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Thursday 30 November 2023 Dublin: 2°C
follow the money

How one company put €10 million in funding on the table for Irish business

Linked Finance was Ireland’s first peer-to-peer lending site.

OVER €10 MILLION in funding for Irish businesses has been put on the table through the country’s first peer-lending platform.

But Linked Finance, one of only two peer-to-peer finance companies in Ireland, expects that figure to swell to €250 million by the end of 2017 as the borrowing trend continues to take off worldwide.

It said over 300 Irish SMEs had sealed loans so far through its site since its launch in 2013. The platform connects businesses in need of cash with individual lenders who can offer interest rates of up to 15% on their money.

Linked Finance CEO Peter O’Mahony said businesses were finding that traditional banks were slow to respond to their needs and they were looking at other options for finance.

An added attraction is that lenders and borrowers become partners – it’s often the case that a number of lenders will already be customers of a business and will have an active interest in their success,” he said.

Pulse College / Jason Clarke Photography Linked Finance's Peter O'Mahony, right, with Tony Perry from borrower Pulse College, which went for a €60,000 loan Jason Clarke Photography

A growing industry

The majority of its loans have been oversubscribed, meaning there was more money on offer than the businesses were hoping to borrow.

Linked Finance’s only rival in Ireland, Grid Finance, has targeted €100 million in lending before the end of 2017. The peer-to-peer lending industry was worth $6.6 billion in the US alone last year, according to figures from Research and Markets.

One of the biggest lures for lenders on the platforms is the high rate of return on their money – typically between 6% and 10% on Linked Finance - while a major draw for businesses is the quick loan approval. The biggest downside is the fees, which can add a significant burden to the borrower’s loan costs.

Dublin vegetarian restaurant Cornucopia has been trying to raise €50,000 to develop a new retail food brand and refurbish its premises through the platform.

Linked Finance - Cornucopia image2 Cornucopia's Deirdre McCafferty and Food For Living Life's John Noble

Owner Deirdre McCafferty said: “It’s a very exciting time for our business and we’re delighted to be raising funding in a way that brings so many people on board as partners in our growing success.”

Other firms funded through the platform include Dublin’s Viking Splash Tours and fish-and-chip chain Leo Burdock.

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