The following are some funding options for start - up and small businesses. This document has been compiled as a result of queries raised by clients and is for information purposes only. They do not include State funding grant schemes such as grants from Local Enterprise
Offices or Enterprise Ireland information which can be got from the Local Enterprise Office, nor support schemes through Revenue and Social Welfare.
Prior to applying for any type of funding it is always advisable to research your business start- up or expansion idea thoroughly including drafting a plan for your business. Part of this process will include conducting detailed practical market research, researching set up and running costs for your business. The Westmeath Local Enterprise Office offer excellent and useful courses in these areas (e.g. How To Investigate Your Business Idea, Start Your
Own Business). See training section of this website for wide range of affordable courses www.localenterprise.ie/Westmeath/Training-Events/ . Westmeath Local Enterprise also have a panel of highly qualified and experienced Mentors and business advisors who may be able to assist you in making decisions and applying for funding. See www.localenterprise.ie/Westmeath/Training-Events/Mentoring/
Please contact Westmeath Local Enterprise Office at (044) 9338945 with any queries in relation to this article.
The following article outlines key aspects the following:
Opportunity In A Million
Westmeath Community Development Loan Fund Facilitated By Mullingar Enterprise
& Employment Group And Credit Union and Also
Westmeath Community Development Loan Fund facilitated by Athlone Community
Taskforce and Athlone Credit Union.
Venture Capital Firms
Business Angel Funds
Credit Guarantee Scheme
Micro Finance Ireland
Crowdfunding is the practice of funding a project or venture by raising monetary contributions from a large number of individuals or organisations, to fund a business or project, through an online platform. It is a type of market based finance that could be used by start-ups and small business to raise money. There are many different types of crowdfunding organisations and websites based both in Ireland and internationally. An enterprise or business seeking funding needs to ensure it works with a crowd-funding organisation relevant to their business.
Crowdfunding can be structured in a number of ways. The most common models are:
Lending based Model where individuals lend money to a company, project or consumer in return for repayment of the loan and interest on their investment; this is also known as peer-to-peer lending. At this time, peer-to-peer lending is the only form of crowdfunding to have an established presence in Ireland.
Equity based model where individuals make investments in return for a share of the profits or revenue generated by the company/project.
Donations or Rewards based model where individuals provide money to a company or project for benevolent reasons or for a non-monetary reward.
Crowdfunding is not regulated in Ireland. The Central Bank are, however, monitoring the situation. Below are just some examples of crowdfunding options available for business
Most crowdfunding websites for business operate an “All or Nothing Policy”. This means that the project or idea must reach or exceed its target amount before the time expires, otherwise the project does not receive funding and Funders do not get charged.
Kickstarter is focused on creative projects in 15 broad categories, and we have a few simple rules that outline what projects need to look like. You can read those rules on their website.
The short version is that Kickstarter is a place for making things – it isn’t a site for charitable donations or financial investments. Kickstarter is focused on creative projects in 15 broad categories, and we have a few simple rules that outline what projects need to look like.
Fund it is an Ireland-based, run by Business to Arts, Ireland-wide initiative with staff locally providing a platform for people with great ideas to attract funding or fundraise from friends, fans and followers across the world. See www.fundit.ie
. It is a not-for-profit organisation working to support the cultural sector through research, innovation and partnership.
Criteria and fees:
Those seeking to raise funding must demonstrate that they have a contact network (email lists, social media network etc). Fund it provides the platform for Creators, but the onus is on Creators to spread the word about their project to their friends, family, contacts and followers.
The borrowing target is entirely up to the Promotor.
If a Project is successful, Fund it charges a 5% commission on the total amount successfully debited from Funders’ cards. Banking and payment charges apply, usually at 3%.
To raise funds in this manner go to www.fundit.ie.
This crowd funding website was established in Ireland in 2013 to allow people to lend to businesses. Through this website businesses can apply to raise money directly from the public to develop or expand their businesses.
Criteria and fees:
Business must be actively trading for at least two years. See www.linkedfinance.com for full list of conditions.
Bids from Lenders can range from: €50-€2,000 at various interest rates established by
Lenders. Amount of finance sought can be minimum €5,000 and maximum €50,000. Loan terms are three years and repayments are made monthly.
To register on LinkedFinance, the Borrower must pay an application fee of €70 plus Vat.
LinkedFinance charge Borrowers’ a completion fee of 2.5% of the total loan amount. They will deduct this fee from the loan before we transfer the loan funds to you. Fees apply to missed payments. These fees are specified in the loan contract. LinkedFinance charges lenders an annual service fee of 1.2% of the amount they have lent to borrowers on the site
Go to www.linkedfinance.com
: register as a borrower on LinkedFinance. Second, complete online loan application form.
Kickstarter is an international crowdfunding website which opened a dedicated Irish website in the latter months of 2014. See www.kickstarter.com/ireland . It operates on an “All – or
Nothing” funding basis.
Criteria and fees:
Kickstarter is focused on creative projects in 15 broad categories, Art, Comics, Crafts, Dance,
Design, Fashion, Film & Video, Food, Games, Journalism, Music, Photography, Publishing,
Technology and Theatre. To participate, you need to be at least 18 years old, and you should be a permanent resident of Ireland. You have to start the project in your own name, or on behalf of a legal entity with a valid business number. And you’ll need things like a mailing address, bank account, identification, and a major credit or debit card
Kickstarter collects a fee when a project is successfully funded. If that happens, they charge
5%. The partners that process payments for them also charge a fee, which varies depending on location. If a project is not successfully funded, there are no fees.
To raise funds in this manner go to www.kickstarter.com/ireland .
Our Money Ltd t/a Grid Finance was launched in October 2014. Grid is focussing on creating an online community that finances itself through modern online financial products; the traditional idea of a community bank can be redefined and transformed to meet people’s changing financing needs. GRID Finance’s first product is a peer to peer financing platform called the GRID. The GRID connects those who have money with those who need it. The
GRID allows real people to decide how to put their money to work by lending to local businesses, donating to community organisations and gifting to family and friends.
Local businesses create a 'project' on the GRID that will allow them to showcase what they need to finance, how much finance they require and for how long. Businesses can raise up to €75,000 in project finance.
The business should be trading; All businesses must be tax compliant and provide a tax clearance certificate. The loan purpose must be for a specific project. Application fee applies. 2% financing fee if funding raising successful.
To raise funds in this manner go to www.grid.finance/business/
Other websites that may of interest in relation to crowd-funding:
Seedsup Seedsup.com connects investors with technology start-ups. StartUps in the USA,
UK and Ireland can raise up to €500,000. See www.seedups.com
OPPORTUNITY IN A MILLION (OIM)
Established in late 2013, Opportunity in a Million (OiM) is an initiative sponsored by Athlone
Community Taskforce (ACT).
The objective of this initiative is to enhance the spirit of enterprise and employment, leading to the establishment of new business ventures and employment in the Athlone area.
OiM clients can avail of a free professional service from over 50 experienced business people who provide encouragement, mentoring and evaluation of potential enterprise projects, which allied to a loan fund donated by individuals, employers and employees is aimed at providing measures to increase employment in the Athlone area.
The structure of this initiative involves the following support groups:
Enterprises in the Athlone catchment area (10K radius from Athlone Castle) are eligible for consideration for the OiM loan fund.
Ideally be start-up businesses which generate employment but will not displace existing jobs.
Potential to provide employment.
All business/potential enterprise must be located and must remain in the Athlone catchment area.
Knowledge-based enterprises will be the OiM main target but other business sectors which have potential to provide employment will also be eligible for consideration.
Ineligible business categories:
Professional Services Enterprises.
To apply for support, funding and or to get further information contact Athlone Community
Taskforce at 090 6494555 or email firstname.lastname@example.org
or Ball Alley, Parnell Sq., Athlone, Co.
Westmeath Community Development Loan Fund facilitated by Mullingar Enterprise &
Employment Group and Mullingar Credit Union.
Westmeath Community Development Loan Fund facilitated by Athlone Community
Taskforce and Athlone Credit Union.
A loan fund was established by Westmeath Community Development (W.C.D.) in the midnineties to assist small start-up businesses who cannot get funding elsewhere. The loan fund is jointly supported by Mullingar Employment Action Group and Athlone Community
Taskforce and administered by Mullingar and Athlone Credit Unions.
Applicants must qualify for Back to Work Enterprise Allowance. Maximum loan available is
€3,000 and Credit Union interest rates apply. Loans must be for start – up costs and usually exclude loans to purchase vehicles.
For further information, contact: Dan Grehan at Westmeath Community Development Ltd.
Mullingar Office - Phone: 044-9348571 and Seamus McKenna in the Athlone Office – Phone:
VENTURE CAPITAL FIRMS
Venture capital is where business Promotors seek funds from private investors. These type of investments usually involve project in which there is a substantial element of risk, typically a new or expanding business. Venture Capitalists generally look for quite a high rate of return on their investment, in addition to a return of their initial capital investment within a relatively short period of time (3-5 years). They will usually take an equity (share capital) stake in the business. There are a number of private equity houses (venture capital firms) around the country. Many are represented by the Irish Venture Capital Association
See www.ivca.ie/ .
To apply for funding through these channels, the business will need a robust business plan.
If you decide to use this route for funding it may be useful to meet a number of venture capital firms to check if they are the right fit for your business.
Some very successful business people who have excess funds to invest may also be interested in investing in your business. They may not be part of a venture capital firm but will usually operate on the same basis as outlined above. However, they may also bring to the business their own experience and contacts which in many instances is as useful if not more useful than the financial commitment they make. You may find these people through
your own Accountant, your own Network or even through the Halo Business Partnership!
BUSINESS ANGEL FUNDS
The Halo Business Angel Partnership is a joint initiative between Enterprise Ireland,
InterTradeIreland and the Irish Business and Innovation Centres. It is managed by Dublin
Business Innovation Centre Limited as part of its ongoing support to start-up and developing enterprises. See www.businessangels.ie
. They operate on a national basis.
This project matches private investors with pre-screened investment opportunities in startup, early stage and developing businesses. These are often successful entrepreneurs themselves, or they may have been senior managers from industry. A common thread is that they are looking for the opportunity to invest in ambitious, fast-growth businesses.
Investors tend to invest between €25,000 and €500,000 in high potential growth projects.
They offer long term finance, credibility and leverage and business experience.
CREDIT GUARANTEE SCHEME
The purpose of the scheme is to encourage additional lending to SME’s not to substitute for conventional lending that will otherwise have taken place. The Credit Guarantee Scheme aims to facilitate bank lending to commercially viable SMEs which are unable to obtain a normal credit facility because they have insufficient collateral to support the facility, and/or because they are growth/expansionary SMEs, which due to their sector, market or business model are perceived as a higher risk under current credit risk evaluation practices.
The Credit Guarantee Scheme (CGS) went live on 24 October 2012 with Allied Irish Banks,
Bank of Ireland and Ulster Bank Ireland initially offering Scheme-supported credit facilities.
A business must have applied for a normal credit facility before a participating bank can consider a Scheme facility for that business, where appropriate. Businesses should also familiarise themselves with the detailed information on the scheme, which is available on the Department’s website www.djei.ie
Microfinance Ireland (MFI), www.microfinanceireland.ie
has been established as a not-forprofit lender to deliver the Government’s Microenterprise Loan Fund. Unsecured loans from €2,000 up to €25,000 are available over terms from 3 to 5 years.
All business sectors are eligible to apply. Applicants may be sole traders, partnerships and limited companies with fewer than 10 employees and an annual turnover of less than €2m.
Loans may be used to fund the start-up of a business, the purchase of stock, equipment, machinery and business vehicles and are also available to established enterprises
Microfinance Ireland works in partnership with the Local Enterprise Offices.
Unsecured loans from €2,000 up to €25,000
Term from 3 to 5 years
Reduced Interest Rate 7.5% (7.8% APR) for Westmeath LEO clients
Flexibility on repayment terms
Please contact Westmeath Local Enterprise Office at (044) 9338945 or email email@example.com
to enquire about microfinance funding.
Keep up to date with all news and events at www.localenterprise.ie/Westmeath