So you've the business plan sorted, the strategy decided...now all you need is the money.
Should you put your own savings into it? Is it advisable to tap up family and friends? What should your approach be to dealing with the bank?
Joanne Hession, author of "Don't Get a Job, Build a Business" and founder of QED Training, and Mags Brennan, AIB Head of Sectoral Strategy talk Bobby through the key issues around funding a business and the support services available.
Joanne's Notes:
Financing Your Start-Up
You may never get a better analysis of or feedback about your business and business plan than when you approach a bank, investor, or government agency about finance. If you need money, it’s always available if you can convince the lender that you can pay it back. Firstly, think about what the money will be used for – capital investment, working capital or operating costs. There are many financial products available for each purpose including commercial mortgages, term loans, overdrafts and business credit cards. Aside from the traditional lending agencies and family-founder-friends, there is various financial help available to start-ups which includes supports such as grants, corporation tax of 12.5%, seed funding, Microfinance, tax relief, the Back To Work Enterprise Allowance (BTWEA), employment and investment incentive schemes, R&D tax credits, innovation vouchers, Jobsbridge & Jobs Plus (for assistance with hiring people), funding through incubators (Wayra, NDRC, New Frontiers), competitive start funding (EI), business angels, venture capital, and of course, the banks. A number of places to start with for finance include:
- The Enterprise Boards/Local Enterprise Offices (www.enterpriseboards.ie) support local businesses with less than 10 employees. Non financial support through training and mentoring is available as well as financial grants/repayable loans for eligible businesses which include priming grants/loans, feasibility study grants, innovation grant, business development expansion grants, online trading vouchers.
- Enterprise Ireland (www.enterpriseireland.ie) provides financial and non-financial supports to companies with the potential to reach 10 or more employees in the near future. As with the CEB websites, EI will give advice and assistance on completing Business Plans etc. They include supports for High Potential StartUps, Investor ready Supports and others and their financial supports often come with the offer of an educational programme.
- Business Angels (www.businessangels.ie) are affluent individuals who provide start-up capital for businesses, in return for convertible debt or ownership equity.
- Micro Finance Ireland www.microfinanceireland.ie Loans of up to €25,000 are available for commercially viable proposals from enterprises with no more than 10 employees that do not meet the conventional risk criteria applied by commercial banks.
- Linkedfinance.com – crowd funding for Irish startups (have to be trading 2 years)
- Halo Business Angel Partnership www.businessangels.ie/
- HPAN http://www.hban.org/
- HPAP http://www.intertradeireland.com/equity/business-angel-finance-and-networks/halo-business-angel-partnership/
- https://www.enterprise-ireland.com/en/Invest-in-Emerging-Companies/Source-of-Private-Capital/Business-Angels-BES,-Angel-Networks-.html
- Inner City Enterprise www.innercityenterprise.com provides loans of up to €5,000 to start up or expanding new businesses. Check out your local Partnership and LEADER organisation also for funding available for start-up businesses.
Your local Bank or Credit Union
Government incentives: Download the Guide to Financial Support for Irish Businesses (a 6 page Dept Jobs, Enterprise and Innovation publication). This publication includes details on an exemption of Income Tax up to a max of €40,000 per year for 2 years for those starting up a business who have been unemployed for 12+months before their start-up. Details of a seed Capital Scheme for those who set up in business straight from another job and Corporate Tax Exemption are also included plus others.
There are a huge number of programmes, initiatives, awards and so forth that are available throughout the country that include offering finance of one sort or another to start-ups. Whilst the first map below outlines enterprise support in Dublin to illustrate the extent of some of these services, these organisations (such as LEADER, Partnerships and Local Enterprise Offices/County and City Enterprise Boards) are available throughout the country. The logos on all three slides following represent my “brain-dump” of organisations relevant and available to persons throughout the country such as the Crafts Council, Bord Bia and funds from Enterprise Ireland such as Competitive Start Fund – at the time of writing April 2014 the Cork and Galway Competitive Feasibility Funds are open for applications. Currently no one information source of funding and supports available across all organisations exists for start ups.
Author: Joanne Hession
Joanne Hession is a successful entrepreneur and recognised leader in training, mentoring and business in Ireland. Joanne is responsible for training thousands of budding entrepreneurs through her business QED Training (www.QEDtraining.ie) and works internationally in the Business School sector through QED Accreditation Advisors (www.QEDaccreditationadvisors.com). She is passionate about business and providing new businesses with best in class training on how to do business better, smarter and more successfully and she is co-author of #1 best selling book “Don’t Get A Job, Build A Business”. She can be contacted at Joanne@qedtraining.ie.
