A NEW €60m loan fund has been launched for small business alongside a guarantee that credit decisions will be made within five days.
It normally takes 21 days for loan applications from small businesses to be decided upon, according to a study by the Department of Finance and Red C research.
The firm behind the lending programme is Bibby Financial Services Ireland (BFSI), the Irish lending subsidiary of UK multinational Bibby Line Group.
The company does not have physical branches in Ireland; it makes initial contact with borrowers through its website and by phone and then sends sales peoples out to customers to firm up deals.
It is targeting businesses who have given up on their banks.
Half of companies who applied to banks for funding between September and November, a recent survey by the Irish Small and Medium Enterprise association, were refused credit.
The new fund is aimed at viable businesses who need temporary finance, while they wait to be paid by clients, which on average takes between 60 and 90 days after a contract is signed.
"Like all SMEs, our clients sell goods and services and many under their credit terms have a 60- or 90-day wait for payment. With day-to-day operating costs and staff salaries to pay, this arrangement is sometimes unsustainable for Irish SMEs," said Ronan Horgan, newly appointed managing director of Bibby Financial Services Ireland (BFSI).
The launch is part of a three-year Irish expansion strategy for Bibby Financial Services, which entered the Irish market in 2006.
UK parent Bibby Line Group, is well known for its shipping and distribution businesses, and financial services.
In the next three years the company plans to double the size of its market share and workforce in Ireland, which currently stands at 30 people working from a head office in Dublin's Sandyford Industrial Estate.
"Ireland is an important part of our global success. With a strong and growing export market in Ireland and positive developments abroad, there are significant opportunities for indigenous SMEs to get ahead and they will require strong financial backing from alternative sources of finance to scale," said Graham Byrne, chief commercial officer of Bibby Financial Service Europe.
The fund is the latest in a series of new non-traditional borrowing options to open up to SMEs.
It emerged recently that German development bank KfW is to make money available to small Irish businesses which should come at a cheaper rate than Irish bank financing because KfW is a triple-A rated bank, so it can borrow money more cheaply and then pass this on to its customers.
The loans will be funnelled through the National Treasury Management Agency and the new Strategic Investment Fund or the state-owned banks, AIB and Permanent TSB.