Leman Solicitors are proud to have acted for several of Ireland’s newly established and successful alternative finance providers
Alternative finance providers are servicing a gap in the market for SME lending. In the wake of the global financial crisis we have seen a cultural move from bank-only finance to the many alternative sources now available.
Traditionally the domestic banks have had little or no competition for SME funding. As a result Irish businesses were and are among the highest bank borrowed entities across the EU. 60% of Irish SMEs use bank borrowings which is significantly higher than the EU average of 39%.
Irish SMEs are significantly more reliant on bank overdrafts, credit lines and credit card overdrafts then their European peers. These short term funding sources lead inevitably to financial fragility in the form of higher costs and greater reliance on domestic banks which don’t always have the expertise to properly assess SME risk.
The types of finance that the newcomer disrupters offer include: term lending; equity leasing & finance; trade finance; invoice finance; and invoice trading.