Small amount of finance for new business

Hi all, have just set up a new limited company with 2 directors. We are now looking for a small amount of finance (€10k). I have already filled out the expression of interest form for the local enterprise group and am meeting the local business development manager next week.
Just wondering who people think are the best to get a small amount of finance off, BOI, AIB etc. or are there others? and also what users think of these?
Cheers
Michael.

Hi Michael,

have you contacted your local County or City Enterprise Board There is one in every county and every urban district. They are there to support indigenous micro-enterprise who give employment to no more than 10 persons in that particular business. In general they give capital, employment or feasibility study grants. However ff your business is of a services industry or could cause displacement to another business alike in your area or would have succeeded without financial intervention anyhow they may not be able to financially asisst the company.

However regarding training and mentoring, they are second to none. The CEBs are funded by the Dept of ET&E, while they line up with Enterprise Ireland they are a seperate entity in their own right. Enterprise Ireland tend to be more interested in HPSU (high performance start ups) and export companies.

Nevertheless you should give them a call and see what they have to say, they really are the best out there on the ground, much more in touch with the local area than any of the banks.

hth

Hi pooh bear,
yes we have been in contact with our local enterpeise board and are awaiting a response from them. We predict that we will have a couple of expenses over the next number of weeks and so we want to borrow a small amount of money to cover ourselves in case business isnt as busy as we hope. basically we want opinions on who to boroow a small amount of money off, who has the best deals/rates and who to stay away from...

from (bitter) experience, go in looking for 20k and "let" the bank manager beat you down to 10k...

Enterprise Ireland tend to be more interested in HPSU (high performance start ups) and export companies.

Click to expand...

I'd steer well clear of enterprise ireland. They'll probably suffocate your budding business with red tape, and time wasting meetings etc. They're in no hurry to issue cheques. (Our company is an exporting HPSU, just my experience, your mileage may vary) Even if you're lucky enough to get approved, read the small print. You'll probably have to spend the money and document how you spent it, and pay for an accountant to to the paperwork etc... before they give it to you, maybe in 2012 or something.
You could, of course, want to follow the path of 'grant junkie' - but I don't think you really want that.

Can you get a personal loan? Maybe €5k per director?

For relatively small amounts you should try friends, family or a Credit Union.

If you have equity in your home, you should try to extend your mortgage as that is the cheapest form of finance.

If you borrow to invest in your business, you can write the interest off as an expense for tax purposes. It is irrelevant that the money is secured on your home.

As a side issue, one of the biggest causes of failures is for companies to underestimate the finance they need.

Brendan

Hi

You could try your local credit union. They might be able to help.
Best of luck with your new business.

If you've got a good business plan I'd say go to the bank.

Posts: 31


Re: Small amount of finance for new business
Hi pooh bear,
yes we have been in contact with our local enterpeise board and are awaiting a response from them. We predict that we will have a couple of expenses over the next number of weeks and so we want to borrow a small amount of money to cover ourselves in case business isnt as busy as we hope. basically we want opinions on who to boroow a small amount of money off, who has the best deals/rates and who to stay away from...

Hi Michael,

If you don't proceed with financing from the CEB please don't discount them for the future. They are an excellent source of information and training/mentoring. They really are worth staying in touch with, they are not like EI and are very personable (much more so than the banks!). Credit Unions are a great way of sourcing finance but the mentoring you will require in the future is invaluable. You'd be surprised how many well know companies started out with finance from a CEB.....

leghorn
Frequent Poster
Posts: 715


Re: Small amount of finance for new business
Quote:
Enterprise Ireland tend to be more interested in HPSU (high performance start ups) and export companies.
I'd steer well clear of enterprise ireland. They'll probably suffocate your budding business with red tape, and time wasting meetings etc. They're in no hurry to issue cheques. (Our company is an exporting HPSU, just my experience, your mileage may vary) Even if you're lucky enough to get approved, read the small print. You'll probably have to spend the money and document how you spent it, and pay for an accountant to to the paperwork etc... before they give it to you, maybe in 2012 or something.
You could, of course, want to follow the path of 'grant junkie' - but I don't think you really want that.

Can you get a personal loan? Maybe €5k per director?


Leghorn I think I understand where your coming from (ie nothing would surprise me with EI) but the CEB's are different to that of EI, while they will ask you to complete an Applciation form and present a Business Plan, pretty much everything else is run of the mill.

Just spoke to the business development manager this morning and he is pushing a crowd in dublin called - "first step finance" its aimed at start up business loans and he said the rates they charged are lower than that of BOI,AIB etc. for example first step 8% versus BOI 8.49%.
Any good or bad dealings with this crowd?

As a matter of interest what is the new business?