Microfinance Ireland
Micro Business Loans
Presentation to Tipperary Enterprises
in partnership with
Tipperary LEO
Action Plan for Jobs
Department of Jobs Enterprise and Innovation Initiatives for SME’s
Banks
Partial Credit Guarantee Scheme
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
Microenterprise Loan Fund Scheme
 Designed by Government to provide loans to newly established or growing
microenterprises across all industry sectors with commercially viable
proposals that do not meet the conventional risk criteria applied by
commercial banks.
 Not intended to replace any current bank lending – Banks continue to be
the dominant supplier of credit
 Requirement for a Bank decline of Loan being abolished
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
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 –
Loan Size
Loans between €2k-€25k
Term
Terms up to 5-years (3-years working capital / 5-years capex)
Interest Rate
8.8% APR fixed interest rate (discounted by 1% for LEO referrals)
Security
Unsecured
Flexible Terms
Moratorium / interest only / phased drawdowns / bullet repayments
*on a case-by-case basis
Co-Funding
Co-funding with banks welcome
Purpose of Loans
Working capital/purchase of equipment/set-up costs/Marketing
Sectors
All industry sectors provided for
Borrower
Sole Trader / Partnership / Limited Company
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Microfinance Ireland
Supporting the Government’s Action Plan for Jobs
Business Activity To Date
 1250 jobs supported
 €8.5m approved over 500 microenterprises
 60% approval rate
 60% start-up businesses / 40% existing
businesses
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
LEO - Microfinance Partnership
 As part of the Action Plan for Jobs
 Joined up thinking LEO supports the client / MFI lends
 First Co-Branded LEO / MFI Product launched September ‘14
 Microfinance do the administration of the loan
 LEO’s screen the application
 Unified decision making – local assessment, local intelligence
 Offers additional financial support to the LEO client base
LEO / Microfinance Ireland
Loan Product
 Loans through the LEO network get a 1% discount
 Application assistance for LEO clients
 Provision of mentoring as required
 Local application Pre-screening
 Final assessment decision and risk rests with MFI
Supporting Documentation
Start-Up 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
* Tax Clearance Certificate required for
drawdown
Existing Business
In addition to 1 – 4:
•
•
•
•
Recent Management A/Cs
Latest Certified Accounts
6-mts business Bank stmts
Aged Debtors/Creditors List
How to apply for a Microfinance Loan
LEOs (Local Enterprise Offices)
To Avail of the 1% discount on
interest rate
or
To get assistance with the
application process
Contact your local LEO office
www.localenterprise.ie
or
Direct
Send completed applications
with supporting
documentation direct by post
to
Microfinance Ireland
Jefferson House
Eglinton Road
Donnybrook
Dublin 4.
www.microfinanceireland.ie
Application forms available online
www.microfinanceireland.ie
Or
www.localenterprise.ie