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Help is available for start-ups


AND IF ALL ELSE FAILS: There's help out there from the Dragons, from left, Sean Gallagher, Gavin Duffy, Norah Casey, Bobby Kerr and Niall O'Farrell. Photo: Paul Sharp

AND IF ALL ELSE FAILS: There's help out there from the Dragons, from left, Sean Gallagher, Gavin Duffy, Norah Casey, Bobby Kerr and Niall O'Farrell. Photo: Paul Sharp

AND IF ALL ELSE FAILS: There's help out there from the Dragons, from left, Sean Gallagher, Gavin Duffy, Norah Casey, Bobby Kerr and Niall O'Farrell. Photo: Paul Sharp

IF you've just set up your own company, brace yourself for one of your biggest financial headaches yet: you could easily need hundreds of thousands (if not millions) to run your business.

Some businesses pay hundreds of thousands of euro a year in commercial rates alone. Add to that your professional fees; your insurance bills; the cost of building -- or renting -- your business premises; your water charges, electricity, telephone and gas bills and you've probably already lost count of the number of zeros in your running costs. With bills like that, it's important to track down whatever financial support you can get. So what's out there?


UP TO €20,000

It is your feasibility study that will tell you whether your business idea stacks up or not -- and which could ultimately persuade a bank, state agency or investor to give you the money that you need to get your business off the ground.

The cost of a feasibility study can run into tens of thousands -- but you may be able to get a grant to cover half of that cost from Enterprise Ireland or your local city or county enterprise board.

The average feasibility study grant is between €5,000 and €7,000, according to Eibhlin Curley of the Dublin City Enterprise Board. In some cases, grants of up to €20,000 may be offered.

Enterprise Ireland offers High Potential Start-up (HPSU) companies feasibility grants of up to €15,000.

A HPSU is an innovative technology or service company expected to employ 10 people, or generate €1m in sales a year.


UP TO €150,000

If you've been less than a year-and-a-half in business, you may qualify for a business priming grant.

This grant, available from your local enterprise board, covers costs such as salaries, marketing, website development, trade fairs, rental accommodation, utilities and certain consultant fees.

It also can be used to pay for half of the cost of business machinery -- as well as half of the cost of an office refurbishment.

The average business priming grant is about €15,000, according to Curley. In some cases, grants of up to €150,000 are available. To qualify for the grant, you must have a valid tax clearance certificate.

You must also either create at least one new full-time job -- or commit finance to buy, or build, a property or asset for your business. You must also repay about a third of this grant after a certain time.

Not all businesses qualify for grants from their enterprise board.

"City and county enterprise boards can offer funding to manufacturing businesses and internationally traded services that are export-oriented," said Ms Curley.

"Funding is not available to local services, trades, professional services, import and distribution or retail."

Kerry County Enterprise Board generally offers grants to manufacturing, product assembly, craft and gift production, and food production companies -- as well as innovative, or niche, businesses.

"We would usually not support a business that would be detrimental to another, as that would lead to job displacement," said Fiona Leahy, business adviser with Kerry County Enterprise Board.

Enterprise Ireland also offers grants and other financial support for research and development companies.

BANKS UP TO €30,000

As State grants usually only cover about half of certain business costs, chances are you will have to raise money elsewhere.

Ask your enterprise board if it can advise any banks that are worthwhile approaching. Ulster Bank for example has partnered with Dublin City Council and Dublin City Enterprise Board to provide loans of up to €30,000 for start-ups in the Dublin city area.

The interest on the loans, which are available under the Ulster Bank Dublin Lord Mayor's Fund, is a variable rate of 4.1 per cent.

For more information, call Ulster Bank on 1800 283096.

In a start-up situation it can be difficult to prove that your business is viable as most banks want evidence of a successful trading history or a good credit history over the last three to five years.

If you have a business promoter, however, their personal credit or financial history may be enough to persuade a bank to lend you money. A realistic business plan with short-term cash-flow projections is also important.

Remember, your local credit union may be more amenable than your bank.



If you have no luck with your bank or credit union, you may be able to raise money from a business angel -- usually a former entrepreneur who is willing to back a start-up company that he believes will make him or her money.

The business angel usually gets a stake in your company in return for its investment.

One business angel could invest between €25,000 and €250,000 in a start-up, but a group of them could invest around €1m, according to Mark O'Sullivan, regional manager of the Business Angel Partnership.

If you're interested in arranging a business angel for your start-up through the Business Angel Partnership, you must first submit your business plan -- and if it's approved, the partnership then contacts investors who may have an interest in investing.

"Anyone who has got support from Enterprise Ireland, or an enterprise board, will almost automatically qualify for support from us," said Mr O'Sullivan.

"We're interested in any promising early-stage company," he adds.

Sunday Indo Business