The Paypers

The Irish Asset and Invoice Finance Association (IAIFA) published its 2019 results. These show that 1,600 small and medium-sized enterprises (SMEs) used EUR 28.6 billion in invoice and other asset-based financing in 2019. These SMEs have nearly EUR 1.5 billion drawn down from their invoice-secured credit lines, with the potential for up to EUR 2.7 billion in such borrowing approved. Invoice-based finance amounts to a revolving credit facility in which the lender advances funds to the company based on the size of their debtor books and collects that income, plus interest, as invoices are paid into a lender-controlled account.

Invoice financing is growing as an option for SMEs to use in place of, or alongside, their usual credit facilities. It can be quicker to access than traditional loans and cheaper than overdrafts, offering interest rates of between 3% and 6%, according to independent.ie. IAIFA’s members include the commercial lending units of three pillar banks - AIB, Bank of Ireland, and Ulster Bank - as well as Bibby Financial Services, Capitalflow, Close Brothers, and Grenke Finance.

Invoice finance demand to surge after lockdown