An easing of Covid restrictions appears to have spurred borrowing among Ireland’s small businesses, with peer-to-peer lending platform Linked Finance recording the strongest monthly lending volume in its seven-year history last month.

Linked Finance loaned €5.5m to SMEs in July, which was almost three times the amount that was borrowed by businesses via the platform in July last year.

The platform is now on target for a record year, having loaned €21.6m so far this year.

That compares to the €19m that was loaned in 2019 – the year before the pandemic struck.

The company said it saw strong growth in lending last month across all sectors and particularly in the wholesale and retail trade, construction and manufacturing.

Linked Finance lent money to more than 40 SMEs last month, with an average loan size of €136,000.

The company is also an approved lender under the Government’s Covid-19 Credit Guarantee Scheme.

Since it secured that approval in January, Linked Finance has received two additional allocations of funding under the scheme, bringing the total it has available to €15m. Linked Finance offers loans of up to €250,000 under the credit guarantee scheme, for terms of six months to five years at interest rates starting at 4.75pc.

It is also offering a new ‘Recharge SMEs’ loan, which provides pubs, restaurants, accommodation providers and cafes with loans of up to €50,000 to help them reopen, restock and rehire staff.

“The SME market is now clearly starting the process of recovery, although different categories are at very different stages in their recovery,” said Linked Finance chief executive Niall O’Grady.

Since it was established in 2013, Linked Finance has facilitated loans of more than €162m to more than 2,800 local businesses across the country.

Enterprises from a range of sectors seek funding via the platform and they are targeting both domestic and international expansion with the finance.

Mr O’Grady joined Linked Finance as CEO in January. He was most recently the managing director of insurance firm 123.ie and director of distribution at RSA. 123.ie is owned by RSA. Prior to that, he was commercial director at Permanent TSB.