Microfinance Ireland - Empowering Microenterprises with Access to Finance
Microfinance Ireland, set up by the government, provides loans to new and growing microenterprises that do not meet traditional bank criteria. These loans support businesses with less than 10 staff and turnover under €2m, offering flexible terms, co-funding with banks, and a focus on job creation. The initiative aligns with the Action Plan for Jobs, supporting SMEs and promoting economic growth in Ireland.
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Microfinance Ireland Set up by the Government to provide loans to newly established or growing microenterprises, with commercially viable proposals that do not meet the conventional risk criteria applied by commercial banks MFI is additional lending which would not otherwise be provided by banks. Banks remain the primary and dominant supplier of finance to microenterprises Loans to top up bank credit may be available in certain cases where it is clear that the business would not go ahead without MFI Co funded loans with banks are also available
Definition of a Microenterprise? Less than10 staff & turnover and/or Bal Sheet < 2m Estimated to account for over 90% of businesses in EU and Ireland May be a start up or an existing business 3
Microfinance Ireland Supporting the Government s Action Plan for Jobs Business Activity 738 jobs supported 5.1m approved over 325 micro-enterprises 60% approval rate 60% start-up businesses / 40% existing businesses 4
Loan Features Our flexible business loans are designed for micro-enterprises that, under normal lending criteria, are unable to obtain loan facilities from their bank. We provide Loans between 2k- 25k Loan Size Terms up to 5-years (3-years working capital / 5-years capex) Term 8.8% APR fixed interest rate Interest Rate Unsecured. Indemnity required from Executive Directors/Shareholders >25% of Limited liability companies Security Moratorium / interest only / phased drawdowns / bullet repayments *on a case-by-case basis Flexible Terms Co-funding with banks welcome Co-Funding Working capital/purchase of equipment/set-up costs/Marketing Purpose of Loans All industry sectors provided for Sectors Sole Trader / Partnership / Limited Company Borrower 5
Action Plan for Jobs Department of Jobs Enterprise and Innovation Initiatives for SME s Partial Credit Guarantee Scheme Banks Credit Review Office Independent review of Bank declines Microfinance Ireland Micro-Enterprise Loan Fund launched October 2012 LEOs First-Stop-Shop micro-enterprise support structure
LEO / Microfinance Ireland Loan Product Loan at 1% Discount compared to Direct Channel Application assistance by LEO to client Provision of mentoring as required Local application Assessment with final decision resting with Microfinance Ireland
Assessment Criteria MFI will assess a loan application based on a number of criteria; A realistic business plan including cash flow projections Proven business models with prospect of near term cash flow The number of new jobs and social impact An interview (may be by phone) with the entrepreneur to assess skills, character, viability of the plan and commitment to the business Adverse credit history / absence of credit history will not preclude a loan provided there if full disclosure and evidence that debts have been dealt with honourably 8
Supporting Documentation Start-Up Business Existing Business 1. MFI Application Form 2. Business Plan to include - - Cash flow projection (3-years) - Summary P&L (3-years) 3. Promoter(s) CV 4. 6-mts personal Bank stmts In addition to 1 4: Recent Management A/Cs Latest Certified Accounts 6-mts business Bank stmts Aged Debtors/Creditors List * Tax Clearance Certificate required for drawdown 9
Service Commitments Assistance by LEO as required by loan applicant Transparency with Client on Applications potential Local assessment signed off by Head of LEO 8 Day turnaround of completed applications at LEO level 2 Day turnaround of LEO assessment by Microfinance Ireland and sign of by CEO.
How to apply for a Microfinance Loan LEOs (Local Enterprise Offices) Direct Send completed applications with supporting documentation direct by post to Microfinance Ireland Microfinance Ireland Jefferson House Jefferson House Eglinton Eglinton Road Donnybrook Donnybrook Dublin 4. Dublin 4. www.microfinanceireland.ie To Avail of the 1% discount on interest rate or To get assistance with the application process Road Drop in to your nearest LOCAL ENTERPRISE OFFICE www.localenterprise.ie 11
Application forms available online www.microfinanceireland.ie www.localenterprise.ie
