Whether it’s investing in a new premises or scaling production capacity, or even developing green projects such as solar farms or anaerobic digesters, the right mix of funding tools can make the difference between a smooth roll-out and financial strain.
That’s according to Carmel Mulroe, business development manager at Bibby Financial Services. For large-scale projects, she believes the best approach is rarely a single route: “Instead, businesses often combine traditional finance with more flexible solutions that protect working capital and support long-term resilience.”
Traditional options such as bank loans or equity financing remain important, however, Mulroe stresses. “Debt can provide the leverage needed to fund large-scale investments while spreading the cost over time, though repayment obligations must be managed carefully,” she advises. Equity financing, whether through private placements or share issues, can ease the immediate financial burden but may dilute ownership. “For businesses with strong cash reserves, self-funding can be attractive, though it may constrain liquidity for day-to-day operations.”
Rob Costello, PwC partner in corporate finance, says the optimal funding mix for such projects depends on whether the asset generates its own contracted cash flows (for example, a solar farm or an anaerobic digester) or supports core operations (like a new premises or a production line). Other relevant factors are the owner’s “balance sheet strength” and funding position, as well as – importantly – their risk appetite. “The goal should be to match funding to the asset’s life and risk profile, and to stack the cheapest capital at the bottom, with the most flexible at the top,” Costello explains.
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Project financing is typically most optimal for green projects such as solar and anaerobic digesters, he says. “This is where the project cash flows are ring-fenced to the specific project, the debt – and equity – is raised to develop the asset, and the cash flows it generates are used to repay the finance raised.”
On the other hand, debt financing is generally a better option where a new premises or production line adds to the capacity of the business. “Therefore, the debt is raised by the company on its balance sheet and repaid through the cash generated by the business, using its existing and newly funded assets,” says Costello.
For those embarking on green infrastructure projects, there are now other low-cost financing options to be availed of. For example, the Growth and Sustainability Loan Scheme (GSLS) was established by the Strategic Banking Corporation of Ireland (SBCI) in 2023 and is aimed at any SME seeking to invest in improving their business performance in terms of climate action and environmental sustainability or to invest in business growth and expansion.
Unlike similar schemes, it is not restrictive and covers a range of initiatives related to sustainability. The uses of these loans are broad as the scheme provides long-term funding for investments in the growth and resilience of a business or for investments in climate action and environmentally sustainable measures; SMEs can access lending terms of up to 10 years on loans ranging from €25,000 to €3 million, with amounts of up to €500,000 available on an unsecured basis.
Increasingly, flexible funding solutions are proving valuable for SMEs undertaking strategic projects – Mulroe points out that facilities such as invoice finance, cash-flow advances, or asset-based lending allow businesses to unlock the value tied up in receivables or unencumbered assets. “This not only provides immediate liquidity but also avoids the ownership dilution that comes with equity.”
She also notes that Bibby Financial Services has supported projects across a range of sectors, including a £9 million asset-based lending facility that enabled the management buyout of an international transport group, a €1.5 million hybrid invoice finance package that backed the acquisition of a soft-drinks portfolio in the food and beverage sector, and a €4.2 million invoice discounting facility that helped restructure and fund a recruitment firm in partnership with PTSB.
“These examples show how flexible funding can underpin significant expansion while maintaining cash-flow strength,” she says.
But the pros and cons of each funding route must be weighed carefully. Flexible options such as asset-based lending and invoice finance stand out for their scalability, Mulroe says; they grow in line with the business, helping to fund expansion while protecting liquidity.
“Ultimately, the best way to fund a big project is to blend options in a way that supports long-term strategy, safeguards operational resilience and ensures the business has the flexibility to seize new opportunities.”
