Microfinance Ireland - Local Enterprise Office

Report
Microfinance Ireland
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
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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
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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
Security
Unsecured. Indemnity required from Executive
Directors/Shareholders >25% of Limited liability companies
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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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
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
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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
Existing Business
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
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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
To Avail of the 1% discount on
interest rate
or
To get assistance with the
application process
Send completed applications
with supporting
documentation direct by post
to
Microfinance Ireland
Jefferson House
Eglinton Road
Donnybrook
Dublin 4.
www.microfinanceireland.ie
Drop in to your nearest LOCAL
ENTERPRISE OFFICE
www.localenterprise.ie
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Application forms available online
www.microfinanceireland.ie
www.localenterprise.ie

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