Linked Finance plans sharp increase in lending

Peer-to-peer lending platform aiming to lend more than €100m next year

Peer-to-peer lending platform Linked Finance said it plans to boost lending next year by 25 per cent over its 2024 targets.

That will see it lend €100 million over the year, up from the €80 million in loans it expects to issue this year, and €59 million in 2023.

The forecast comes as the lender said it sees business growing 35 per cent annually.

The company, which offers an alternative to banks, said more than 4,200 SMEs here have availed of funding through it to date. In 2013 when Linked Finance launched, the average loan issued by the company was €18,000; that has now risen to €115,000.

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The firm said its average long-term default rate is 1.5 per cent, which it said typically aligned with the national economic trends.

“Since 2020, our default rate has remained relatively stable, thanks to the Government’s support programmes during the Covid-19 pandemic and the subsequent inflationary pressures,” the company said. “Even as these measures have been phased out, we have not observed any significant increase in defaults. However, we continuously monitor this performance to adjust our risk appetite if there are signs of rising arrears or defaults in the economy.”

Linked Finance said it had not seen any significant increase in arrears this year, with the potential effects of the end of Government supports, such as tax warehousing, not yet evident in its performance metrics.

It has also reached €300 million in loans issued to Irish small and medium-sized enterprises.

“Surpassing the milestone of €300 million in lending is a testament to the resilience and innovation of Irish SMEs, as well as the trust and confidence placed in Linked Finance as their preferred lending partner,” said company chief executive Niall O’Grady.

Among the companies that have raised funding through Linked Finance in the past are the Rolling Donut, Kokoro Sushi Bento, Murphy’s Ice Cream, and the Irish Fairy Door Company. In 2022, the company said it saw strong demand across retail, transport and construction as it introduced its new merchant cash advance and increased the maximum loan size to €500,000. That was replicated last year, with the top industries seeking loans including wholesale and retail, construction, manufacturing and the hotel and hospitality sector.

Ciara O'Brien

Ciara O'Brien

Ciara O'Brien is an Irish Times business and technology journalist