Invoice discounting specialist Bibby has announced a €60mn factoring fund for the Irish SME market.

The company has been present in Ireland for a number of years, but has bolstered its kitty in an aim to capitalise on growing exports from the island, which is expected to return to positive growth this year and next.

Bibby will purchase the invoices owed to SMEs with turnovers of over €200,000, before releasing up to 85% of the arrears back into the business.

The criteria for companies are that they are a provider of goods or services and are not doing business on a contractual basis (i.e. they should be selling on an ad hoc basis). The company is hoping to take advantage of the perceived sluggishness of banks in Ireland, as well as the perceived lack of risk appetite.

Bibby Ireland managing director Ronan Horgan tells GTR that there’s a lack of options available to Irish SMEs, particularly those involved in exporting. After the financial crisis, the main commercial banks AIB and Bank of Ireland required government bailouts, with many international lenders leaving the market altogether.

A result of this has been credit-tightening, with SMEs struggling to finance their operations. Banks are accused of focusing only on historical data and balance sheets, without looking at order books, meaning those who have suffered bad debts in the crisis fail to get finance.

“We’re looking at where the client is now,” says Horgan. “While it’s important to know what history they’ve had, what you’ll find with SMEs is that there may have been difficulties somewhere along the line, maybe through no fault of their own. Perhaps it’s an exporter who lost a contract in the recession and as such got into debt. The banks won’t fund that, but we’ll talk to them.”

Ireland exited its bailout from the Troika (the tripartite committee led by the European Commission with the European Central Bank and the IMF, that organised loans to the governments of Greece, Ireland, Portugal and Cyprus) in December last year and analysts are mostly optimistic.

Ireland’s Central Bank this week predicted growth of 2.1% in 2014 and 2.5% in 2015. It also expects unemployment to fall from 13.2% last year to 11% by the end of 2015. Good news stories about Irish exporters are common, with the likes of Dairymaster, Kerry Foods and Glanbia sealing big overseas contracts.

Research shows that while things are looking up further down the food chain, they’re much less strident. A report published by Red C, a think tank, and the department of finance last June showed that only 40% of SMEs had applied for credit in the six months up to March 2013. Encouragingly, though, 76% of respondents that had applied said that there applications were approved in full.

The figures, however, are said to not tell the whole picture by others. A survey of exporters conducted by the Irish Exporters Association shows that 49.3% fund their operations using their own funds, with 61.9% saying access to finance had not become easier to come by over the past year.

An officer at Enterprise Ireland, a government organisation representing exporters, tells GTR that banks won’t look at companies with bad debts, who are also discouraged from even applying for finance.