Business Line of Credit Ireland: Flexible Funding on Tap (2026)

Cash flow rarely runs in a straight line. A supplier wants paying on Tuesday. A big customer settles on the 30th.

That gap between the two dates? It is where most Irish businesses feel the squeeze.

A term loan is the wrong tool here. You do not want to borrow a lump sum and pay interest on it for three years just to cover a two-week shortfall.

That is exactly the problem a business line of credit is built to solve.

This guide walks you through how a revolving facility works in Ireland in 2026, how it differs from a term loan and an old-style overdraft, what it costs, when to reach for it, and what lenders check before they hand you the limit.

What a Business Line of Credit Actually Is

Think of it as a pot of money you can dip into whenever you need it, up to an agreed ceiling. Draw €15,000 of a €50,000 limit to cover a stock order, and interest runs only on that €15,000. Pay it back, and the full €50,000 is there again.

That is the whole point of a revolving facility. It sits quietly in the background, doing nothing until you need it, and costing you almost nothing while it waits.

It is the same principle behind revenue-based lending, where repayment flexes with what the business actually earns rather than a fixed schedule set in stone at drawdown.

So what does it cost? Most facilities carry a small commitment or arrangement fee, then interest on the drawn balance only.

That interest typically runs between 8% and 16% a year, depending on the lender and your trading profile. Limits usually start around €10,000 and reach €250,000 or more for an established company. The facility is reviewed every twelve months rather than repaid on a fixed date.

Now compare that with fixed-term business loans. There, you take the full amount on day one and repay a set instalment every month, whether you needed all of it or not.

Line of Credit vs Term Loan vs Overdraft

People lump these three together, and they really should not. Here is how we explain the difference to owners.

A term loan is a lump sum for a defined purpose: a van, a fit-out, an acquisition. You repay it over a fixed period at a fixed instalment, and you pay interest on the whole balance from day one. It is the right tool when you know exactly how much you need and you need it all at once.

An overdraft is the closest cousin to a line of credit. But it is tied to your current account, usually smaller, repayable on demand, and priced with steep unauthorised rates the moment you tip over the limit.

We have watched the banks quietly pull back from business overdrafts over the last decade. That retreat is a big part of why dedicated credit lines have stepped in to take their place.

A line of credit sits neatly in between. You get the flexibility of an overdraft with the higher limits and clearer terms of a proper facility. Draw what you need, repay on your own timeline, and the limit refreshes.

Running lumpy cash flow rather than funding one big purchase? It is almost always the cheaper, calmer option, because you never pay interest on money sitting idle.

The Best Uses for a Line of Credit

A line of credit earns its keep on timing problems, not funding problems. The facilities we set up tend to solve one of three things.

The classic one is bridging the gap between paying suppliers and getting paid by customers. Picture a wholesaler on 60-day terms who has to pay for stock on delivery. They draw down to cover the gap and repay the moment the customer invoice lands, paying interest on only a few weeks of use.

Seasonal swings are the second. A garden centre, a tourism operator or a retailer building stock for Christmas can draw in the quiet months and repay through the busy ones.

That matches the cost of the money to the rhythm of the trade. A €40,000 line drawn to €25,000 across a slow January and February, then cleared by the summer, costs a fraction of what a full-year term loan on €40,000 would.

The third is simple peace of mind. An agreed facility on standby means a late-paying customer or an unexpected repair does not turn into a crisis.

You are not scrambling for emergency finance at a bad rate, because the line is already there, approved and waiting.

What Lenders Actually Look For

When we arrange a line for a business, the first thing any lender looks at is trading history and consistency. They want to see money move through the business predictably, so twelve months of trading is a common minimum. Revenue-based lenders will take less if the bank-feed data is strong.

Your turnover, your margins and the regularity of your incomings tell them two things: how large a limit they can safely extend, and how likely you are to clear it.

Revenue is next, and here it is non-negotiable. Your VAT and PAYE returns need to be filed and either paid or under an agreed instalment arrangement. A current tax clearance certificate is the cleanest way to prove it.

The lender will also pull your file from the Central Credit Register. They want it clean, or at least with any past arrears clearly back under control. If a company is applying, its CRO filings need to be up to date.

We see this again and again: unfiled accounts or a tax debt sitting in the background is the single most common reason an otherwise fundable business gets held up.

Here is where the newer lenders part ways with the banks. Fintech and revenue-based lenders read your live bank-feed data through open banking. Many plug straight into your Stripe, SumUp or card-terminal takings to see real-time revenue rather than year-old accounts.

That is how they approve a facility in days instead of weeks. They are judging the money flowing through the business today, not a filed set of numbers from last year.

How the Lenders Differ

• Pillar banks (AIB, Bank of Ireland, Permanent TSB): the tightest requirements, wanting two years of accounts, six months of statements, tax clearance and full CRO compliance. Lower rates on an approved facility, but slower to decide and less generous on limits for younger businesses.
• Alternative and fintech lenders: far lighter touch, assessing affordability from three to six months of open-banking data rather than filed accounts. Faster decisions and higher rates, and the realistic route for a business under two years old or one that needs a facility this week.
• Revenue-based lenders: the most flexible of all, sizing and repaying the facility against your actual turnover. Your available limit flexes up as sales grow and repayments ease off in a quiet month, which suits seasonal and high-growth businesses that a fixed overdraft would choke.

What to Prepare Before You Apply

A little prep goes a long way here. Have six to twelve months of business bank statements ready, or be set up to connect your account through open banking. That data does most of the heavy lifting in a modern application.

Then add:

• Your most recent filed accounts or management figures
• A current tax clearance certificate
• Details of any existing borrowing, so the lender sees the full picture

Do you run card or online payments? Sharing your Stripe or terminal data will speed a revenue-based decision considerably.

The pattern we see is simple. Lenders back businesses whose numbers are clean and legible. The tidier your statements and the clearer your tax position, the higher the limit and the lower the rate you will be offered.

Final Thoughts

A line of credit is not about borrowing more. It is about borrowing smarter.

For the everyday timing gaps that define running a business in Ireland, the late payers, the seasonal dips, the stock orders that land before the revenue does, it is almost always the right instrument. Why? Because you only ever pay for what you use.

Our advice to every owner is the same: put one in place before you need it, not in the middle of a crunch. Keep it on standby as your working-capital backstop.

If your revenue is seasonal or growing fast, look hard at a revenue-based facility that flexes with your turnover rather than a rigid limit that fits you today and strangles you next quarter.

And if it fits your plans, Revenue-Based Lending Ireland is the natural next guide to read.

Frequently Asked Questions