Linked Finance hits €200m milestone in lending to SMEs doubling its annual lending in less than 2 years
Linked Finance, the fastest growing alternative lender to Irish SMEs, has hit the milestone of lending over €200m since its launch. It took the lender 6 years to reach the first €100M and just 3 years to reach the €200m milestone. Linked Finance is now on track to lend €45m to SMEs in 2022, more than double the €19m lent in 2020, and forecasting up to €100m in annualised lending in 2024, as banks tighten their risk appetite or exit the market completely.
Companies borrowing through the platform are attracted by the fast pace of decision making, with the end-to-end process from initial application to receipt of funding taking as little as 24 hours.
Linked Finance has now provided 3,300 loans to ambitious local businesses in every county of the country. Strong demand for loans this year across retail, transport and construction were supported by Linked Finance expanding its product portfolio through the introduction of its new Merchant Cash Advance in February 2022 and increasing the maximum loan size to €500,000 in June. This followed a successful participation in the Government Credit Guarantee scheme in which Linked Finance was able to deploy over €30m in loans to businesses affected during the pandemic.
Linked Finance demonstrates that the per to peer lending model works and offers excellent returns to retail investors who have earned more than €19.4m in interest and typically earn annualised returns more than 8% across a diversified portfolio of on average 50 loans.
Some key recent trends for Linked Finance include:
- Supporting Irish SME’s throughout the Covid emergency with access to the loans under the Government Credit Guarantee Scheme.
- Launching the Open Banking credit application process for SMEs eliminating the majority of paperwork for getting a loan.
- Launched Merchant Cash Advance (MCA) product in March to allow businesses to unlock their daily cashflow from card payments as a source of financing
- Expansion of maximum loan size in June from €300,000 to €500,000
- Linked Finance platform now has over 28,000 registered users on the platform who are investing anything from €50 to €1000 in its simple autobid system
The next 12 months will see continued focus on digitisation and automation further enhancing the offering to both investor and borrower with better decision times, faster access to their accounts, enhanced offerings supported by open banking capabilities.
Lending over the last 9 years has focussed on the capital and major cities: Dublin (€72m), Cork (€17m), Galway (€8m) and Limerick (€7m). Other counties of high demanded including those surrounding Dublin – Meath (€10m), Kildare (€10m) and Wicklow (€8m) – also Wexford (€7m), Tipperary (€7m) and Kerry (€5m).
Commenting on the €200m milestone, Niall O’Grady, CEO of Linked Finance, said: “Hitting the €200m milestone in loans clearly demonstrates the success of a simple, fast SME lending model. This is particularly important when the banks are either too slow for SMEs or leaving the country completely. Our platform regularly connects Irish SMEs with retail lenders who recognise their enormous potential and want to invest in them.
Linked Finance is introducing new products and increasing limits on existing loans to ensure we stay ahead of the banks. We pride ourselves on providing a model that is efficient and transparent, allowing Irish businesses to take control of their finances and meet their objectives.”
At present, 57% of business loans issued by Linked Finance are to repeat customers, with a strong return rate. Schoolbooks.ie is one of Linked Finance’s original borrowers, having taken multiple loans that it has used to grow and scale its business.
Andy Byrne, Schollbooks.ie said: “Linked Finance has been our go-to stocking loans provider in recent years. When we needed to scale up art & craft supplies and school-book stock to meet homeschooling demands during the lockdown they were there to provide the finance we needed. The process of raising the funds is quick and easy to understand with minimal paperwork and bureaucracy. This has allowed us to match our requirements with the needs of the customer and grow our operations at the right pace.”
With €200m in funding already provided to local businesses and a growing list of happy clients, Linked Finance is primed to continue its growth and presence in the Irish market. Notable companies that have raised funding with Linked Finance in the past include the Rolling Donut, Kokoro Sushi Bento, Lolly & Cooks, Murphy’s Ice Cream, and the Irish Fairy Door Company.