Linked Finance: peer-to-peer business loans of €10,000 to €500,000

The three loans on offer

A term loan can pay for stock, working capital, vehicles, equipment or fitting out a premises. BillPay is for one large bill, such as an annual tax bill or an insurance premium, spread over a year.

A cash advance is repaid out of each day's card takings, so it only suits a business that takes card payments. We explain how a merchant cash advance differs from a term loan.

What it costs

The FAQ gives the interest range as 7.20% to 17.25%. The rate is fixed for the life of the loan. It depends on the term and on the grade Linked Finance's credit team gives your application. A+ is the lowest risk. A Y grade is for a business trading less than 24 months.

Two product pages advertise lower starting rates: 6.95% for a term loan and 6% for a cash advance. The rate that counts is the one on your loan offer. You can check the monthly repayment at 7.20% and again at 17.25% to see the spread.

There are two fees, and both are deducted from the loan before it is paid out:

• Application fee: €125.
• Completion fee: up to 6% of the total loan. At the full 6%, the fee on a €50,000 loan is €3,000.

If you accept a loan offer and then do not take the loan once it is fully funded, you are still billed for both fees. A missed payment costs up to €40.

You can repay early at any time with no early repayment fee. You pay the capital still owed, the interest to the end of that month and a €2 rounding charge.

Who can apply

• A limited company registered with the Companies Registration Office, with accounts filed.
• A sole trader who lives permanently in Ireland. Business and personal spending must run through separate bank accounts. If they are mixed, Linked Finance wants to see six months of business-only transactions first.
• A partnership with a permanent place of business in Ireland, where at least half the partners live in Ireland.
• Annual turnover over €100,000.
• The business passes Linked Finance's credit and fraud checks.

The minimum trading time is not the same on every page of its website. The FAQ says 12 months for a term loan or BillPay loan and 6 months for a cash advance. The product pages and the terms and conditions say two years. Ask which applies to you before you apply.

Who cannot apply

Start-ups cannot borrow from Linked Finance. Neither can a business with turnover of €100,000 or less, or anyone borrowing as a consumer.

A new or smaller business can look at the State lender that takes start-ups and firms with fewer than 10 staff. Our loan finder shows which lenders' published rules fit the amount you need and how long you have traded.

What you have to send

• Business bank statements for the last six months. You can share them through open banking or upload them.
• The two most recent years of filed accounts.
• Tax clearance details.
• For a cash advance, two months of merchant card statements.

Linked Finance may also ask for management accounts or proof of contracts. A business plan is not on its list. Once a loan is approved, each owner sends photo ID and proof of address.

How it works, step by step

1. Fill in the online application. Linked Finance says it takes about two minutes.
2. A lending specialist phones you about the business and its figures. Have your latest accounts to hand.
3. Send the documents. A credit decision typically follows within one working day.
4. If you are approved, you receive a loan offer showing the grade, the interest rate, the monthly repayments and the fees.
5. Your loan request is published on the Linked Finance website and lenders bid to fund it. If it reaches at least 75% of the amount by the end of the bidding period, the loan can go ahead for that amount.
6. You have five working days to sign the loan contract electronically. The money, less the fees, is sent to your bank account.

Linked Finance says funds are typically ready within 24 hours of the request going live. This varies with the size and length of the loan.

What to know before you sign

• Personal guarantee. All three products require one. Directors or shareholders of a company can be asked to guarantee the loan personally.
• Your request is public. Details of your business and its loan grade are shown on the Linked Finance website so lenders can decide. The terms also let Linked Finance use that information to promote your request.
• No way back after signing. The terms say that once you sign the loan contract you cannot withdraw from it.
• Missed payments. Linked Finance tries to collect a second time. If that fails, the debt can go to a collection agency, and continued missed payments can end in legal proceedings.
• A second loan. You can apply again once the first three monthly repayments have been made.

We take no commission or payment from any lender. This page is information only, not financial advice.

Common questions