Our Director, Norman Deacy has reviewed the sources of finance put in place for businesses impacted by Covid 19:
In these current unprecedented times, businesses in Ireland are facing several potentially significant challenges. Therefore, it is vital for businesses to plan and adapt accordingly. Consequently, cash flow will be a common issue and access to finance will be key in sustaining many businesses over the short to medium term, whether out of their own resources or from external providers.
We have reviewed the measures put in place by Government bodies and Financial Institutions to determine what supports are available and thankfully there are many options out there for viable businesses. Some of these financing options are industry specific but there are a range of options that are pretty generic.
However, the underlying requirement in sourcing finance in all areas is the preparation and submission of a “Business Plan”. There is help available in securing a professionally prepared “review of your business” and the preparation of a “Business Plan”.
Enterprise Ireland can provide the funding for the reviews and the preparation of the plan. Firstly, a “Business Continuity Voucher” up to €2,500 can be applied for. This can be accessed easily and quickly and will be used to fund the cost in carrying out the review for sustainability. Enterprise Ireland can also provide a “Business Financial Planning Grant” of €5,000 to fund the development of a “Business Sustainment Plan” but this is targeted at manufacturing or internationally traded services companies. A Business Plan will be required when applying for any further funding for your business whether from Enterprise Ireland or from the Banking sector.
There are a number of funding alternatives that Enterprise Ireland can offer businesses. A repayable grant through its “Sustaining Enterprise Fund” of up to €800,000 is available to certain sectors. There are some criteria to qualify but in essence it is designed for businesses that cannot access funding elsewhere, for example having been refused by a bank. There is also a “Covid-19 Online Retail Scheme”. This is very attractive and funds of up to €40,000 can be applied for in order to set your business up on-line and the development of this. Almost every business in the current climate needs to be considering this option going forward.
Sources of funding outside Enterprise Ireland can be applied for through the main banks in conjunction with the “Strategic Banking Corporation of Ireland”. Their newly launched “Future Growth Loan Scheme” is particularly attractive. Funding of up to €500,000 without security can be applied for but obviously capacity to repay has to be demonstrated in the “Business Plan”. Larger amounts can also be acquired from this fund but security then needs to be introduced. A “Credit Guarantee Scheme” is available for loans of €10,000 to €1,000,000. Basically 80% guarantee from the Government on your loan from a pillar bank over a 7 year period. A “Covid Scheme” … maximum 3 year term to help with working capital requirements. Interest only options and bullet payment options available on this loan scheme. The purpose of the loan must be for something “innovative” like changing the type of goods being produced or changing your target market etc.
These are the main sources of finance accessible. There are others which are more industry or customer specific.
Here is a link to a Government publication on Supports for Businesses impacted by Covid-19:
https://dbei.gov.ie/en/Publications/Publication-files/Supports-for-businesses-impacted-by-COVID-19.pdf
If you feel you will need some finance, we would recommend the following steps:
1. Apply for “Business Continuity Voucher”.
2. If applicable apply for “Business Financial Planning Grant” – only available to certain sectors
3. Decide on what scheme would suit your needs best in applying for finance.
Please call us if you wish to discuss availing of these measures. We have a dedicated team dealing with these applications at the current time.
Stay safe and we are here to assist you in any way possible.
Norman F. Deacy FCA
Director