Starting your own business
There are a variety of financial supports available for SME’s:
Credit Guarantee Scheme
The Employment and Investment Incentive Scheme
Accelerated Capital Allowance- Tax relief for energy efficient equipment
Home Renovations Incentive
Credit Review Office
Seed Captial and Venture Capital Schemes (€700m)
Trade Online Voucher Scheme
The Government has developed a Micro-finance fund aimed at start-up, new or growing enterprises across all sectors, with no more than 10 employees. Loans of up to €25k are available for commercially viable proposals that do not meet the conventional risk criteria applied by commercial banks.
Applicants will have to demonstrate that they have been refused credit by a commercial lending institution before their application is considered. The new fund will generate €90m in new lending to 5,500 micro enterprises which will support 7,700 new jobs. Borrowers will pay a commercial interest rate.
For more information visit: here.
Credit Guarantee Scheme
The Credit Guarantee Scheme facilitates €450m of additional bank lending over 3 years to viable micro, small and medium enterprises to help them obtain the working capital and investment that they need. The Government provides the lender with a 75% guarantee for which the borrower pays a 2% premium. Target companies are those lacking adequate security for a normal commercial loan, or where bank understanding of the specialised aspects of the business environment in which they operate is limited.
For more information visit: here.
The Employment Investment Incentive Scheme:
EII is a tax relief which aims to encourage individuals to provide equity based finance to trading companies. You can claim tax relief on your investment when certain conditions are met. For shares issued up to and including 8 October 2019, the relief is split into two tranches:
- thirty fortieths (30/40) in the year of investment
- ten fortieths (10/40) in the fourth year after the initial investment.
For shares issued after 8 October 2019, the relief is available in full in the year of the investment. Companies will issue shares to you for the amount you invest. You must hold those shares for at least four years. EII is available to qualifying individuals who make qualifying investments. You will qualify if you, or your family, do not own any capital in the company.
For more information click here.
Accelerated Capital Allowance:
Tax relief for energy efficient equipment
The Accelerated Capital Allowance (ACA) allows companies to write off 100% of the purchase value of qualifying energy efficient equipment against their profit in the year of purchase.
For more information visit SEAI.
The National Pension Reserve Fund (NPRF) Backed Schemes:
Innovation fund Ireland (€250m)
Innovation Fund Ireland is a joint initiative between Enterprise Ireland and the NPRF and provides a unique opportunity for leading international venture capital fund managers to establish their European headquarters in Ireland and access entrepreneurs and innovative companies. Ireland already has a very active venture capital industry and Innovation Fund Ireland is an initiative to further increase the availability of risk capital for innovative companies.
Under the Scheme commitments have been made to a number of Funds. The following funds have been established and announced to date; DFJ Esprit, Polaris, Soffinova and Highland Capital Partners.
NPRF support funds for the SME sector (€850 million)
The National Pensions Reserve Fund, NPRF has developed a range of support funds for the SME sector to provide equity, credit and recovery investment. The NPRF will invest between €350 million and €500 million with a view to creating a total funding pool of at least €850 million for investment in SMEs.
- BlueBay Ireland Corporate Credit I Ltd
The BlueBay fund, to which the NPRF has committed €200 million, is a €450 million credit fund that will provide loans to larger SMEs and mid-sized businesses in Ireland. BlueBay is a wholly-owned subsidiary of Royal Bank of Canada and is a specialist asset manager of fixed income credit, corporate loans and alternative products. Loan amounts are expected to range in size from €5 million to €45 million and BlueBay is able to access additional capital for situations that require larger amounts. The loans can be used by borrowers for a variety of purposes such as refinancing existing liabilities, acquisition finance or investment expenditure. Pure real estate finance is not intended to be included.
- Carlyle Cardinal Ireland SME Equity Fund
The Carlyle Cardinal fund, to which the NPRF has committed €125 million, is a €300 million – €350 million private equity fund that will focus on investing in healthy businesses seeking to grow, including those with overleveraged balance sheets. The fund, which has received commitments from other-third party investors, is operational and is managed by Carlyle Cardinal Ireland in Dublin.
Home Renovation Scheme
The Government’s Home Renovations Incentive has been updated. In addition to updated FAQs, it now includes a “Getting Ready For HRI” checklist for contractors.
The HRI online facility is now available.
Contractors can access the facility through their ROS account or here.
Credit Review Office
Bank Decision Overturned in 35% of cases
If you’re a small business, sole trader or farm owner who has had difficulty getting credit or loan facilities of up to the new €500,000 limit or you have had an unfavourable change to your existing credit terms, get in touch with the Credit Review Office for an independent review. The banks are required to comply with the recommendation or to give their reasons for not doing so to the Credit Review Office. The Office has overturned the Banks’ decision in 35% of cases to date. For SME advice on loan portfolio’s see here.
For more information go to: Credit Review.
The Seed Capital & Venture Capital Schemes (€700m)
Last May, the Government announced a new call for expressions of interest under the €175 million Seed and Venture Capital Scheme 2013-18, which will see the continuation of the Government’s support for innovative Irish SMEs. The scheme is targeting an additional €525 million in funding from the private sector, which will mean a total fund of €700 million available for investment over the lifetime of the scheme. This new Seed and Venture Scheme 2013-18 will proceed by way of a series of calls for partners to establish individual funds tailored to different sectors and strategies in line with Enterprise Ireland targeted areas. The first call under this new scheme was made in May 2013 and Enterprise Ireland has recently made commitments to a number of funds in the Technology and LifeSciences Sectors. It is expected that these funds will begin to come on stream in 2014 – announcements will be made as the funds are established.
Over €800m in funding is available in Ireland through networks of angel investors, seed and venture capital firms. A total of €645m is under management in EI-supported SVC funds. The funds currently supported by Enterprise Ireland are:
- AIB Seed Capital Fund – €53m
- AIB Start-up Accelerator Fund – €22m
- Atlantic Bridge Venture Fund – €67m
- Atlantic Bridge Venture Fund II – €75m
- Bank of Ireland Early Stage Equity Fund – €32m
- Bank of Ireland Kernel Capital
- Bank of Ireland Start-up and Emerging Sectors Equity Fund – €17m
- Delta Partners – €105m
- Seroba Kernel LifeSciences – €75M
- NCB Ulster Bank Diageo Fund -€75m
Trade OnLine Voucher Scheme
The National Digital Strategy, launched by Minister Rabbitte on the 11th of July, outlines a Trade-On-line Voucher Scheme. Vouchers up to the value of €2500 will be made available to businesses to assist them in establishing an online presence. The business must match the value of the funding. Vouchers will be awarded as part of a competitive process and will apply at the point of investment of the business into their online trading presence. To receive a voucher the business must demonstrate what they want to achieve online and must actively commence online trading. A portion of the voucher can be used to purchase expertise and training. The strategy aims to award 2000 vouchers over a two-year period and opportunities for businesses to purchase bundled products will also be sought.
Eligibility criteria for applying for a voucher are:
- Employ fewer than 10 people
- Turnover of less than €2 million
- Sole traders, partnerships or limited companies (does not include not-for-profit organisations or Chamber groups).
- Business must be trading, so have made at least one sale
If you would like to apply for a voucher please contact your Local Enterprise Office.