There are a few factor inputs without which businesses cannot operate, and capital is one such input. While large businesses can easily raise capital from equity and capital markets, small businesses often need help here.
Table of content
- Local Enterprise Office
- Microfinance Ireland
- Trading Online Voucher Scheme
- Working capital for businesses
- Tips for businesses seeking funding
- Conclusion
This is because small businesses need more credibility. Investors face a high credit risk in this area. However, the relief is that there are multiple funding sources for small Irish businesses.
Keep reading to explore these funding avenues!
Local Enterprise Office
Businesses in Ireland can seek help from local enterprise offices. Ireland has 31 local enterprise offices. There are three central LEO grants available:
- LEO Feasibility Grant: This grant supports entrepreneurs by funding market research to evaluate the demand and viability of their product or service. Eligible expenses include market research, consultancy, technical development, and prototype costs. The grant covers up to 50% or €15,000 (€15,000 or 60% in the BMW Region) of the total investment.
- LEO Priming Grant: Designed for startups in their first 18 months, this grant assists with various business expenditures such as equipment, marketing, consultancy, and research and development. The grant amount is up to 50% or €150,000 of the investment.
- LEO Business Expansion Grant: Similar to the Priming Grant, this grant helps businesses after 18 months to support their growth and establishment in Ireland. The criteria and usage restrictions are the same as the Priming Grant.
The support from the local enterprise office comes not only in the form of money. They offer newly established businesses various training programs about business development and marketing, networking opportunities, and more.
Microfinance Ireland
There are higher chances of small businesses failing to get loans at banks because of low credit scores. This is where microfinance Ireland comes in handy. The government of Ireland backs Microfinance Ireland. You can explore multiple loan options here:
One option is the Small Loan, which is suitable for startups and established businesses with modest funding requirements. This loan allows borrowers to access €2,000 to €5,000 at competitive rates for up to three years.
Additionally, MFI provides other loan options, including those for startups, Brexit-related expenses, COVID-19 recovery, and business expansion, with amounts of up to €25,000 available.
While MFI loans may include business mentoring if requested, it’s essential to recognize that they serve as an alternative if traditional banks have declined funding. However, meeting their criteria for viability is crucial, and having well-organized paperwork can greatly enhance your chances of approval.
Trading Online Voucher Scheme
- The government provides cash assistance to small businesses through the Trading Online Voucher Scheme.
- It is part of the government’s National Digital Strategy to help small businesses grow their online trading operations, typically with a headcount of less than ten.
- These vouchers enable businesses to expand customer base and reach new markets.
- The maximum value of a voucher is €2,500 or 50% of allowable costs (excluding VAT), whichever is the lesser of the two.
- Businesses with fewer than ten employees and a limited internet presence with an annual turnover below €2 million are eligible.
- Besides, applicants must have been in existence for at least six months.
Working capital for businesses
Working capital is essential for any small business as it helps them undertake their daily activities and caters to short-term finance needs. Small companies generally experience seasonal fluctuations in sales volumes throughout the year.
Working capital can manage this variation since it ensures adequate finances during low sales periods.
- Private assistance
Private support is available in Ireland for small businesses. To exemplify, Business Innovation Centres (BICs).
Business Innovation Centers are privately led organizations dedicated to assisting entrepreneurs in launching and expanding their businesses.
There are three BICs in Ireland:
- Cork BIC,
- West BIC, and
- South East BIC.
One such critical service provided by BICs is facilitating access to finance. BICs provide support in financial modelling, helping entrepreneurs refine their financial models and business plans to secure the necessary funding at the right level.
- Business Grants
There are a plethora of business grants available.
- Investment and expansion grants: some grants are made to encourage business investments, job growth and regional development.
- Energy Efficiency Grants: Some funds may be available for businesses keen on enhancing energy efficiency and sustainability by supporting energy-saving projects. Small businesses in this niche can benefit from this.
- Research and Development (R&D) Grants: Firms engaged in research and development have positive externalities. As a result, they have a chance of gathering quicker funding to foster innovation or technological advancement.
- Environmental Support Initiatives: Certain incentives exist to help enterprises adopt eco-friendly practices or technologies.
- Tourism and Hospitality Assistance: Support programs and grants are available for tourism companies that want to expand their operations into new markets.
- Food and Agriculture Funding: Various grant programs exist to support local produce, sustainable practices, and product quality for food and agricultural industry business owners.
Tips for businesses seeking funding
While seeking funding sources for your small business, you will be asked to complete forms and applications, attend meetings, and more. Here are a few tips.
- Be factual and specific: Support your statements with evidence, such as statistics or examples, to showcase your business activities effectively.
- Understand your business model thoroughly. A deep understanding will make it easier to explain and convince judges of its viability.
- Provide relevant content: Prepare all the necessary documents, such as business plans and product specifications. Consider including links to your website so people can find out more details.
- Practice and refine- To improve your presentation, rehearse your pitch and seek input from others. This will increase the likelihood that you will present the funding authorities with a polished and compelling picture of your company.
Conclusion
As water is to humans, so is capital to businesses. It powers daily operations, pays for expenditures, opens up new growth markets, and encourages infrastructure and technology investments. Businesses may find it difficult to fulfil their financial obligations without sufficient funds.
But when it comes to capital, small firms have many options these days. Whether they seek government assistance via grants or private assistance, they can easily seek funding for their business.
Through efficient utilisation of these resources, companies can flourish in a highly competitive marketplace.