A new financier will offer €300 million in funding to Irish SMEs

NEWLY ESTABLISHED FINANCIER Capitalflow will offer €300 million in funding to Irish SMEs.

The company, which is backed by London private equity firm Pollen Street Capital, said it has already provided one-sixth of that amount to 230 businesses since it started operating six months ago and it was planning a new suite of products next year.

Capitalflow currently offers a range of alternative finance options outside traditional bank lending – including asset finance to cover equipment purchases, and invoice finance, where a business effectively on-sells its own invoiced trade.

The Dublin-headquartered firm was set up by Harry Parkinson and Ronan Horgan, the former managing directors of two rival finance providers, Close Brothers and Bibby Financial Services.

Parkinson, Capitalflow’s CEO, said the financier would bring more competition to the Irish market. The company said it also has plans to roll out extra products next year and add to its current staff of 25.

“In the past, Irish businesses were very dependent on traditional banks for finance, but this has changed as new and more flexible options are introduced on the market,” he said.

Bank dependency

Irish SMEs are significantly more reliant on bank loans than those in the UK and are also above the EU average.

The state-backed Strategic Banking Corporation of Ireland has also partnered with a series of on-lenders for SMEs, including a €45 million invoice financing fund from Bibby Financial Services Ireland.

Pollen Street Capital started out as the Royal Bank of Scotland’s private equity arm, however it was relaunched as a spin-out business in 2014.