By Company Bureau, 26th September 2018 (Updated 6th August 2020)
Ireland is ideally positioned as a hub for innovation and entrepreneurial spirit on the western edge of the European Union. With the uncertainty around Brexit and the Covid-19 pandemic still looming, one thing that remains constant is an abundance of business funding options available to Irish Companies and Startups. Personal finances are the backbone of the entrepreneurial world but in many cases, the necessary funding isn’t available. We have separated the various sources of business funding in Ireland into broader categories for you to explore below.
A commonly used option for Irish Companies and Startups are state grant schemes or state funding sources. Local Enterprise Boards have a designated budget towards the growth of new and existing business in their area.
Enterprise Ireland is the state agency responsible for supporting the development and growth of Irish enterprises in global markets. They provide capital funding and support to Irish businesses through phases of startup, growth and innovation. The mission of Enterprise Ireland is to support sustainable economic growth, regional development and secure employment. Click here to view the business funding supports available from Enterprise Ireland.
The IDA is a semi-state entity promoting Foreign Direct Investment (FDI) through a wide range of support and funding for foreign investors who want to expand their operations in Ireland. The IDA works with over 1,200 clients providing employment grants and free assistance to relocate, establish and grow their operations in Ireland. Click here to view the business supports available from the IDA.
The Local Enterprise Office (LEO) provide funding, advice and support on starting or growing a business in Ireland. There are many LEO locations throughout Ireland to assist new and existing businesses including; entrepreneurs, start-ups and small business looking to expand their operations. Click here to learn more about the services offered by the LEO.
- VAT Cut – The standard rate of VAT will be reduced from 23% to 21% starting from 1st September 2020 and lasting for a 6-month period.
- Employment Wage Support Scheme – This new scheme will succeed the Temporary Wage Subsidy Scheme and run until April 2021 to help businesses through this period of restricted trading.
- Restart Grant – The maximum payment is increased from €2,000 to €10,000 to assist businesses to cover the cost of reopening and re-employing staff.
- Employment Supports – incentives include €3,000 for each apprentice taken on as well as 10,000 funded work experience places and recruitment subsidies.
As touched on above, funds like Enterprise Ireland invest in Irish Startups and Companies during both the initial and expansion phases of business. These funds are designed as profit-making entities and have a rigorous interview and presentation procedures in order to obtain any kind of capital funding. These funds are typically industry-specific, specialising in particular company types and as such business plans and strong business projections are required.
The NDRC Launchpad programme has been in operation for over a decade, backing more than 250 Irish companies. The NDRC is an early-stage investor in tech companies which has recently been ranked as the number one IT incubator in the world. They provide the people, the workspace, time and investment needed at the earliest stages of company creation. With the support of the NDRC, tech startups are able to become scalable ventures worthy of commercial investment.
Business Angels, also known as “informal private investors” are another increasingly popular option for business funding in Ireland. These are private individuals who invest capital in companies during their early stage of development. In addition, they contribute their know-how or experience in company management and can offer valuable expertise and guidance. These investors usually seek active participation in the companies they invest in but they can be difficult to find. Enterprise Ireland, IntertradeIreland and the Business Innovation Centres (BICs) actively work together to build networks of Business Angels, please visit Enterprise Ireland for more information.
Crowdfunding uses online platforms to raise capital for a business or a business idea. Hundreds or even thousands of people can contribute small amounts of money to support the launch of a new product or venture that they believe will be successful. Crowdfunding platforms allow lenders to invest in companies based on prepared online presentation and communication about a planned product. Thanks to advances in technology and innovation crowdfunding platforms are gaining popularity as low-risk business funding options.
With relaxed regulations, there are more options now than ever before so businesses do not have to resort to burdensome and taxing loans to launch a new company or product. International platforms such as Kickstarter and Indiegogo are very popular and have assisted Irish-based companies to enter the market. There are also many Irish crowdfunding platforms to explore such as Linked Finance, iFundraise, and Fundit.
Please be aware that are various Types of Crowdfunding so entrepreneurs should familiarise themselves with the options before choosing the platform and structure they want to work with.
Banks and Business Lending
From Microloans to Big Banks, institutions are encouraging businesses to avail of their lending services again after shaking off the shroud of the global downturn. Almost universally, credit institutions are offering business loans to Irish Companies and Startups with the latest Central Bank figures placing approx. 90% of business loans being issued to the SME sector. While banks pulled back from the business loans sphere during the recession, the security regularity and flexibility of bank finance presents itself as a strong option for Irish Companies and Startups.
The AIB Seed Capital Fund provides funding from the €53 million available to technology companies. The fund is managed by executives with extensive expertise in making seed and early-stage investments, adding value and facilitating business success. Click here for more information on the AIB Seed Capital Fund.
Should you require any assistance in setting up Irish Companies or Startups or would like any more information on any of Banks and Business Lending, Crowdfunding, Capital or State funding, don’t hesitate to call 01-6461625 or complete our Contact Form and one of our team will contact you within two business hours.
Disclaimer This article is for guidance purposes only. It does not constitute legal or professional advice. No liability is accepted by Company Bureau for any action taken or not taken in reliance on the information set out in this article. Professional or legal advice should be obtained before taking or refraining from any action as a result of this article. Any and all information is subject to change.