Interest rate cut on the way for small businesses
Small business loans are set to become more affordable, thanks to an interest rate cut announced by Microfinance Ireland in Dublin last week (June 17th, 2016).
Microfinance Ireland, the government funded not-for-profit lender to micro-enterprises, will reduce its lending rate by 1% for all new lending from July 1st 2016. Furthermore, Microfinance Ireland, in partnership with the network of Local Enterprise Offices, has also launched a support programme to offer expert mentoring assistance to Microfinance Ireland-approved loan applicants, as required. This mentoring will be provided through Local Enterprises Offices who work hand-in-hand with Microfinance Ireland and support micro-enterprises at local level across the country.
Micro-enterprises can apply for loans of between €2,000 and €25,000 through their Local Enterprise Office, or directly to Microfinance Ireland. From 1st July 2016, applicants seeking loan finance from Microfinance Ireland through their Local Enterprise Office can borrow at 6.8% APR which is a highly competitive and fixed interest rate for those small businesses which are currently finding it difficult to access finance from traditional sources. The standard fixed rate of 7.8% APR will be applicable to businesses which apply directly to Microfinance Ireland and also reflects a reduction of 1% in the standard rate, as and from that date (July 1st).
In addition, approved Microfinance Ireland loan applicants can also benefit from mentoring services, arranged through the Local Enterprise Offices and tailored to the specific requirements of the business.
Garrett Stokes, the newly-appointed Chief Executive of Microfinance Ireland, said: “The interest rate cut and mentoring support will mean our business loans are now even more affordable. It also means that our clients can receive expert one-to-one mentoring through their Local Enterprise Office, greatly increasing their chances of commercial success and helping to sustain jobs in the longer term. Since Microfinance Ireland was set up in 2012, we have approved €14.1m in loans to 944 businesses supporting 2,148 jobs. We’re happy to support all types of micro- businesses, helping to spread the economic recovery right across the country.”
Paul Reid, on behalf of the Local Government Economic, Enterprise and Tourism Committee, said: “Local Enterprise Offices, as the one-stop-shop for small businesses around the country, are very happy to continue to work in close partnership with Microfinance Ireland, to provide a range of both financial and non-financial supports for micro-businesses. Both the interest rate cut for new lending and the provision of mentoring for Microfinance Ireland clients are very positive steps in supporting local enterprise, improving economic recovery and developing business growth overall.”
Niall O’Donnellan, Head of Entrepreneurship in Enterprise Ireland, commenting on this announcement said: “I am delighted that mentoring services are now available for Microfinance Ireland clients through Local Enterprise Offices. This is a valuable support for micro-enterprises ensuring they can reach their potential.”