Are you looking for government funding for your small business or startup idea?
Here we look at the financial support offered by your Local Enterprise Office and also the unsecured government loans on offer from Microfinance Ireland.
Local Enterprise Office
The first stop for any small Irish business for looking for funding is your Local Enterprise Office (LEO). There are 31 offices across Ireland, so there will be one near you.
It’s important to mention at this stage that while the LEOs are here to support local enterprises that does not mean that just because you have started a business the support that they offer is not always financial, it also offers networking, education and mentoring supports.
The Local Enterprise Offices do many wonderful courses to help you start your business and teach you about marketing and business development, but the funding comes with the caveat that your business is going to grow larger than a side project.
“Supports like Feasibility, Priming and Business Expansion, they’re really targeted at those businesses that have the potential to grow and scale internationally and export,” explains Sandra Reynolds business adviser with the Dublin City Local Enterprise Office.
“The Local Enterprise Offices are the first stop shop, if you will. Of the portfolios that get funded, about 30% go on to become Enterprise Ireland clients,” she adds.
You can think of Enterprise Ireland as LEO’s big brother.
Trading Online Voucher Scheme
One of the most popular grants given to small businesses is the Trading Online Voucher Scheme.
The scheme offers financial assistance of up to €2,500. Of that you will have to fund 50% yourself E.g., if you get the full grant of €2,500 you will be spending €1,250 of that amount from your own resources.
For the most part eligibility for LEO funding schemes requires the business to be less than 10 employees.
The weightier funding types from LEO start with the Feasibility Grant, designed to assist you with market research, including ‘assistance with innovation including specific consultancy requirements, hiring of expertise from third-level colleges private specialists, design and prototype development.
Depending on which region you are in ‘the maximum Feasibility Study Grant payable for the S&E Region shall be 50% of the investment or €15,000 whichever is the lesser. The maximum Feasibility Study Grant payable for the BMW Region shall be 60% of the investment or €15,000 whichever is the lesser’.
For businesses under 18 months the Priming Grant can help you take your business to the next level where you may get up to a maximum of €150,000. The breakdown is as follows.
All grants of a value greater than or equal to €50,000 or with a cumulative value of €100,000 over three years require Enterprise Ireland Approval. Grants over €80,000 and up to €150,000 shall be the exception and shall only apply in the case of projects that clearly demonstrate a potential to graduate to Enterprise Ireland. In all other cases, the maximum grant shall be 50% of the investment or €80,000 whichever is the lesser. Subject to the 50% limit, a maximum grant of €15,000 per full time job created shall apply in respect of any employment support granted.
Business Expansion Grant
For businesses over the 18 months a similar grant is available called the Business Expansion Grant, intended for exactly what it says. The terms are pretty much the same as the priming grant but businesses that have availed of the Priming Grant ‘will be ineligible to apply for a Business Expansion grant until 12 months after approval/drawdown date of Priming Grant whichever is the later except in cases of exceptional merit’.
Technical Assistance for Micro Exporters’ Grant
“There’s also a Technical Assistance for Micro Exporters’ Grant is technical assistance for micro exporters, which is a small amount of money for companies who are looking to go to conferences abroad and exploring export markets,” says Sandra.
The grant covers 50% of eligible costs (net of vat) to a max of €2,500.
All the information regarding Local Enterprise’s finance opportunities for small businesses can be found on their website.
“The Local Enterprise Offices are the first stop shop. Of the portfolio that gets funded, about 30% go on to become Enterprise Ireland clients” explains Sandra Reynolds, Business Adviser with the Dublin City Local Enterprise Office.
If you are looking for a cash injection, and in the position to take on a loan, then Microfinance Ireland could be your port of call. It is Government backed lending for businesses who have been rejected by their bank, so make sure you have tried your own bank first.
Again, you can get all the help you need in your Local Enterprise Office when it comes to applying for an Microfinance loan. In fact, if your application comes via the LEO office then you are eligible for a better rate on the loan.
Why choose MicroFinance Ireland
A reduced interest rate of 4.5% APR if submitted through the LEOs and 5.5% APR applies if you submit your application directly to Microfinance Ireland, so that is worth bearing in mind.
“To some extent, in its simplest form, we really only have one loan. We target it slightly differently but it’s a term loan over a three-to-five-year period at a fix rate that’s unsecured,” says Des McCarthy, CEO of Microfinance Ireland.
“It’s a relatively simple product – you borrow it and then you repay it. It’s not like an overdraft facility that you borrow it and then you pay back a bit and can reborrow. What you pay back on our loans, you can’t reborrow immediately – it’s essentially like a mortgage loan,” he says.
“Start-ups are about 40% of our business and existing businesses the other 60%,” he adds.
If you are looking for an injection of cash, due to cash flow, issues MFI might just be you saving grace. Their Cashflow Loan of between €5,000 – €25,000 with the interest rates as above might just get you out of a tight spot. The loan term is up to three years and providing you have your paperwork in order there should be a quick turn around on the decision.
“We aim for a turnaround of 10 days for an approval”, says Des, “and once you’ve got your approval in another 10 days, we could probably get you the money.”
“Where we find people have problems is that they don’t tend to provide us with all the documentation at the start. If you are looking for a quick turnaround, you need to have your documentation in order – you need to submit everything at the same time,” he says.
Among the other loans Microfinance Ireland provide is a Small Loan. It is available to both start-ups and established businesses with low funding requirements. Loans of €2,000 – €5,000 can be borrowed at the same rates as above up to a three year term.
Other loans of up to €25,000 are available. The Start Up Loan is for early-stage start-ups with a viable business plan, Brexit Loan for those incurring the excessive costs of dealing with our nearest neighbours, COVID-19 Business Loan for those trying to bounce back from the pandemic and the Expansion Loan for established businesses who are spreading their wings.
MFI loans come with a degree of business mentoring if required but it’s important to remember that while they are a back up if the banks rejected you, it does not mean that they won’t reject you as well.
They assess businesses on viability and the very best impression you can make is having your paperwork in order. You can find more details in the Microfinance Ireland loan packages on their website.
“Where we find people have problems is that they don’t tend to provide us with all the documentation at the start. If you are looking for a quick turnaround, you need to have your documentation in order – you need to submit everything at the same time,” explains Des McCarthy, CEO of Microfinance Ireland.
A new fund available to innovative start-ups through the LEOs is the Agile Innovation Fund, bringing you into Enterprise Ireland territory.
Considered a ‘fast track’ fund with a ‘streamlined’ online application process ‘the new Agile Innovation Fund will allow companies, including small companies, to access up to 45% or 50% in support for product, process or service development projects with a total cost of up to €300,000’.
You can find out more about the fund from your Local Enterprise Office.
Larissa is a Fellow Chartered Accountant (FCA) and is the Founder and CEO of Accountant Online, which specialises in company formation, company secretarial, annual accounting services, bookkeeping, tax, and payroll services for micro and small companies in Ireland, Northern Ireland and the UK.
Larissa has been shortlisted for the Image ‘Businesswoman of the Year Award’ in 2017 and 2018 and awarded ‘Accountant of the Year’ in 2018. Larissa volunteers as a role model for LEO Donegal’s ‘Ambition’ programme and is a Lead Entrepreneur for ‘ACORNS’ and ‘Going For Growth’ which are development programmes designed to support ambitious female entrepreneurs, and for ‘Back For Business’, a development programme assisting returned emigrants or those planning to return to Ireland to start and develop a business. Accountant Online has won many awards, including ‘Best Small Practice’ in 2017, ‘Best Medium Practice’ in 2018, and in 2020, ‘Medium Practice of the Year’ and ‘Practice of the Year’.