There have been many challenges facing industry and the economy in recent times with some companies needing to seek outside advice and financial help.
And while the traditional methods of sourcing capital are still very much in existence, an increasing number of businesses are turning to Asset-Based-Finance (ABF). Though it has only been in business since January 2016, Capitalflow has become an important leader in this field.
Since its inception, the company has put together a highly experienced team of specialist lenders to Irish SMEs and to date has advanced facilities of over €550 million to business customers through its specialist lending products, equipment and vehicle leasing, property finance and invoice discounting.
The company has been allocated an initial €31m in low-cost Covid-19 Credit Guarantee Scheme funding for SMEs, primary producers and small mid-cap companies with employment of up to 499 people which have been impacted by Covid-19. The scheme, made available by the Department of Enterprise, Trade and Employment and operated by the Strategic Banking Corporation of Ireland, is a financial solution which will see Capitalflow backing businesses to fuel the economic recovery.
John Mackey, head of sales for Asset Based Lending, says: “Even though Covid-19 hit us, like all businesses, out of the blue, Capitalflow was able to react quickly, and switch to remote working within days and quickly turn its focus to reaching out to its customers and to listening to how they were being affected.
“We really showed our agility as a company in how quickly we reacted, and this allowed us to get an early start in supporting business owners throughout this unforeseen pandemic journey,” he said. “And luckily for us, we had already embarked on a digital transformation of our operating model before Covid-19 hit, so we were in a strong position to accelerate this.
The ABL expert says while some sectors have been hit very hard by the pandemic, some of Capitalflow’s customers are continuing to trade well in sectors such as construction, distribution, medical, property and services.
“We see many businesses pressing pause on making any big business decisions, as uncertainty still remains in the marketplace,” he said.
“We also see that the utilisation of our facilities and those of other ABL providers in the market has decreased, in part due to turnover decreasing, but also due to government supports such as the warehousing of revenue liabilities and the wage subsidy scheme.
“However, as we come out of the Covid-19 experience, and as the economy returns to more normal trading conditions, businesses will need cash to fund growth opportunities. This is where we see a real demand for asset-based lending products.
“Asset-based lending is perfect for businesses looking to fund management buy-outs, or mergers and acquisitions and we are expecting to see a significant increase in this type of activity this year.”
And although Ireland is far from out of the woods yet with regard to the current global pandemic, green shoots are beginning to emerge, and Capitalflow is looking towards a bright future.
“We are delighted to announce the launch of our new product to the market this week,” said Mackey. It is called Single Invoice Finance [SIF], and is a working capital facility which allows businesses to raise finance against individual unpaid invoices.
“We have created the product in response to demand in the market for a more flexible working capital facility which allows businesses to raise finance funded against individual invoices. Although the basic principles are the same, unlike traditional Invoice Discounting facilities, the business does not have to finance its entire sales ledger book.
Now, through a SIF facility, clients will be able to access funds as and when their business requires an injection of cash by using the facility on an invoice-to-invoice basis. And the benefits of this for companies is that it allows you to pick and choose what invoices are funded through the facility to match their specific cashflow requirements.
So it is incredibly flexible, the business does not get locked into any long-term agreements, and there are no fees for when you wish to exit the facility.
It really is an excellent way for businesses to quickly release fast cashflow as needed, and it is all done electronically via our digital systems without any hassle or onerous paperwork.”