New lending platform delivers for Irish entrepreneurs (Sponsored)

Oct 02, 2018
Clearpath Finance is working with a range of traditional and alternative lenders to provide fast funding to Irish businesses.

Businesses and entrepreneurs in the Republic of Ireland now have access to a range of funding solutions through Clearpath Finance, an alternative lending platform founded in Belfast in 2016 by chartered surveyor Conor Devine MRICS and solicitor James Gibbons LLB. The two businessmen have a combined 50 years’ track record in the commercial real estate sector and the new platform is firmly grounded in this experience.

“What we are doing is quite unique,” says Devine. “We have created an alternative lending platform for businesses and entrepreneurs to access from right across Ireland and the UK. If an individual goes to a mortgage broker for a home mortgage, they have a wide variety of mortgage providers on their panel and source the best fit for their customer. In a way, we are performing a similar function for our customer base, providing commercial funding solutions for our customers. We now have over 50 different lenders who have committed capital to the platform, which we are very pleased with and shows tremendous confidence in what we are trying to do. We have spent quite a bit of time over the last 12 months working on our unique selling point and trying to demonstrate to the funding world that Clearpath is now an excellent route to market for them to deploy their capital.”

The funding and finance world continues to be quite an interesting space 10 years after the global financial crisis, Devine explains. “For the last number of decades, the high street banks and pillar banks have been the main source of finance for small businesses,” he adds. “However, it would be fair to say that the banking dynamic has been completely changed since the noughties, not only in Ireland but right across the world. Irish banks, for example, are still going through their own process of rehabilitation and are all, at the point of writing, still engaged in selling off non-performing loans (NPLs). This is quite telling as you would have thought the NPL positions would have been sorted out 10 years on. It’s quite incredible that over €100 billion worth of Irish business loans have been sold in the past five years. This in itself created a huge vacuum in the market which has attracted a range of new sources of capital outside of mainstream lending into the marketplace. Quite ironically, Clearpath has found itself involved in this space as we have been involved in the origination of over €200 million of new loans to enable promoters to exit positions that were involved in the loan sale process.”

In the last 18 months, quite a few new funders have entered the marketplace in the Republic of Ireland, which is great news for the business community and local economy. Clearpath Finance is now working with the majority of these lenders to facilitate the delivery of funds in a professional and efficient manner, and they do that through their ability to generate new business and present proposals that are pre-credit approved internally and of a robust nature, streamlining the actual process of applying for funding to draw-down of funds.

In the last 12 months, Clearpath has originated more than €30 million in new funding for business borrowers in Northern Ireland with another €22 million expected to complete before Christmas 2018. In the Republic of Ireland, Clearpath is now hoping to close out €10 million of new business loans this calendar year with an appetite to do much more in 2019.

“The market in the Republic of Ireland is a fantastic opportunity for Clearpath Finance,” says Devine. “We have a huge amount of capital to deploy and excellent relationships with our lenders as we continue to deliver good deals, which is working very well for all concerned.”

The process for borrowers is very straightforward. They apply to Clearpath for the loan predominantly online or by contacting the company by telephone. The Clearpath team will then talk directly to the customer, meet the customer and put forward the funding proposal to the internal credit committee for review. “If it gets the green light from credit, we advise the customer and guarantee a funding line for the customer subject to terms and conditions. The process itself is efficient and, more importantly, can often be completed within one week,” says Devine.

The funders who have committed to the platform comprise a cocktail of lenders including high street banks, peer-to-peer lenders, mezzanine funders and equity houses. A number of private family offices have also committed to the platform to deploy their capital.

Three reasons why funding deals fail

Devine adds: “What I have found is that there are three main reasons why entrepreneurs fail to get funding. Firstly, the funding deal simply doesn’t stack up. There might be a number of reasons for this including a security issue, maybe not enough repayment capacity, but whatever it is, it isn’t a good deal. This kind of proposal would not make it through the Clearpath credit committee, hence we wouldn’t be wasting the time of our lender. Second, and again this is very important, the information being presented by the promoter is presented incorrectly to the lender. This can be fatal as funders often don’t have the time to make the proposal work, and you may only get one bite at the cherry with your funder. That’s another one of the USPs at Clearpath in that we ensure that any proposal that makes its way to the funder is robust and presented in such a way that we believe it will get funded. Finally, one of the other main reasons people get turned down for funding is that they are simply talking to the wrong people. It’s interesting but every single one of our lenders have very different models, so it’s an important part of our own process that we put the proposal to the right lender to ensure a successful outcome.

“There is a challenge in all of this to the more mainstream traditional banks as their processes can still be quite cumbersome and time-consuming,” says Devine. “The business owner wants a quick decision, so being nimble and quick to form a funding decision is crucial, moving it through the legal process and onto draw-down as soon as possible. At Clearpath, we continue to refine this process and challenge ourselves rigorously to improve our offering, which we would hope in the next 12 months will position us as the number one alternative lending platform in Ireland. We will continue to prove to our panel of lenders that we are an excellent route to market for them. In doing this, and in continuing to refine and improve our customer experience, we will be at the top of the game in this regard.

“We are deeply passionate about business, helping people, adding value and bringing new capital to the marketplace right across Ireland,” Devine concludes.

For more information, visit www.clearpathfinance.com