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Irish SMEs with turnover of less than €500,000 witness 50pc increase

Irish SMEs with turnover of less than €500,000 witness 50pc increase

DUBLIN: The amount of money raised by Irish Small and Medium Enterprises (SMEs) through invoice finace has risen by 50 percent more money whose annual turnover were more than €500,000 in the third quarter of 20-14.

The data comes from the Asset Based Finance Association (ABFA). Invoice finance usually works by having the finance provider purchase the client’s outstanding invoices for an upfront payment, with another payment made once the invoices are paid off.

Demand for invoice finance has been fuelled in part by constraints on traditional lending, ABFA chairman Eddie Brown said.

SMEs with a turnover of less than half a million euro raised €152m in invoice finance during the third quarter, up from €101m in the second quarter.

“We still have a significant amount of unused funds available that companies all over Ireland could be accessing,” Mr Brown said.

A report released by the Central Bank showed that annualised gross new lending to SMEs increased from €1.9 billion at the end of the last quarter of 2013, to €2.1bn at the end of the second quarter of 2014. In 2011 the figure was close to €2.25 billion.