Microfinance funding to boost Irish franchising ...

Have you a commercially viable business proposal that has been declined credit by an Irish bank? Are you a start-up or growing microenterprise employing less than 10 people? Do you require less than ?25,000?

If you can tick any of these boxes you are eligible to apply for a loan from Microfinance Ireland, the new initiative funded by the Irish government to provide loans to new and growing microenterprises (turnover less than ?2million, staff less than 10) across all industry sectors that do not meet the conventional risk criteria applied by banks.

The scheme came into effect this week and is sure to boost franchise recruitment since ?25,000 will go a long way to meet the initial set up costs for most franchises. A borrower can spread repayments over five to seven years at a ?commercial? rate of interest (not fixed yet, but I?m told it could be around 9 per cent) and there?s no security requirement.

How does it work? Microfinance Ireland works in partnership with the County and City Enterprise Boards (www.enterpriseboards.ie) who can help with training and guidance in preparing your business plan. They will also conduct an initial evaluation of the quality of your business proposal for a loan application. The first step is to go to your local CCEB and speak to an advisor who will assist you with the application process.? The CCEB will make a recommendation and send the application to Microfinance Ireland who will assess the proposition and contact you directly.

Clearly, you need a business plan that makes sense. The funder?s credit policy will always be focussed strongly on the commercial viability of the proposed business, including the creation and maintenance of jobs.

In the first instance you should approach your bank for a credit. In the event that credit is decline, you are eligible to apply to Microfinance Ireland for a loan. A lack of credit history will not preclude a loan and microenterprises can be in the form of a sole trader, partnership or private limited company.

I hear the first tranch of money being made available is ?40 million. It?s not enough to solve everybody?s problem but this initiative will certainly be good news for budding entrepreneurs who wouldn?t otherwise get credit and who were losing hope of ever getting their business off the ground.

See you in the queue!

Source: http://www.franchiseyourbusiness.ie/franchise-information/money-microbusinesses/

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