grady believes annual loan volume will increase towards €100m in 2024 as banks tighten their risk appetite or exit the market completely.
Linked Finance covers nearly all types of loan purposes, specialising in working capital loans followed by business expansion and stocking loans. Interest rates are determined by ability to pay, and risk, says O’Grady. “We understand that not all businesses fit into a ‘one box’ mentality,” he adds. “Any review looks at financial performance and growth trajectory. Our typical rates start at 6.75% plus a fee for 24-hour turnaround and concierge service to each client.”
Linked Finance is funded for its lending by institutional investors and retail investors, with a 50/50 split. Retail investors receive an average return of 6.75%, and investment ranges from €50 to €5,000 per loan. In 2022, Linked Finance introduced Merchant Cash Advance, which sets repayments as a percentage of daily card transactions. “We have seen a surge in demand for this new product as an ideal solution in particular for seasonal businesses,” says O’Grady.