Lender Linked Finance agrees funding deal with Eiffel

Liquidity boost helps Irish firm’s plans to be biggest non-bank lender to SMEs

Linked Finance’s  plan is to have lent more than €350 million to SMEs by 2020. Photograph: Getty

Linked Finance’s plan is to have lent more than €350 million to SMEs by 2020. Photograph: Getty

 

Irish peer-to-peer lender Linked Finance has agreed a deal with Paris-based Eiffel Investment Group that will boost its access to funding as it seeks to become the biggest non-bank lender to SMEs here.

Eiffel has agreed to contribute up to 20 per cent of funding for new loans listed on Linked Finance’s platform.

The French company’s online lending team has been involved in the space since 2011 and currently manages close to €200 million for several multibillion institutional investors across a range of leading peer-to-peer platforms, including Lendix in France and Funding Circle in the UK.

The deal will run for an initial two years but is expected to become a longer-term arrangement.

This will boost liquidity on Linked Finance’s platform, which has provided loans to more than 700 Irish SMEs since its launch in 2013.

The company lent €10 million in 2016, up 94 per cent on a year earlier. It posted strong growth in the final quarter, with lending up 158 per cent following the introduction of a new fixed-rate loan.

Linked Finance has doubled in size each year for the past three years. Its plan is to have lent more than €350 million by 2020, thereby becoming the country’s biggest source of non-bank SME finance.

Niall Dorrian, Linked Finance’s chief executive, said the deal was a “vote of confidence” in its business model. “Eiffel monitors over 100 lending platforms worldwide. They know the industry well and what it takes to succeed,” he said.

“A diverse funding mix is important for our long-term development. Eiffel’s support will complement our existing lenders, ordinary members of the Irish public, who will still continue to play a crucial role in helping us to fulfil our mission of providing fast and affordable finance for Ireland’s SME sector.”

Commenting on the agreement, Etienne Boillot, chief executive and co-founder of Eiffel eCapital, said: “In Linked Finance, we have identified a leading player in the Irish market and a business that we are confident will deliver on its ambitious expansion plans. As institutional investors, we not only bring more liquidity to the market, but also more confidence in this method of fundraising, which should help attract more SMEs to borrow and more retail investors to lend, a win-win for all involved.”

Linked Finance recently completed Ireland’s biggest peer-to-peer loan, raising €250,000 in two tranches for serviced office and flexible workspace provider Iconic Offices. The loan was funded by Eiffel eCapital alongside more than 400 individual lenders.

Linked Finance connects local businesses who need loans with an online lending community, comprising members of the public, institutions and other investors who are willing to lend to Irish SMEs at attractive interest rates.

Eiffel was set up in of 2008 as the asset management division of the Louis Dreyfus Group and spun-off in mid-2011. It has assets under management of more than €700 million.

Eiffel eCapital, led by Mr Boillot, is its alternative lending arm. Eiffel’s online lending activity is backed by several large insurance companies including Aviva France, and AG2R La Mondiale.