SIX YEARS ago when Xpert Taxis was established, the three main banks in Ireland were happy to lend the company more than €1.5 million.

By 2009, the firm had been transformed from a start-up into a thriving business, servicing most of the major companies in Dublin, and was seeking finance to enable it to relocate to a larger premises.

Due to the nature of its business, an investment in a state-of- the-art phone system – costing €52,000 – was also necessary.

However, when chief executive Vinny Kearns approached the company’s lenders, he was told Xpert Taxis would have to place a sum on deposit equal to the amount it wished to borrow.

This was despite the fact that the company had proven its ability to meet all its previous repayments on time and had cleared down its original debts.

“That was our first experience of finding it difficult to raise finances,” Kearns says. “Basically if you hadn’t got money on deposit to cover the borrowing, you faced difficulty.

“The ironic fact is that when we borrowed €1.5 million there was no security. It was all debt.”

Kearns, who has served as a ministerial adviser to the commission for taxi regulation in the past, says he understands the problems facing the banks.

“I understand, but it doesn’t make me less angry. What’s happening is that the banks no longer know their customers. One rule applies to all.”

In the end, Xpert Taxis (which now employs about 600 people) had to think outside the box in order in order to finance the “mission critical” phone system.

Kearns approached the equipment supplier, who told him that almost all of its customers were encountering similar problems, with nine out of 10 applications for bank funding being turned down.

He succeeded in negotiating an agreement with the supplier whereby Xpert Taxis was able to spread the cost over two years, making 24 interest-free monthly payments.

The fit-out of the company’s new premises ended up being self-financed. After looking at the lending rates that the banks were offering, the board of Xpert Taxis decided the only viable course of action was for the directors to finance the investment.

If they had not been in a position to do so, “we wouldn’t be in business today”, Kearns says.

When it comes to accessing finance in excess of the company’s overdraft facilities, he adds that he might not even consider approaching banks in the future.