When it comes to funding, there are many alternative options.
There’s a lot of talk about alternative business finance at the moment and indeed, this new breed of funders are filling the gap left by many of the traditional lenders. Nowadays business owners and advisors are more open-minded about looking beyond the banks for finance and the emergence of alternative finance players in Ireland has led to more choice and competition for SMEs.
Although there are some new products such as equity crowd-funding and peer-to-peer lending, others such as invoice finance and asset finance have been around for years, and are generally available from the mainstream banks. However, one of the key advantages of these alternative funders is their flexible approach to lending. As well as offering bespoke facilities to meet the exact needs of a business, they can often support SMEs that are outside traditional lenders’ criteria. This is very positive – especially for the many businesses that have struggled to source finance in the last few years.
With so many options now available, any decision about the best form of finance for a company should be carefully made. Identifying the best product and funder to meet a company’s exact needs can be difficult, and there are many factors to consider in the process. For example, alternative funders may offer tailormade facilities and greater flexibility, but their costs can be higher. However, cheapest is not always best, so business owners need to consider the benefits and drawbacks of all options before making any decisions.
We’ve seen a steady increase in business owners and professional advisors enquiring about working capital options such as invoice finance, trade finance and asset-based lending. This is very encouraging as it indicates a general acceptance of alternative finance providers within the business community. Hopefully with a wider range of funding solutions to choose from, it will become easier for Irish SMEs to access the finance they need to achieve their business goals.