SME lender Flender restructuring debt to erase parental and Revenue liabilities

Non-bank firm backed by main finance provider and is in talks with two other potential sources of funds, according to documents

Flender Ireland, the finance provider that has lent €60 million to small businesses since 2016, has entered into the State’s “examinership-light” debt restructuring process as it looks to erase up to €4.2 million owed to its parent and Revenue.

The company started of in the peer-to-peer lending market but now sources funds from institutional investors. Flender acts as an intermediary and charges a 5 per cent commission for loans set up through it. The loans remain on the books of the actual lenders and are not affected.

Creditors were informed on Friday that Brendan O’Reilly, an insolvency expert with Interpath Advisory (Ireland) has been appointed to oversee the Small Company Administrative Rescue Process (Scarp).

Scarp, introduced in 2021 to help small, insolvent firms restructure, is significantly cheaper and less bureaucratic than a court-supervised examinership.


Flender’s parent, NKK Finance, was set up in the UK by Estonian native Kristjan Koik and originally aimed to enter peer-to-peer lending in that market. Also known as crowdfunding, this is a practice where finance for a project or a venture is raised in small amounts from a large number of people.

However, NKK subsequently decided to focus on the Republic. It incorporated Flender in 2014 to house the Irish business, which started lending in 2016. Mr Koik exited both companies in late 2020.

NKK raised €7.9 million over the years by way of equity, convertible loan notes and convertible preference shares to fund the Flender business. It counted Enterprise Ireland and former Ireland rugby international Jamie Heaslip among investors.

NKK has begun discussions with its own investors, which are likely to lead to losses.

Gerry Jennings, a financier and former banker, who joined the boards of both companies in 2018, is the sole director of Flender and instigated the restructuring. Bryan Carroll, a former Bank of Ireland executive who founded a digital bank in Vietnam in 2019, has been lined up to become chairman.

Flender resolved earlier this year to exit peer-to-peer lending to focus on institutional funding after the Central Bank decided that crowdfunders needed to be authorised.

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Institutional providers of finance to non-bank lenders have tightened lending and hiked rates in the past 20 months, amid market nervousness about the global economy and the pace at which central banks have moved to increase rates to fight inflation.

However, Flender’s traditional main finance provider, a European fund, recently agreed a new funding arrangement, according to the Scarp documents.

Flender, which employs seven staff, down from a peak of 15, is also in talks with two other potential finance providers. However, it believes these “would be reluctant to place new loans via a platform operated by an insolvent company”, the documents said.

The company says it is “confident of developing new funding partners” after a debt restructuring, as demand for credit from SMEs “remains strong” against the “backdrop of sustained pillar bank retrenchment”. Its low loan default rate, at 1.8 per cent, “is also attractive to funders”, it said.

The Scarp aims to fully write down €3.5 million owed to NKK and deal with €700,000 of warehoused taxes owed to Revenue.

Joe Brennan

Joe Brennan

Joe Brennan is Markets Correspondent of The Irish Times