Irish P2P platform calls for more government support for SMEs
Alternative lenders should be included in the delivery of the Irish government’s lending support for small- and medium-sized enterprises (SMEs), peer-to-peer platform Linked Finance has claimed.
The Irish platform said that it is vital to ensure funding is deployed rapidly, and that this will be helped by leveraging the strong SME relationships held by several non-bank lenders.
Linked Finance said the Irish government’s existing capital guarantee and Covid-19 working capital schemes have good intentions, but are not delivering at the scale required.
By the end of last week only €11m (£9.6m) of the €200m first tranche allocated under the Covid-19 working capital scheme had been awarded, with just 56 companies having loans approved over seven weeks since its launch on 10 March.
As well as calling for more alternative lenders to deliver the schemes, Linked Finance wants the excessive administrative burden required of firms to be cut, and the Irish government to increase its guarantee in the loans.
In the UK, the British Business Bank announced that it is automating systems to quicken the roll-out of the government’s coronavirus business interruption loan scheme and the government has increased its guarantee, launching a 100 per cent state-backed Bounce Back Loan scheme for smaller businesses.
“The clock is ticking for Irish SMEs and it’s vital that the government moves quickly to expand the lending support it can provide,” said Niall Dorrian, chief executive of Linked Finance.
“Alongside an expansion of capital guarantees should also be the broadening of the channels through which funds are offered to include lenders like Linked Finance.
“We have the intimate understanding of, and relationships with, SMEs to ensure that funds are deployed rapidly and to the right place.
“Across Europe we are seeing governments providing much higher levels of support than is available in Ireland, which in the short-term will play a crucial role in getting the wheels of business turning again as those countries emerge from the current lockdown phase of the crisis.
“Ireland needs to ensure that it too is similarly well-placed.
“There is a danger that understandable efforts to ensure public money is not misspent, have created layers of complexity that destroy the value of the schemes currently in place.
“Now is the time for a forceful and wide-ranging response to support an SME sector that provides over two thirds of the jobs in our economy.”
During the pandemic Linked Finance has offered all borrowers a two-month payment break and launched a deferred start loan for businesses hit by the coronavirus.
