“We live in turbulent times” as the saying goes – and if the last few years is anything to go by, this saying feels very real.
A decade climbing out from our crash, property valuation challenges, lack of liquidity and finance in the market – our economy has shown a remarkable capability to recover – supported by low interest rates and a relatively benign lending market.
The last two years during the pandemic created all sorts of new challenges – changing customer behaviours, changing purchasing habits; some sectors flourishing, and others brought to the brink of disaster. But our economy recovered through late 2021 in a remarkable way.
No sooner than these fast-growing green shoots of normality returned, war in the East has created more uncertainty. Almost hyperinflation in our energy costs, general cost increases; driving interest rate increases and uncertainty.
Minding the balance sheet and cash will again be the name of the game and better use of finance (leases and purchases) on fixed rates will help to navigate through the uncertainty of the next couple of years.
Over the last decade, the non-bank lending sector in Ireland has emerged as an import source of liquidity for retailers – fitouts, refrigeration, EPOS, Cash Handling systems. Much of which has been funded by the non-bank or so-called alternative lenders. This cohort offer flexibility and speed of decisioning to support many sectors including retail to adopt new approaches and supporting efficient retail technologies – in a climate where staffing has been difficult to find. These alternative non-bank lenders offer fixed rate leases and hire purchase products enabling surety of costs over the lifetime of an asset.
However, increased costs of wholesale funds for the non-bank lender are finding its way to the end customer which will either 1) reduce available liquidity /lending or 2) increase the costs of finance for the retail owner.
Capitalflow – Retail Equipment Finance
So, how can Capitalflow help in these times? Founded in 2016, Capitalflow has become an important lender in the Irish market with over €800m lending to-date. Offering retail equipment finance - leasing and hire purchase products - to retailers and suppliers, it supports the sectors with competitive fixed rate finance over flexible terms. Capitalflow finances key retail assets across POS systems, digital display, cash collection solutions, refrigeration and all the elements needed to operate a successful retail experience.
Capitalflow Retail Partner Premium Cash Solutions (PCS), provide Cash Handling and Cash Management Solutions for the retail industry across the island of Ireland.
"We have worked with Capitalflow over the last three years to source finance for our customers who ask us for a recommendation. Our customers experience a quick turnaround decision from Capitalflow and they are flexible on terms are easy to deal with. We are now using their New Digital Portal which makes the process even more seamless and efficient, a refreshing approach to doing business" - Aidan Comerford, Director PCS
In 2021, Capitalflow was acquired by Dutch based, pan-European bunq. Bunq offers a digital banking service individuals and small business.
“Being part of bunq is a game changer for Capitalflow and allows us to scale in the Irish market, with the benefit of bank liquidity”, says Stephen Byrne, Head of Partnerships and Distribution. “This allows us offer fixed rate finance with the guarantee of liquidity – when some alternatives lenders are struggling with increased costs of funds.”
Capitalflow has recently come to the market with €200m in finance to support Partners in the Irish market including suppliers of key products for the retail industry. Byrne continues "We are delighted to be working in partnership with vendors in the retail industry and competitively financing all aspects of the retailer’s equipment needs – offering flexibility and choice".
In addition, Capitalflow has been building its Commercial Property finance book for trading businesses. With over €300m in commercial property loans, Capitalflow offers attractive amortisation and competitive property rates for retailers that wish to own their properties.
Capitalflow Green Business Loans
Capitalflow has recently announced a new Green Business Loan product, in partnership with the Strategic Banking Corporation of Ireland (SBCI), and the timings couldn't be more opportune.
“Energy costs for businesses have gone through the roof. Now is the time to review your energy costs and initiate a journey towards more efficient energy usage and reduced carbon emissions – good for the environment – good for your costs”, says Byrne.
Capitalflow has seen significant demand from SMEs to augment its energy supply with commercial solar, and to replace its heat with alternative renewable heat sources. “We are offering Green Business Loans typically from 10K to 150K per project and up to 10-year terms. The projects we are looking at in hospitality and retail sectors have a return-on-investment profile of 2 years in some cases and no more that 4 years in most”. The climate is right at the moment to replace a variable carbon energy cost with alternative energy efficient products which can be financed at fixed rate - removing energy cost uncertainty and anxiety over the longer term.