Making Cents: Here’s where to start if you're starting a business

The pandemic has given many people the time and space to look at their lives and consider whether changes need to be made. For some, this has led to a desire to change how they earn their living and a decision to take the plunge and start their own business.

Setting up a business is a challenge at the best of times, even more so in the face of the uncertainty Covid-19 has brought to all our lives.

But if you have or are considering setting up a new business, there is a wealth of support out there, both financial and otherwise.

One major source of support is Microfinance Ireland (MFI), who provide small loans (up to €25,000) through the Government’s Microenterprise Loan Fund.They consider applications from businesses that may otherwise struggle to get finance.

MFI CEO Des Mc Carthy says they remained busy throughout the pandemic and have seen strong levels of activity so far this year.

“There are people who maybe had side hustles during the pandemic, that now want to scale those or commercialise them,” he says. “There are people looking for a change of lifestyle.

“We are a lender to viable small businesses but ones who can’t access funds from the traditional bank market, businesses where the risk is too high for the commercial banks. We look at those.” 

He stresses that MFI are not in competition with banks but rather see them as referral partners. MFI tailor their products to assist start ups and small businesses and offer excellent rates.

“We have interest-only periods at the start of our start-up loans, we charge no fees so there are no surprises,” Mr McCarthy says. “It is important for start-ups in that first 3/6/12 months, cash flow is always going to be tight and uncertain. Being able to have a breather with interest only helps. That’s why we structure our loans in that way. Likewise our loans are fixed rate so it gives a start up certainty in their cash flow in those early years.” 

Despite the fixed rates, there is also no penalty if you find your cashflow to be stronger than expected and want to repay early.

“You will have a repayment schedule but if you want to prepay there is no problem,” he says. “It gives a lot of flexibility to people. Our standard rate is 7.8% and you get a 1% discount on that if you go through the Local Enterprise Office (LEO).” 

MFI works closely with the LEO network and Mr McCarthy heartily endorses their services. Some MFI products include free mentoring from the LEO as part of the package. As Mr McCarthy points out, entrepreneurs cannot be expert in every area, and LEOs can provide access to specialists in everything from marketing to website development.

“We are happy to take applications directly but we encourage people to go to the LEOs,” he says. “We have a strong relationship and we give them a discount if they come through the LEOs. The reason for that is the LEOs will help them put their application together. It is a really important, underutilised resource.“ 

He also recommends people look into the supports available from the Department of Enterprise, Trade and Employment: “The website has a huge number of supports in terms of vouchers - for getting your business online and loads of other stuff,” he highlights.

MFI are also providing significant support to existing businesses; Mr McCarthy highlights their targeted offerings for entrepreneurs who may have been affected by the events of recent years.

“We still have a Covid product in place and are still dispersing and approving a lot of Covid loans,” he says. “If your business has been impacted by Covid you can still come to us and get a Covid loan. That is still there.

“We have also got a Brexit product, aimed at companies that might be impacted by Brexit.

Someone who started a business 18 months ago could be back to square one now, Brexit or Covid could have put their business back. If you’re back because of Brexit or Covid then you’re entitled to a Covid loan. Our Covid and Brexit products are at 5.5%, or 4.5% if you go through the LEO.” 

• You can find out more at www.microfinanceireland.ie and can contact your nearest LEO through www.localenterprise.ie.

DEAL OF THE WEEK:

We are currently enjoying an Indian summer but even as the sun shines, the shorter evenings are a reminder that winter is on the way. 

The heating will be back on in most homes soon, making this the ideal time to get gas boilers serviced, something the Sustainability Energy Authority of Ireland (SEAI) recommends having done every year.

Electric Ireland offer a complete boiler service, which can be booked online, for €89. This package include a 

26 point safety check and an efficiency report to let you know how efficient your appliance is. The service will be carried out by an RGII registered technician who can advise you on ways of improving or reducing your energy bills.

You can book online at electricireland.ie and the technician will call you in advance of appointment to let you know their estimated arrival time.