Accelerated Payments, an invoice financing firm, is planning to quadruple the size of its loan book by the end of next year as it looks ahead to an upcoming Series B funding round.
The Dublin-headquartered fintech was founded in 2017 by Ian Duffy, a serial entrepreneur and investor, and now has secondary offices in London and Toronto.
It buys invoices from SMEs which need credit quickly and often can’t get it from banks unable or unwilling to offer them advances.
As part of its model, Accelerated Payments evaluates the debtors of the small businesses that sign up. Then, if approval is granted, the SME can select which invoices it wants advance funding on, while the debtor pays Accelerated Payments back on the due date.
Accelerated Payments makes 80 per cent of the invoice value immediately available to its SME customers, with the remainder paid through when the debtor settles the invoice.
In a market where banks are often conservative with the credit they’re willing to give small businesses, the company believes its model captures a niche in the market that was previously poorly served.
Over the last four years, it has handled around 30,000 invoices, and more than €350 million has moved through its platform.
With 30 employees across Ireland, Britain and Canada, and tens of millions in debt funding lines from institutions in Europe and America, it is hoping to achieve rapid growth.
While the pandemic proved challenging, Duffy said Accelerated Payments weathered its worst effects and managed to grow its business over the last 12 months.
“That’s testimony to us for being able to get that growth,” he said, adding that many other funders had struggled amid successive economic shutdowns globally.
Now, with business picking up, he said Accelerated Payments expected to double the size of its loan book from €35 million to €70 million by the end of 2021. The following year, it plans to double the book once again.
Key to the success of the firm, Duffy said, had been its decision to place 95 per cent of the credit risk in the hands of the debtor, rather than the SME awaiting the payment of an invoice.
“Existing invoice financing companies don’t really apply that model,” he said. “They really look to the underlying strength of the client, or the SME, which again brings you back to the same problem: what happens if that SME doesn’t have a perfect credit rating, and doesn’t have loads of cash on its balance sheet?”
Most small businesses don’t fit this criteria, meaning they can often struggle to get the cash they need to fund growth or the continued operation of the business.
“We like fast-growing companies. We love Irish companies that are trying to export and grow their business internationally, and we want to support them,” Duffy said.
The long-term plan for Accelerated Payments is to grow its loan book to €1 billion. He said the company was in talks to establish partnerships with a number of banks across Ireland, the US and Canada.
“Instead of seeing the banks as competition, we see them as partners,” said Duffy, a Dublin native who has previously worked with Grant Thornton, as well as serving as chairman of several start-ups.
From the start, the business has prioritised international growth, cognisant of the relatively small market for credit in Ireland.
But Duffy, a finalist in this year’s Enterprise Ireland Founder of the Year competition, said Accelerated Payments had remained true to its founding principles despite the growth it had enjoyed.
Working with SMEs, he said, was the “best part” of the business. “You’re getting businesses the funding that they desperately need – really good companies, which are good at what they do,” he said.
“It’s really exciting to see some of the businesses that we’ve been funding for three years, to see how they’ve grown and developed with our support.”