Microfinance IrelandMicro Business Loans

Presentation to Tipperary Enterprises in partnership with

Tipperary LEO

Action Plan for Jobs

Banks

Credit Review Office

Microfinance Ireland

LEOs

Partial Credit Guarantee Scheme

Independent review of Bank declines

Micro-Enterprise Loan Fund launched October 2012

First-Stop-Shop micro-enterprise support structure

Department of Jobs Enterprise and Innovation Initiatives for SME’s

Designed by Government to provide loans to newly established or growing microenterprises across all industry sectors with commercially viable proposals that do not meet the conventional risk criteria applied by commercial banks.

Not intended to replace any current bank lending – Banks continue to be the dominant supplier of credit

Requirement for a Bank decline of Loan being abolished

Microenterprise Loan Fund Scheme

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

Definition of a Microenterprise?

5

Loan Features

Loan Size

Term

Interest Rate

Security

Flexible Terms

Co-Funding

Purpose of Loans

Sectors

Borrower

Loans between €2k-€25k

Terms up to 5-years (3-years working capital / 5-years capex)

8.8% APR fixed interest rate (discounted by 1% for LEO referrals)

Unsecured

Moratorium / interest only / phased drawdowns / bullet repayments*on a case-by-case basis

Co-funding with banks welcome

Working capital/purchase of equipment/set-up costs/Marketing

All industry sectors provided for

Sole Trader / Partnership / Limited Company

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 –

1250 jobs supported

€8.5m approved over 500 micro-enterprises

60% approval rate

60% start-up businesses / 40% existing businesses

Business Activity To Date

Microfinance Ireland Supporting the Government’s Action Plan for Jobs

• 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

Assessment Criteria

As part of the Action Plan for Jobs

Joined up thinking LEO supports the client / MFI lends

First Co-Branded LEO / MFI Product launched September ‘14

Microfinance do the administration of the loan

LEO’s screen the application

Unified decision making – local assessment, local intelligence

Offers additional financial support to the LEO client base

LEO - Microfinance Partnership

Loans through the LEO network get a 1% discount

Application assistance for LEO clients

Provision of mentoring as required

Local application Pre-screening

Final assessment decision and risk rests with MFI

LEO / Microfinance Ireland Loan Product

Supporting Documentation

Start-Up Business Existing Business

1. MFI Application Form2. Business Plan to include - - Cash flow projection (3-years) - Summary P&L (3-years)3. Promoter(s) CV4. 6-mts personal Bank stmts* Tax Clearance Certificate required for drawdown

In addition to 1 – 4:

• Recent Management A/Cs• Latest Certified Accounts • 6-mts business Bank stmts• Aged Debtors/Creditors List

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 Contact your local LEO office

www.localenterprise.ie

Send completed applications with supporting documentation direct by post to

Microfinance Ireland

Jefferson HouseEglinton RoadDonnybrookDublin 4.

www.microfinanceireland.ie

or

Application forms available online

www.microfinanceireland.ie

Or

www.localenterprise.ie