Bank finance
Different types of bank finance
Is bank finance an option for you?
Where can I get more information?
Bank finance
Cash is the lifeblood of any business and most businesses need some financial help to get started, grow and develop. Finance for business comes in three different forms – equity, grants and bank finance. Before approaching the bank, first investigate the other forms of finance – grants and financial supports – available to you. Once you have organised either a grant and/or equity, you are more likely to be successful with any application to your bank.
As with securing funding from other sources, getting bank finance is essentially a selling exercise – you need to sell the concept of your business idea to the bank. Banks will assess the levels of risk of your proposal and need to satisfy themselves that the potential rewards match the risk – ultimately, does your proposed business venture have the capacity to repay the debt.
Different types of bank finance
Working capital finance - short term
Product
Description
Overdraft
Supported by all features of a business current account
A flexible source of short term working capital finance
No fixed repayment schedule
Invoice Discounting
Confidential debt-financing facility
Helps businesses overcome cashflow problems caused by overdue invoices, giving immediate access to up to 80% of invoiced debt.
Repaid as debts are received
Capital finance - short to medium term
Product
Description
Term Loans
Fixed or variable interest rates
Monthly repayments over a period of one to seven years
Bridging Finance
Finance to fund businesses awaiting grant cheques or drawdown of approved commercial mortgages or loan agreements.
Finance & Leasing Options
Finance to spread the cost of insurance, corporation tax or other annual payments.
Equipment or Transport finance-allow repayments against your taxable profits.
Hire Purchase-for the use of asset purchase
Repayment over five years or life of tye asset
Capital finance - long term
Product
Description
Commercial Mortgage
Long term finance for the purchase of a business premises, refinancing an existing property or the ourchase of investment property.
Three types - straightforward repayment, commercial endowment or a pension mortgage.
Repayment over 15 years
Fixed Asset Loan
10 year fixed loan for fixed assets such as property, plant or machinery and pay for them over the period of their useful life.
Option to postpone capital repayments for up to two years, where appropriate.
Specialist
Banks will provide a range of specialist products & services to fund expansion or merger / acquisition plans.
Is bank finance an option for you?
If you are thinking of bank finance as a source to part fund your business expansion, you will need to consider:
Your capital need
The type of finance you need – short term, medium term, long term. Short term assets should be financed with short term debt (i.e. debtors with overdraft) and long term assets with long term debt (i.e. buildings with mortgage).
Your company’s ability to repay the loans within the required period
Your personal financial position
Your personal credit rating
Terms and Conditions
Risk
Where can I get more information?
Banks differ widely in terms of what they offer the small business sector, so it is important to talk to a number of them before making a decision.
You can click here for a list of bank contacts within Ireland who are members of the Irish Bankers Federation.