Capitalflow, a Dublin-based commercial lender founded by Harry Parkinson last year, has announced a new €300 million fund to help finance Irish small and medium-sized businesses.
It has already provided €50m to some 230 Irish SMEs in the past six months.
Parkinson formerly led Northern Bank's Belfast invoice finance operation in Belfast, before estalishing Close Brothers Commercial Finance in 2007. He established Capitalflow in November 2015, with a team of 25 now in place. It is backed by private equity firm Pollen Street Capital.
Capitalflow's pledge comes as the European Investment Bank considers whether to part-finance the investments of companies with fewer than 3,000 employees from various sectors in Ireland and the UK.
Speaking on Breakfast Business, Capitalflow MD Ronan Horgan said:
"We're delighted to be announcing this because we feel there's a real gap in the market, particularly for small businesses out there who are looking to finance their business and grow their business as the economy is growing...
"Really the DNA of the team and the business is all about relationship banking."
Horgan stressed that Capitalflow wants to foster long-term relationships with SMEs.
"If you can imagine a small business out there today," he said. "They have assets, they have property, they have stock, they have equipment, they have trucks. All of those assets – that's what we finance. And we not only finance new assets, we also finance second-hand assets.
"So last week, for example, we financed a mobile crushing machine. It cost about €600,000. This week we’re going to finance a coach that's 10 years old. We'll also do confidential invoice discounting, we'll do property financing, we’ll do stock financing... So we do a range of different products, all suited towards small and medium-sized businesses."
Horgan noted that there's "definitely" an audience for this type of funding, and outlined how Capitalflow aims to be different.
"It's all about going back to the old-style bank manager who used to call out to the business owner, kick the tyres, listen to his plans and put in place a credit proposal that was viable for that business.
"We'll make a credit decision within three or four working days and we'll get the cash out. I mean, if you call to us today, we'll probably get approval to you by Wednesday and probably get the cash out to you by Friday.
"That's not happening in the market. So there are a lot of funds out there at the moment, a lot of finance out there. But if it takes you five or six weeks to get a decision – and that decision could be 'no' – that’s really costly to business.
"You see the Small Firms Association, you see ISME, they're all talking about having frontline people who can make credit decisions. Make business decisions. And that's what Capitalflow do."
Capitalflow is also looking to talk to businesses who are now in vulture funds "through no fault of their own":
"We're very happy to talk to them as well, because they probably are very good trading businesses but perhaps were over-exposed to the property market.
"So unlike banks or other financial institutions, we're willing to look at clients that maybe have had poor repayment history previously but in the last couple of years have now started to get their businesses on an even keel. We're happy to support them."
