Linked Finance offers new loan for SMEs disrupted by coronavirus

25 Mar 2020

From left: Linked Finance CEO Niall Dorrian and Iconic Offices CEO Joe McGinley. Image: Linked Finance

The Deferred Start Loan is part of Linked Finance’s package to help Irish SMEs struggling during the coronavirus pandemic.

This week, Linked Finance launched its new Deferred Start Loan for businesses disrupted and affected by the coronavirus outbreak. The peer-to-peer (P2P) lending platform issued its first loan under the scheme on Monday (23 March).

With the new loan, Linked Finance is lending up to €100,000 on a 15-month plan, which does not require any payment for the first three months. The repayments are made in 12 monthly instalments after these first three months, during which no interest or capital repayment will be paid.

Future Human

The Dublin-based firm, which was set up in 2013, said the loan is aimed at businesses that need working capital at a time of reduced cashflow, as well as SMEs moving fast to “adapt to the new normal” by investing in online services, buying delivery vehicles or paying for equipment to get staff up and running while working from home.

Backed by investors

In a statement, Linked Finance said that the first loan was funded immediately by investors who are “keen to back Irish SMEs at this time”.

The company added that the process of applying for the loan is the same as applying for any other loan from Linked Finance, with businesses filling in an online form and providing the relevant financial documents.

The necessary documents include two years of full accounts, six months of bank statements and a tax clearance certificate. “There are no assets secured against the loan so also no legal hurdles or fees involved, and early repayment can be made without penalty,” the company said.

Linked Finance is also offering financial supports to existing borrowers during the coronavirus pandemic. The lending platform said that it has applied a blanket two-month payment break to all of its loans across the restaurant, bar, pub and hotel trades.

It also announced repayment flexibility on existing loans for businesses in other sectors, and is willing to consider a break in the repayment schedule of three months in some cases.

Support for SMEs

The company called on the Irish Government to work with P2P lenders and finance providers to create channel of support for SMEs.

Niall Dorrian, CEO of Linked Finance, said: “This is an extremely difficult time for many Irish SMEs, but we want to send a message that there are sources of financial support available that can be accessed quickly and easily.

“The new Deferred Start Loan we have launched allows companies access to much needed capital, whilst being able to delay repayment of interest and principal for the first three months. This is part of a package of measures Linked Finance has introduced to support businesses in every country of Ireland who are facing unprecedented challenges due to the coronavirus.

“We hope the Government will consider our sector as a key channel that can be used to quickly deploy support to help SMEs that are the lifeblood of employment throughout the country.”

According to the lending platform, it has provided loans totalling more than €130m to around 2,500 local businesses across Ireland over the last seven years.

Kelly Earley was a journalist with Silicon Republic