3 Fast Business Loans in Ireland for 2021

If you’re starting or running a business in Ireland right now we salute you. Irish business owners are being hammered by the Brexit mess & an awful pandemic. Yet, despite this, the majority of businesses have survived and some have even thrived. You will also see the news headlines about various supports. Some have went down like a lead balloon (the hospitality keep-your-receipt tax back one with a dismal take-up) whilst others faltered at first (SBCI money through the banks with a 5% drawdown of €2 billion made available) but now are starting to take off due to the SBCI enabling some of the more agile fintechs to get in on the act. So what does that mean for you weighing up options for where to get a quote? Well, generally you can expect a faster turnaround time (days not weeks), lower paperwork requirements & no conditions attached before you can access the funds.

Fast Loan Options

1. Simple Working Capital Loan. You can now get up to €250k in days at rates from 4.75% so long as you are turning over in excess of €100k, are profitable and pass a credit check based on a few simple documents (2 years accounts, 12 months bank statements and the tax clearance certificate.)

2. Invoice Finance & Trade Finance. The SBCI have allocated funds to a fintech who can release funding based on what you’re owed in your book of debtors. In some instances they can also finance your purchase orders. This keeps vital working capital within your business instead of being tied up while your goods are in transit and then whilst you’re waiting for your customers to pay you.

3. Asset Finance. A fintech has access to SBCI funds to help businesses get more assets. They have a track record of financing new, old & unusual assets from all over the world. If you have your eye on something to help your business grow you can benefit from a quick decision at a great rate.

BusinessLoans.ie is here for you 7 days to organise fast finance quotes. Talk to us on 01 55 636 55 now.

Business Loans for Retail & Hospitality Exiting Lockdown

Now that we’re exiting Lockdown 2.0 and your business can reopen, there’s a good chance your working capital levels have been depleted. You may need a business loan for cash flow, hiring new staff, covid alterations, equipment or fit-outs. If your business bank statements are imperfect, showing low repayment capacity or have many missed payments you may have been declined the government-backed loans or you might just need approval fast. So what can you do? The good news is, there are a number of alternative finance options in Ireland that may work.

Merchant Cash Advance

If your business uses a card machine then a merchant cash advance is a fast finance solution. Every month you should receive a merchant services statement. The application and approval process is quick. You will need to get 12 months merchant statements & 3 months business bank statements to get approval feedback. So you may be thinking, how much can my business qualify for? It depends on the repayment capacity indicated by looking at the bank statements, as well as the turnover you’re doing monthly on the card machine. The credit team will look at how you were trading before covid as well as now and hopefully make a loan offer. A good rule of thumb would be expect an offer to be the equivalent to one month’s turnover, pre-lockdown drop-off.

How the loan is repaid is different than a typical loan. The finance company sets up a repayment of a small percentage of the daily income of the card machine. It could look something like 7%. That means if you took in €1000 one day they would take €70 towards the loan repayment. The credit teams are aiming to set a percentage that gets the loan repaid in around a year. They are often happy to renew the facility with you again in future once they see it’s being paid down. This type of repayment shows flexibility for times when business is quiet. The cost of finance is often comparable to rates for overdraft facilities many SMEs are quoted for.

Simple Unsecured Loans

If you have 2 years accounts (both in profit), 6 months bank statements (a dip in turnover is OK during Covid times but not too many missed payments and showing repayment capacity) & an up to date tax clearance certificate you could qualify for a simple unsecured loan from alternative lenders. This means you can get a fast quote, usually within 24 hours. The rate will generally be from 6% to 12% (the credit team will grade it A, B, C or D depending on the strength of the numbers they have crunched).

Asset Finance

If you need new items to help your business trade there are a number of options. We know of options for financing items such as big outdoor shelters, food trucks & commercial kitchen equipment. You would be surprised the amount of items that go in to a refurb or fit-out that can be financed.

We’re always happy to answer any questions you have & organise fast finance quotes. Call us now on 015563655 Always seek financial advice from your accountant or the Local Enterprise Office. Or we have professionals in our network we can introduce you to.

Asset Finance For Smaller Assets in Ireland

BusinessLoans.ie can now help with asset finance quotes for smaller items, €1000 and up. You get fast approval for leasing assets that can have tax deductible benefits & it’s easy to budget. Approval is definitely easier to get than cash loans, especially in the current covid climate we’re in. So if your business needs assets to help you add revenue streams talk to us today?

We can assist with items for businesses in:

• Construction or any businesses that need machines

• Medical & Aesthetics

• Vets

• IT, Telecommunications & Office

• Fitness

• Catering

To qualify you need to be currently trading with cash flow to meet repayments over a term of up to 60 months. Currently you might be limited to around €40k as a maximum with this solution however, we have other asset finance options for higher amounts. Call us now on 01 55 636 55

Business Loans in Times of Economic Uncertainty

With headlines to traumatise the Irish economy such as “Covid-19: NPHET recommends State moves to Level 5 restrictions for four weeks”, it makes me think of something my business mentor told me, about borrowing money when you don’t need it & being ready for unexpected situations. Let’s look in to it?

How much working capital does a small business need?

The amount of working capital a small business needs to run smoothly depends largely on the type of business, its operating cycle, and the business owners’ goals for future growth. However, while very large businesses can get by with negative working capital because of their ability to raise funds quickly, small businesses should maintain positive working capital figures.

Assuming you passed the debt-service ratio test, when should you borrow money for your business?

You should borrow when you are confident that you can make more profit as a result of borrowing money. Estimate what your sales and profits are before borrowing and what they will be after you borrow.

What is a good debt-service ratio?

A debt-service coverage ratio of 1 or above indicates that a company is generating sufficient operating income to cover its annual debt and interest payments. As a general rule of thumb, an ideal ratio is 2 or higher. A ratio that high suggests that the company is capable of taking on more debt.

In times of uncertainty or when a business really needs money is generally the time when underwriters will class the situation as high-risk and decline an application / apply a higher rate. That’s why businesses need to be sufficiently financed to handle shocks. Hopefully that working capital comes from retained earnings however, there are times when you will need that from supports, grants or debt. Always speak with your CFO or accountant to advise you on what’s right for your situation. There are a number of government-backed supports you can read about in our post here. Or if you want to look at fast finance quotes from alternative lenders we can assist. You can get an idea of the different loan types in our post here. We’re here for you 7 days to talk finance on 01 55 636 55.

References:

https://www.irishtimes.com/news/ireland/irish-news/covid-19-nphet-recommends-state-moves-to-level-5-restrictions-for-four-weeks-1.4371810

https://corporatefinanceinstitute.com/resources/knowledge/finance/debt-service-coverage-ratio/

https://www.investopedia.com/ask/answers/102915/how-much-working-capital-does-small-business-need.asp