A new representative group for alternative financiers in the Irish market launched yesterday with the aim of providing SMEs an alternative source of funding to the pillar banks.
The organisation, Independent Finance Providers Ireland (IFPI), already has 16 members companies including the likes of invoice finance group Bibby Financial Services and peer-to-peer lender Grid Finance.
Chairman John Power said that the organisation aims to make small and medium businesses aware that there are other options for securing capital besides the pillar banks.
"There was no coordinated approach by them [alternative lenders] about how they would create awareness in the market, that was the genesis, the organisation is about awareness," he said. Despite insisting that he viewed the group as working in tandem with the banks, he said the organisation's members will potentially "eat their [the bank's] lunch", although he said that he would like to see IFP members and banks collaborate with common clients.
He said banks will still be the principal source of finance for the majority of SMEs.
"We can't compete on price with a bank, they have much cheaper funding, but [what we do] is we get an SME to a stage where they might have a funding gap and we fill that gap.
He expects the group to have 20 members by the New Year and expects membership to stabilise at about 20-30 financiers.
The group also released a study to coincide with the launch. The survey of almost 600 companies found that 96pc expect to expand next year, with 37pc expecting to require funding for their growth.
But 46pc reported issues accessing finance, with more than half saying Irish banks are "very cautious" about lending.