When a small business can’t get a loan, we tend to see it as a failure on their part. But it’s really the failure of a banking system that simply doesn’t support scaling businesses. When banks lend only to the most creditworthy businesses, what can we do? If you’re not ready or willing to pitch for external investment from angels or venture capitalists, there are still some alternative finance options you can explore, including P2P lending. Let’s look at the these in more detail.
Why are bank loans such a pain?
Pillar banks in Ireland treat every SME loan application like a potential disaster. Applications can take months to process and will require you to supply a mountain of paperwork. The heavy emphasis on property or asset-backed security excludes most businesses, especially in the service industry or for those early in their development.
A lot of this is down to a one-size-fits-all approach and aversion to any kind of risk. Traditional banks also lack flexibility in structuring loans to match the specific cash flow patterns or seasonal needs of different business types. Even through schemes like SBCI (see below), with its government guarantee, the same rigid criteria and lengthy processes persist.
Loan refusal rates for SMEs are currently somewhere north of 40%. I’d like to see an environment that better supports people willing to take the risk of starting or growing a business. More readily offering loans or investment – rather than grants – would go a long way to helping us build a more entrepreneurial culture in Ireland.
Peer-to-peer lending is an accessible alternative to bank loans
The Irish SME Association, ISME, reported at the beginning of 2025 that 11% of SMEs needing credit have availed of P2P funding. It’s one of the more accessible forms of funding and we have numerous clients who have successfully raised cash this way on our recommendation. These platforms handle all the legal contracts and payment processing, so you deal with them directly rather than managing relationships with multiple individual lenders.
Alternative funding options for businesses in Ireland
Jump to Linked Finance | Flender | Spark Crowdfunding | Grid Finance | Property Bridges | Microfinance Ireland | Credit Unions | Strategic Banking Corporation of Ireland (SBCI) | Other
Linked Finance – P2P and MCA
Linked Finance is Ireland’s largest peer-to-peer business lending platform. To date, they have lent over €360 million to nearly 5,000 Irish businesses nationwide. Irish SMEs can borrow up to €500,000 depending on the product.
- The Term Loan is an unsecured loan of €50,000 to €500,000 with interest rates starting at 6.95% and terms of six to 60 months. Use it for stock, vehicles, equipment, or working capital.
- The short-term, flexible Merchant Cash Advance (MCA) Financing starts at €10,000 with interest rates from 6% and terms of up to 12 months. Use it to buy stock, hire staff, upgrade equipment, and improve your premises. Repayments follow the pattern of your business, so you repay more at peak times and less if things slow down (see Grid Finance below as well).
- Business Finance with BillPay allows you to spread the cost of large one-off payments across a term of 12-months (the examples they give are an annual tax bill, commercial property tax, or insurance premiums). Loans start from €10,000 at 6.95%.
Applications to LinkedFinance are quick and you’ll get support from an advisor to go through the process. If you apply for less than €300,000, you will get a credit decision in just 24 hours and be able to access the funds quickly. Qulifying businesses must have been operating for at least 2 years and make over €100,000 in annual turnover. You will need to provide a personal guarantee regardless of the loan, but they don’t charge early repayment fees.
Flender – P2P
Flender is a peer-to-peer platform where your loan application becomes a funding campaign for individual investors to back. Once your business passes their credit assessment, your loan request goes live with details about your company and how you’ll use the funds. Individual investors then choose to fund portions of your loan until it’s fully subscribed.
You can borrow between €10,000 and €300,000 over terms up to five years, with interest rates ranging from 8.45% to 16.3% depending on your assigned credit grade. The loans are fully amortising with fixed monthly repayments collected by direct debit, meaning your interest costs reduce each month as you pay down the capital.
The application process focuses on demonstrating your business’s ability to service the debt rather than requiring extensive collateral. Once your loan campaign is fully funded by investors, you’ll typically receive the funds within 24 hours. With over 5,000 individual investors registered, Flender has lent over €77 million to date.
Spark Crowdfunding – equity crowdfunding
If dilution isn’t an issue, Spark Crowdfunding’s equity crowdfunding platform allows you to raise funds by selling shares in your business to a pool of investors. Rather than borrowing money that needs to be repaid, you’re offering ownership stakes to people who believe in your business’s growth potential.
Your fundraising becomes a campaign that runs for typically five weeks, during which accredited investors can purchase equity in your company. These investors are looking for businesses with high growth potential and expect their investment to appreciate as your business grows and succeeds.
You only pay Spark Finance‘s 7% fee if your campaign successfully raises funds, with no upfront costs. Beyond just raising capital, your investor base becomes a network of supporters who have a vested interest in your success. They often provide ongoing advice, connections, and can participate in future funding rounds as your business scales.
The process requires demonstrating your company’s growth potential and scalability to attract investors who are specifically seeking equity returns rather than steady interest payments. So your campaign needs to show how investors will see returns through share value appreciation or eventual exit opportunities.
Grid Finance – MCA
Grid Finance was a P2P lender but has pivoted to become a direct SME lender. They are essentially an MCA provider, although they don’t tend to use that term on their site. Because they collect repayments directly from your revenue stream, they’re essentially financing your working capital. This is a great financing tool for businesses in sectors such as retail or hospitality.
Grid Finance distinguishes between B2B and B2C companies but offers €10,00 to €500,00 and both the application and approval are very fast. You then start repaying on a daily basis; small flexible amounts that allow you to maintain your financial health.
- The B2C product: If you sell to consumers using card machines or online payment systems like Stripe, Shopify, or Deliveroo, Grid sets up a Smart Settlement Account where all your card payments land first. They automatically take a percentage of your sales to repay the advance, then send the rest to your business bank account – usually within half a day. When trade is quiet, repayments reduce automatically; when you’re busy, they catch up. You can see all transactions in real-time on their platform.
- The B2B product: If you sell to other businesses and get paid mainly by bank transfer or invoice, you connect your current account through Open Banking. Grid takes a flexible direct debit every day based on your 5-day rolling average turnover. This smooths out any irregular income patterns and means you pay less during quiet periods and more during busy times. You can see upcoming repayments for the next three business days on your dashboard.
N.B. if an MCA sounds like a good fit, you can explore UK-based options too. Here in Ireland, though, the main MCA solutions come from LinkedFinance and Grid Finance.
Property Bridges – P2P (sector-specific)
For construction companies and developers, the more niche Property Bridges connects individual investors with property development projects. They offer bridging, refurbishment, and development finance from €500,000 to €10 million at rates around 7% over Euribor, lending up to 70% loan-to-value or 85% loan-to-cost.
The platform requires you to operate as a limited company with full planning permission in place, a clean title allowing first charge security, and a defined exit strategy for your project. Your loan application then becomes a funding opportunity that investors can back through the platform. Once approved and fully funded by investors, you can draw down funds flexibly to match your development timeline, paying interest only on amounts drawn.
Property Bridges provides ongoing project monitoring throughout construction, visiting sites regularly to ensure works progress as planned. This hands-on approach helps reassure investors while supporting borrowers through the development process. Property Bridges has funded almost €100 million into Irish construction projects since 2018, focusing on practical lending decisions over traditional banking barriers.
Microfinance Ireland – business loans
Microfinance Ireland is a not-for-profit lender backed by government funding. They serve businesses starting up, expanding, or facing temporary difficulties where banks have said no. Their offering is straightforward: unsecured loans from €2,000 to €50,000 at a fixed 6.5% interest rate. If you apply through your Local Enterprise Office (LEO), you get a 1% discount, bringing the rate down to 5.5%.
Loan terms are typically three years with monthly repayments, and there are no additional fees or charges. You’re eligible if you’re a microenterprise with fewer than 10 full-time employees and annual turnover under €2 million. Sole traders, partnerships, and limited companies can all apply, and they support both startups and established businesses.
Part of your application will be submitting a business plan demonstrating you have a commercially viable venture. This is vital so that Microfinance Ireland can understand your business proposition and viability rather than demanding extensive collateral or perfect credit histories. Customer feedback consistently mentions their understanding approach and willingness to listen to individual circumstances.
Once they receive all documents, you’ll have a credit decision within 10 working days. The maximum loan amount of €50,000 means this isn’t suitable for larger funding needs, but for smaller businesses needing working capital, equipment finance, or startup funding, it offers competitive rates without the barriers typical of mainstream lenders.
Credit Unions – business loans
Credit unions are an often-overlooked financing option for Irish SMEs, though availability varies significantly between different credit unions. Many don’t offer business lending at all, while others have developed comprehensive SME loan products. First Choice Credit Union is one example. They offer unsecured business loans up to €75,000 at 6.55% variable rate, and secured loans from €50,000 to €300,000 at 5.25% variable rate.
Credit unions typically require you to be a member before applying for business finance, which means opening a savings account and demonstrating some connection to their common bond – whether geographic, occupational, or social. For loans over €25,000, you’ll need a business plan, and larger secured loans require property or substantial assets as security.
The application process involves meeting face-to-face with credit union staff rather than online applications. This can be advantageous for businesses that benefit from explaining their circumstances in person, but it’s also more time-intensive than digital-first lenders. While credit unions typically offer smaller loan amounts than banks advertise, their willingness to actually lend often makes them more accessible for SMEs.
Strategic Banking Corporation of Ireland (SBCI) – credit guarantees
Last, but by no means least, are the various credit guarantee schemes on offer through the SCBI. These risk-sharing products (either with the Irish government or European institutions) have improved access to loans and come with rock-bottom interest rates (subsidised below normal commercial rates) and great repayment terms.
The money doesn’t come from SBCI itself but from lenders such as banks, credit unions, or non-banks like Finance Ireland. You first check your eligibility for currently open schemes through the SBCI Hub and, once you receive confirmation, present it to a participating lender as part of their credit application process.
While you still need to meet the lending criteria of your chosen institution, the government guarantee of 80% reduces the lender’s risk, potentially making them more willing to approve borderline applications. Current loan products offered by SBCI include Green Transition Finance, Term Loans, Growth and Sustainability Loan Scheme.
Other forms of alternative finance
Beyond the platforms and lenders covered above, several other alternative finance options exist for Irish SMEs with specific needs. Invoice finance and factoring companies can unlock cash tied up in outstanding invoices, providing immediate working capital based on your sales ledger rather than traditional lending criteria. Equipment finance and leasing specialists offer dedicated funding for machinery, vehicles, and technology purchases, often with more favourable terms than general business loans since the equipment itself serves as security.
These specialised providers typically understand their sectors deeply and can structure deals that banks might find too niche or complex, making them worth exploring if your funding needs align with their particular expertise.
Plan ahead and find the right funding solution for your business
Before approaching any lender or platform, take the time to develop a clear business plan that explains not just how much money you need, but exactly what you’ll use it for and how it will generate returns. This clarity is essential for most applications, but more importantly, it helps you choose the right type of finance.
Work with a trusted advisor to understand whether you’re facing a temporary cash flow squeeze that just needs bridging, or whether you’re funding growth that will generate additional revenue. Short-term liquidity issues might suit merchant cash advances or invoice finance, while equipment purchases work well with asset-based lending, and major expansion might justify longer-term loans or even equity investment.
Knowing your specific need, and your ability to service different types of finance, will help you target the most suitable option rather than simply applying wherever rates look cheapest. The alternatives to traditional banks are more varied than ever, but they each serve different purposes and business situations.
