Pulse College is a Dublin-based business which provides courses in creative media disciplines including film-making, animation and computer game development. It is looking to raise €60,000 to invest in new facilities. But it is not going to a bank and is hoping to raise what would be Ireland's largest peer-to-peer loan.
Peter O'Mahony, founder of Linked Finance, explains that peer-to-peer lending is where a business who is looking to borrow money goes out to a huge group of people to see if they would be interested in participating in the loan. In Linked Finance's case, they have 8,000 members of the public who each time the company posts a loan on the site all bid to take part in it. Mr O'Mahony says there is actually about €90 billion in spare funding in households around the country and the company's typical lender would be men between 40-55 years of age. He says the company's default rate on over 200 loans is zero, adding that it has no arrears.
While he does expect businesses to fail in the future, Mr O'Mahony says that this type of business tends to have very low default rates because the borrowers feel they are borrowing from a community and so feel very responsible about paying the money back. A typical loan across Linked Finance's loan book would have an interest rate of 8.9% and Mr O'Mahony says the business behaves like a bank in that it does full credit checks, while it also uses new technology to do social media checks to see how much people love the business they need investment for. On the lender side of things, it manages a proper client account where all the money is kept separately and ringfenced so that it is protected.
Mr O'Mahony says that Linked Finance is rejecting 45-50% of the people who apply to them for funding and it would be unusual for it to have someone on their site that has been completely turned down by financial institutions for a loan. The minimum bid for a loan is €50 and Mr O'Mahony says that if you have €1,000 to invest it is better to invest €50 to 20 business instead of €500 to two and so the risk is spread out.
MORNING BRIEFS - Food company Aryzta made a pre-tax profit of €176m over the six months to the end of January according to results published by the Swiss-Irish group this morning. Aryzta's revenues of €2.4 billion were up 14% on the same period in 2014 driven by strong sales at its European speciality baked-goods business.
*** Ballymaloe Relish has secured a deal to list its range across 900 Tesco shops in the UK. Ballymaloe Relish is a family business owned by Yasmin Hyde, daughter of the legendary Myrtle Allen and based on Myrtle Allen's original recipes from the 1930s. It is forecasting sales of €0.5m between now and the end of the year as a result of the Tesco deal.
*** $22 billion worth of corporate takeovers involving Irish companies buying American firms have occurred since September.
The Obama administration has sought to deter companies from pursuing what are known as tax inversion deals. These are transactions where a firm from a country with a lower corporate tax rate than the US buys an American company which then moves its tax domicile - where it's based for the purpose of tax assessment - to the country with the lower rate. President Obama singled out Ireland in a high profile TV interview on the subject last year to explain why the US was changing its laws to prevent such deals. But figures in this morning's Financial Times show there have been $156 billion in cross-border takeovers of US firms since then, compared to $106 billion in the same period in the previous year.