Non-bank lender Grid Finance passes €1bn mark in card payments

Grid Finance, a lender to micro and small businesses that earn income through card machines, said it has now processed more than €1 billion of card receipts on behalf of businesses after five years in this business.

The Irish non-bank lender has provided €65 million of cash advances over this time to customers, where repayments are based on levels of daily card receipts. Borrowers must sign up to use Grid’s platform to process card payments to secure loans.

Grid was set up in 2014 by Derek Butler, a PwC-trained accountant. While Mr Butler originally launched the firm as a peer-to-peer lender, he changed the business model in 2019 to source money from alternative asset managers, who now include UK-based Fasanara Capital and Thiele Capital Management in the US.

Domestic market

While Grid pioneered the cash advance model in the Irish market five years ago, it has since been joined in the market by UK-based firms YouLend and Liberis, whose home market is more developed for this type of financing.

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“Our customers trust us to manage their card receipts on a daily basis and after five years we have processed over €1 billion without issue,” said Mr Butler. “Our unique funding system provides quick access to the capital to grow your business while also providing customers the ability to repay daily a percentage of their card receipts. This means that their repayments are ebbing and flowing with their business, which is really important in the real economy where every day is different.”

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He estimates that Grid will provide €25 million of funding this year, rising to about €40 million in 2023.

“We’re seeing rising demand for our product, which is to be expected, given that we are in uncertain economic territory and Government supports during the pandemic have come to an end,” he said.

“There is a lot of anxiety out there heading into the winter, with companies in hospitality, in particular, worried about energy costs and how the Irish consumer is going to hold up in terms of spending. However, the supports offered to households and businesses in the recent budget have helped.”

Grid, where former Department of Finance secretary general John Moran is chairman, decided at a board meeting last week to maintain annual interest charges on its loans at 7 to 12 per cent, depending on the risk attached to customers, and will next review its rates early next year.