Module 6 access to finance

MODULE 6:
Access to
finance for those with
failed business pasts

In this module, you
will:
o Get to know the 4Cs –
character, cash flow, capital
and credit
o Learn tips to improve your
credit rating
o Learn more about Bankruptcy
and how to move on from it
o 5 ways to Fund your RESTART
Business – Grants &
Investment Incentives,
Accelerators, Microfinance,
Crowdfunding, Angel
Investors
o Overcoming a “No” when
seeking funding

The 4Cs – character,
capital, cash flow and
credit
In Module 5, we focussed on Reputation
and it’s importance in restarting in
business. Here in Module 6, the first C
we will look at continues this theme –
it’s Character.
A man’s* character is like his shadow,
which sometimes follows and sometimes
precedes him, and which is occasionally
longer, occasionally shorter, than he is.
- Madame de la Rochejuquelein
(*And also applies to woman too of course !)

1. Character
In accessing finance, character relates to
factors such as:
 number of years experience in business
 history of the founders
 openness to share information
 media coverage
 liens, judgments or pending judgments
 comments from references.
And plans for the new business in terms of
 proposed location and business size
 business structure
 number of employees

2. Cash Flow Capacity
 At it’s most basic, cash flow assesses the
ability of the business to pay its bills, i.e., its
capacity.
 For many restarters, this is an area of fear and
past mistakes.
 One of the biggest tripwires for business is
the time gap between when you pay your
employees and suppliers and when you
collect from your customers or clients.
 If you don’t have sufficient cash flow in your
business, that gap can seem like a chasm.

2. Cash Flow Essentials
 Know when you’ll break even - Knowing the point at which you’ll break even
won’t necessarily impact your cash flow, but it will give you goals to strive for
and a ready-made target for forecasting where your cash should go in order to
reach that goal.
 Always maintain a cash reserve - Every startup should expect unplanned events.
They happen to everyone, even with the best plans in place. But your survival
likely will depend on how you traverse those shortfalls. Having some cash
reserves for those lean times lessens the blow, the stress and the distractions,
and allows you to stay focused on growing your business.
 Spend only on essentials - Part of your forecasting model should give you a
strong view of the necessary expenses that are coming down the pipe. Be frugal,
outside of the most essential purchases, you want to minimize spending and
eliminate costs that aren’t essential to your operation until you’re profitable.
https://www.entrepreneur.com/article/275813

2. Cash Flow Capacity - Projections
 Firstly, gain an insight to cash flow
essentials and prepare a future cash flow
that will be as close to reality as possible.
Resist the urge to inflate or exaggerate –
this will not help your business nor give
confidence to others
 Annual, quarterly and even weekly
projections may all be essential depending
on the circumstances. Such careful
planning and forecasting should help you
plan for problems before/as they happen.

2. Cash flow – How to maximise it!
Without wishing to sound mercenary about it, cash flow management consists
of finding ways to delay cash outlay while accelerating cash collection, and there
are various accepted techniques for doing so.
 Deposits - Insist on deposits being paid when orders are placed, thus
spreading the income. This can make a huge positive impact especially where
work is frontloaded on an order.
 Credit checks - One way to reduce late or non-existent payment is to institute
a policy of credit checks for new non-cash customers.
 Bundle - Combining products and services can be a way of increasing the up
front price (and therefore profit) by offering added value that costs you
nothing in the short term. For example maintenance and support packages
sold when goods are bought.

 Operate various payment policies - Monitor payment activities and adjust
your policies where necessary. For, instance, you might implement a cash on
delivery model for customers who are consistently slow in paying.
 Increase the price on the back-end - New customers are attracted by low
prices but these prices may not be sufficiently profitable for your business’s
needs. However, you can balance out low profits from new customers by
setting a higher price on products and services that you subsequently sell to
them. In other words, your initial product or service can act as a form of loss
leader in the expectation that your future revenues from the sale of other
products and services to these customers will more than compensate for the
initial low margins.

 Discounts - Encourage customers to pay up front by offering a small discount
for quick settlement of their invoices.
 Shed old stock - If you have old or outdated inventory that is costing you
money, sell it at the best price you can get for it. Use marketing techniques
to promote the wonderful opportunity this presents to buyers
 Pre-selling - Customers will sometimes pre-order, at a preferential rate,
buying (and sometimes even paying) in advance in order to ensure that they
have the product when they want it.

 Invoices - Always, always issue them as soon as
possible; at worst, an issued invoice is pending
payment; an unissued invoice will never be
paid. Having issued them, track them so that
you know when and who to chase up when the
time comes.
 Repeat business - Retail businesses tend to be
low-cost, low-profit and reliant on volume of
sales. In such businesses, repeat customers are
not only desirable but essential (you may not
even be seeing a profit until the third or fourth
sale). Use strategies such as frequent-shopper
programmes and loyalty cards to encourage
patterns of repeat buying behaviours.

EXERCISE 1: Cash Flow Forecast
Your Cash Flow Forecast helps you to determine if the business will have
sufficient funds to continue in business without stress. The forecast includes all
cash flows of the business including capital and current items. The information is
usually presented on a monthly basis. In forecasting, the business seeks the
answers to the following questions in respect of each period:
1. What is the current or opening cash balance of the business?
2. How much cash will come into the business and when will the business receive
it?
3. How much cash will the business pay out and when will payments be made?
4. What is the closing cash balance at the end of the forecast period?
5. Can the business manage its cash so that any negative cash balances arising do
not exceed agreed overdraft limits?

3. Capital and
Working Capital
 Capital refers to the current
available assets of the business
owner, such as property, land,
savings etc. available for
development or investment of the
business. In terms of business
loans, capital is assumed that these
could be used to repay debt if
income should be unavailable.
 Working capital – the working
capital of a business is that which
used in its day-to-day trading
operations. It is calculated by taking
away the current assets minus the
current liabilities.

4. Credit – what you need to know…
 Business Credit is typically a bank loan to a
company, also called commercial lending or
commercial credit. Credit from suppliers is
also a valuable source.
 Most businesses will need credit at some
time, whether they are starting up,
restarting or expanding.
 Business Credit Score - Your business credit
score is a number that tells lenders whether
or not you are a good credit risk. The higher
the number, the better the score.

4. Credit - Rebuilding Credit after
Bankruptcy
There is no way to erase bad credit from your credit report, but you can improve
it. To start you need to get a copy of your credit report and review it.
What is a credit report?
 A credit report contains information about:-
. your borrowing and repayment history
. your mortgage, car loan, credit card, store credit
. any applications you have made for credit
. any queries on your credit report is also stored
 A credit report can be summarised by a number known as a 'credit score'. It
describes your 'credit worthiness' at a particular point in time. Not everybody
has a credit score- if you've never applied for credit or used credit, you won't
have a credit history.
Source: http://www.consumerbadcreditguide.com/ie/ , http://www.rte.ie/tv/fourlive/2010/0927/page1388391.html

What is a credit report used for?
 When you apply for a loan, your credit report is used by your lender when
assessing whether to extend credit to you.
 A lender can decide to rely entirely on the credit score or use it in
conjunction with their own decision-making criteria.
 When you apply for credit, that is also recorded on your credit report
 If you are refused by one lender it is likely you will need to take a different
approach to standard lenders
 Specialist lenders exist for those with particular requirements but be
careful to examine their offering very carefully as it is likely to come at a
high cost
Source: http://www.consumerbadcreditguide.com/ie/ , http://www.rte.ie/tv/fourlive/2010/0927/page1388391.html
4. Credit - Rebuilding Credit after
Bankruptcy

1. Firstly, make sure all the information on your credit report is accurate. If
you find an inaccuracies, you should file a dispute with the appropriate
credit reporting agency.
2. Try to pay off all or any accounts that are currently in collections or make
payment arrangements with the creditor to pay off the balance monthly.
Also, you should try to pay off any judgments that you may have against
you.
3. Thirdly any credit card that is over 50% of the available credit line should
be paid down to under half of your total credit line. Your credit score is
lowered when your available balance is over 50% of your total credit line
4. Borrowing can actually improve your credit rating ….. You have credit
options (more on raising finance later in this Module)
Source: http://www.consumerbadcreditguide.com/ie/
4. Credit - Steps to improve your
credit rating

Credit Option 1 –
Secured Loan
 Secured loan: This comes in two
varieties, and most often is offered by
credit unions. One kind of secured loan
involves borrowing against money you
already have on deposit. You won’t be
able to access that money while you’re
paying off your loan.
The other kind can be made without
cash upfront, though the money loaned
to you is placed in a savings account and
released to you only after you have
made the necessary payments. In return,
the financial institution agrees to send a
report about your payment history to the
credit bureaus.

Credit Option 2 –
Secured Credit Card
 Secured credit card: This kind of card is
backed by a deposit you pay, and the credit
limit typically is the amount you have on
deposit.
 A secured card often has annual fees and
may carry high interest rates, but you
shouldn’t need it for the long term.
 It can be used to mend your credit until you
become eligible for a better, unsecured card.
 Make sure they report your payment
monthly to the major credit bureaus. Making
your payments on time monthly will increase
your credit rating.

Credit Option 3 - Co-signed credit
card or loan
 Co-signed credit card or loan: This can help your score, but you
need to have a friend or family member with good credit
history who is willing to co-sign for you.
It’s a big ask: A co-signer is risking his or her credit reputation for
you, will be responsible for the full amount if you don’t pay, and
may face limits on personal borrowing because of the
additional debt obligation.
 A co-signed card or loan can damage relationships if you don’t pay
as agreed.

Credit Option 4 -
Microcredit &
Microfinance
 Microcredit usually refers to small
loans offered, often without
collateral, to an individual or
through group lending.
 Microfinance, however, refers to a
broader range of financial products
and services, including loans,
savings, insurance, transfer
services and other financial
instruments targeted at low-
income clients.
(More on this later in the module!)

Bankruptcy and
Entrepreneurship
 50% of enterprises do not survive
the first five years of their life and
of all business closures,
bankruptcies account in average for
15%.
 Only 4-6% of bankruptcies are
fraudulent, however public opinion
makes a strong link between
business failure and fraud.
 Many honest bankrupts feel
discouraged to re-start due to the
stigma and difficulties or
discrimination faced after a
bankruptcy. We have looked at this
in honest failure in Module 5.
Source: EU Commission Report on A SECOND CHANCE FOR ENTREPRENEURS
http://ec.europa.eu/DocsRoom/documents/10451/attachments/1/translations/en/renditions/native

What is bankruptcy?
 Bankruptcy is a settlement of the debts of someone who is
wholly or partially unable to repay their debts. It deals with
both secured and unsecured debt.
 The purpose of the bankruptcy is to distribute your assets
fairly among your creditors and protect you from these
creditors. The distribution is done through a court official
 In Ireland, the Official Assignee in Bankruptcy, who is based
in the Insolvency Service of Ireland (ISI) manages its
Bankruptcy Division.
Source:
http://www.citizensinformation.ie/en/money_and_tax/personal_finance/debt/personal_insolvency/what_is_bankruptcy.
html

Bankruptcy and
Entrepreneurship in
Europe
 More and more countries have
started viewing bankruptcy as a
learning experience for the
entrepreneur
 The EU commission has set a target of
maximum 3 years to resolve
insolvency, this is key to helping
honest second chance entrepreneurs
to restart
 Ireland performs above the EU
average in 6 and is top of the class in
two, “second chance” and
“internationalisation”. Second chance
refers to ensuring that honest
entrepreneurs who have gone
bankrupt get a second chance quickly

Bankruptcy in Ireland – Recent
Changes (2016)
Up to 2013, it took people 12 years to qualify for a discharge. The Bankruptcy (Amendment) Act
2015, which was signed into law on 25 December 2015, provides for several changes to the rules
on bankruptcy. It includes the following provisions, which came into effect on 29 January 2016:
 Reducing the normal duration of bankruptcy from 3 years to 1 year (up to December 2013 it
was 12 years)
 Returning ownership of the bankrupt person’s home to them after 3 years (subject to any
outstanding mortgage) unless it must be sold to pay creditors
 Reducing the maximum duration of bankruptcy payment orders from 5 years to 3 years, except
in cases of non-co-operation or concealment of assets
 Extending the duration of bankruptcy in cases of non-co-operation or concealment
 Streamlining and clarifying the processes
 Provisions to remove the requirement for a statutory sitting of the High Court came into effect
on 1 June 2016.
 There are transitional provisions for people who are already in bankruptcy.
Read more about the changes on isi.gov.ie (pdf).

Useful links - IRELAND
 ISI detailed information on
bankruptcy
 ISI debtor’s guide (pdf)
 ISI Bankruptcy scenarios (pdf)
 www.backontrack.ie website
(shown right) also has user-
friendly information and guides
on bankruptcy.

EU Insolvency
Regulation
 The Regulation designates bankruptcy as
an insolvency proceeding which can
benefit from cross-border recognition.
This means that a debtor availing of
bankruptcy will gain the same
protection against creditors in most
other EU countries that they receive in
Ireland, subject to and in accordance
with the Insolvency Regulation.
 Aims to simplify formalities governing
the reciprocal recognition and
enforcement of judgments in cross-
border insolvency matters.
 The 3 processes introduced by the
Personal Insolvency Act also come under
this Regulation.

Discharge from bankruptcy in
Ireland
You are automatically discharged from bankruptcy 1 year (formerly 3 years)
after the order of adjudication. Your name will remain on the register, as a
discharged bankrupt. If there is an Income Payment Agreement or an
Income Payment Order in place, you will still have to comply with it until it
expires. These arrangements can last up to 3 years (formerly 5 years).
You can also be discharged from bankruptcy if you meet certain conditions,
as follows:
 If your assets have been sold and all your costs, fees, expenses and
preferential debts (such as certain tax debts) have been paid, it is
possible for you to be discharged from bankruptcy even if you have not
paid all of your debts.

Discharge from bankruptcy in
Ireland
 If your creditors have been paid in full or if all of your unsecured
creditors give their consent
 After agreeing and paying a settlement with at least 60% of your
unsecured creditors (called an Offer of Composition)
 When you are discharged from bankruptcy on grounds 1 to 3 above, any
money or property remaining in your estate is returned to you, provided
all the costs, court fees, expenses and preferential debts of bankruptcy
are paid.
 If you are automatically discharged after the end of the normal
bankruptcy term without having satisfied your creditors on grounds 1 to
3 above, after discharge all your assets continue to vest in the Official
Assignee for payment of all your debts, costs, fees and expenses in
bankruptcy.

4 ways to Fund your
RESTART Business
For any start up business, the challenge of
putting together a financial investment package
can be daunting. It can be even more daunting if
this is your second time to do and the first time
didn’t work out so well. When going to the bank
is not an option, there are still many public and
private funding opportunities; however knowing
where to look is always a challenge.
1. GRANTS – LOCAL & NATIONAL
2. ACCELERATORS & INCUBATORS
3. MICRO FINANCING (mentioned earlier)
4. CROWDFUNDING
Note the information is correct as of January
2017 and the authors can accept no
responsibility for the information provided.

SUCCESS in SECURING GRANT
FUNDING
Like making a cake, it depends on
ingredients (you and your project)
and following a good recipe !
1. Grants – Local, National and European
In the slides that follow we share our best practice, tips and tricks for sweet
grant success. Once you have the ingredients and the recipe right, you will
be able to seek funding at a local, national or even European level.

FORGET ABOUT THE MONEY! (AT LEAST
INITIALLY…) & DEFINE YOUR PROJECT
The primary concern of funders is that your
project is well planned and that it will truly
make a difference.
In making an effective application
important questions to start with include:
What are you trying to achieve?
Fund start up costs - new production
facility, purchase new equipment ?
Make a new product range?
Go on a course/ do some training ?
Complete research and development
Top Tips for Success in
Writing a Grant
Application

It is essential that you address how does your project fulfil the funder’s aims?
Link your project to the funder’s key criteria and show how your project
furthers their aims and objectives. This means that you need to research your
funding target thoroughly.
Why ?
Up to 50% of applications received by funders do not meet their published
criteria
As a very basic minimum you should read the guidelines published by the
funder. Consider: the funder’s motivation, the format for applying, the level of
funding, submission deadlines, eligibility and the decision making process.
Top Tips for Success in Writing a Grant
Application – think about the funders aims

• What are the real and positive differences the
funding will make?
REMEMBER – ‘PEOPLE GIVE TO PEOPLE…’
• Be creative, challenging and engaging about
your idea, this is your opportunity to
distinguish yourself from others.
• Build your credibility and be professional!
One of the primary reasons why applications
get funded is that the funders are convinced
that the applicant organisation is well
organised, has a good track record and is a
capable promoter to carry out the proposed
project. As we have outlined earlier in this
course, be honest about your past experience
showing what you have learnt from same.
• Approach the application with a high degree of
professionalism
Writing a Grant
Application – what
difference will you make?

o Don’t assume that the funder will have any knowledge of your business,
background or new project. Describe your project truthfully and succinctly.
o Break down the requirements of the application into bite-sized pieces
o Think carefully about presentation; most funders will read many
applications and if an application is easy to read and well presented it makes
their lives easier.
o Do not over-promise – you will one day have to deliver
o It always takes a lot longer to put an application for funds together than you
think !
Application

o Remember it is competitive – your best foot forward
o Write in an interesting way that captures the energy & spirit of your project
(journalist style)
o The power of evidence of need. It is not sufficient to say: “we know … we
think….” back it up with relevant research
o Show that your project is additional – not competing with others
o And last but not least, definitely talk to the funding agency before you apply
Application

Ask yourself, ‘Why wouldn’t they fund
this?
• Often a good way to strengthen
your funding application is to try
and ‘pick holes’ in it.
• Having identified the weaknesses
you can then work on putting them
right.
Writing a Grant
Application

ENTERPRISE FUNDING OPPORTUNITIES
In Ireland, we are fortunate to have a positive funding environment with
opportunities. In fact, there are over 170 different Government supports
for Irish start-ups and small businesses.
A good resource – https://www.supportingsmes.ie/BusinessDetails.aspx
This Online Guide is to help Irish start-ups and small businesses navigate the
range of Government supports to see which applies to your circumstances
Grants – Local: Enterprise
Funding Opportunities in Ireland

The Local Enterprise Office is a First Stop Shop for anyone seeking information
and support on starting or growing a business in Ireland. There are 31 teams
across the Local Authority network who will guide people interested in starting
up a new business or already in business including; entrepreneurs, early stage
promoters, start-ups and small business looking to expand.
They provide direct financial supports to micro businesses (i.e. 10 or less
employees)
Grants – Local: WHO ARE THE
LOCAL ENTERPRISE OFFICE in Ireland ?

The LEOs are focused on promoting
entrepreneurship and self-help and
provide services under four headings:
• Business Information and Advisory
Services;
• Enterprise Support Services;
• Entrepreneurship Support Services,
• Local Enterprise Development
Services
www.localenterprise.ie
Grants – Local: WHO ARE THE
LOCAL ENTERPRISE OFFICE? in Ireland

A Priming Grant is a business start-up grant, available to micro enterprises within the
first 18 months of start-up. The max Priming Grant payable is be 50% of the investment.
4 Expenditure headings:
• Capital items
• Salary costs (typically Employment grants of up to €10,000 per employee, including
yourself, are obtainable. )
• Consultancy/Innovation/Marketing costs
• General overhead costs
Criteria:
• A business which on growth will fit the Enterprise Ireland portfolio (more later)
• A manufacturing or internationally traded services business
• A domestically traded service business with the potential to trade internationally
• Deadweight and displacement - WHAT IS SPECIAL ABOUT YOUR BUSINESS IDEA?
• All grants of a value greater than or equal to €40,000 need Enterprise Ireland approval
Let’s look at their grants in more
detail– Priming Grant

CAPITAL/MARKETING/CONSULTANCY COSTS
Specialist marketing €1,675.00
Technical realisation of online database €4,680.65
Equipment €3,777.19
Insurance €2,447.80
Consultancy costs (industry specific contracting expertise) €2,250.00
TOTAL COSTS €14,830.64
Of which 50% grant requested €7,415.32
EMPLOYMENT
2.5 EMPLOYMENT GRANTS based on promoters x 2
and 1 part time Administrator €25,000
TOTAL GRANT REQUEST €32,415.32
Of which 50% was awarded to the company. Note some LEOs take differing approaches
Priming Grant funding example

BUSINESS EXPANSION GRANT is designed to assist the business in its growth
phase after the initial 18 month start-up period. Same criteria and funding
levels apply as with Priming Grant.
Business that had availed of a Priming Grant will be ineligible to apply for a
Business Expansion grant until 12 months after approval/drawdown date of
Priming Grant whichever is the later
PLEASE NOTE – part of the LEO grants are repayable
Typically 30% of your grant amount.
(for example – 30% of €30,000 = €9,000 is repayable @0% over 3 years =
€3,000 p.a.)
Business Expansion Grant

Feasibility/Innovation grants for those investigating new innovative
business projects.
Assistance to a maximum of 60% of the research, design, and prototype
development costs may be awarded subject to a maximum grant of
€10,000*.
LOCAL ENTERPRISE OFFICE
– Other grants

Contact the LEO for initial chat. www.localenterprise.ie/ your county
You must
• complete the official application form, provide a business plan and financial
projections
• Provide quotations (under €5,000 = 1 quote, over €5k = 3 quotes)
TIPS
• The categorisation of your business is very important
• If struggling, ask for mentor support
• Match funding needs to be in place
• As for all funders – a compelling business plan is essential
• Grants are payable in arrears on the basis of expenditure (net of VAT) being
properly vouched- you need to factor this into cashflow
LOCAL
ENTERPRISE OFFICE – The Application
Process

When assessed by LEO staff, your application will then be presented at the next
available Evaluation Committee meeting.
From this point it will take approximately 6-8 weeks for your application to be
processed. The Evaluation & Approvals Committee will then make a decision to
either approve or reject the application.
Applicants will then be notified in writing of the decision of the committee.
If your application is approved you will receive a letter of offer along with
conditions of grant aid and a checklist of how you can claim the grant assistance
approved.
Grants – Local: LOCAL ENTERPRISE
OFFICE – The Steps

Under 35 ? It is a really good idea to apply to the Irelands best young
entrepreneur competition http://www.ibye.ie/. Each county has a
investment fund of €50,000 to award to Category Winners
Grants – Local: Best Young
Entrepreneur Ireland

MENTORING
A panel of business specialists – finance, marketing, technical etc. who
contributes independent, informed observation and advice to aid decision
making.
Who Qualifies?
The Mentor Programme is open to both new and existing businesses located
within the LEO region.
Grants – Local: LOCAL ENTERPRISE
OFFICE – OTHER SUPPORTS WORTH
TAPPING INTO ….

 Applicant business must be registered and
trading for at least 12 months;
 Vouchers are available to a maximum value of
€2,500 or 50% of eligible expenditure
(exclusive of VAT), whichever is the lesser;
 Must attend an information session
 Voucher approval must be gained prior to
incurring any expense;
 Own labour is not an eligible expense;
 Third party costs only will be considered.
https://www.localenterprise.ie/Discover-Business-
Supports/Trading-Online-Voucher-Scheme-/2015-
LEO-Online-Voucher-Application-Form.pdf
Grants – Local: LOCAL
ENTERPRISE OFFICE –
Online Trading
Voucher

 IT consultation;
 Development or upgrade of an e-commerce website;
 Implementing Online payments or booking systems;
 Purchase of Internet related software;
 Purchase of online advertising (this purchase cannot
make up any more than 30% of approved Voucher costs
and can only be drawn down in one payment phase);
 Developing an app (or multiplatform webpages);
 Implementing a digital marketing strategy i.e. Social
media marketing;
 Consultation with ICT experts for early stage adopters
of online strategy;
 Training/skills development specifically to establish
and manage an on-line trading activity.
Grants –
Local: LOCAL
ENTERPRISE
OFFICE –
Online Trading
Voucher –
what’s
covered?

The Department of Arts, Heritage,
Regional, Rural and Gaeltacht Affairs is
the programme manager for LEADER.
In Ireland, the overall LEADER budget is
€250m and it is focused on "promoting
social inclusion, poverty reduction and
economic development in rural areas.“
It is implemented through Local Actions
Groups – find yours on
https://www.pobal.ie/Publications/Docu
ments/Local%20Action%20Groups.xlsx

Grants – Local:
LEADER 2014-2020

Each County has a Local Community Development Plan which may have differing priorities
LEADER 2014-2020 - An overview
of the LEADER programme funding
streams ..
Leader Theme Economic
Development,
Enterprise
Development and Job
Creation
Social Inclusion Rural Environment
Leader Sub Theme Rural Tourism Basic Services targeted
at hard to reach
communities
Protection and
Sustainable use of
Water Resources
Leader Sub Theme Enterprise
Development
Rural Youth Protection and
Improvement of Local
Biodiversity
Leader Sub Theme Rural Towns Development of
Renewable Energy
Leader Sub Theme Access to Broadband

No repayability!
Funds are more limited than previous Leader programmes....
• Maximum grant rate of up private promoters is 50%
• Up to 75% for community organisations
• Training activities may be funded up to 100%
• Benefit in kind may also be used.
The Process
1) Expressions of interest form – note calls on are on open and closed basis.
2) Eligible in Principle notification which invites you to make a full application.
(The submission of an Expression of Interest for LEADER grant assistance or
this acknowledgement itself may not be taken as an indication that the
project is eligible or will be awarded grant aid)
Grants – Local: LEADER 2014-
2020 - Worth noting..

Grants – National: Who are
Enterprise Ireland?
Enterprise Ireland is the state agency responsible for supporting the
development of manufacturing and internationally traded services
companies.
They provide funding and supports for companies - from entrepreneurs with
business propositions for a high potential start-up through to large
companies expanding their activities, improving efficiency and growing
international sales.
The definition of a high potential start up is critical.
‘likely to achieve significant growth within three years with sales of €1m per
annum and employment of 10 or more’

Grants – National:
Competitive Feasibility
Fund (CFF)
The objective of the Competitive Feasibility Funds is to assist new start-up
companies or entrepreneurs, to investigate the viability of a new growth-
orientated business proposition which has the potential to become a High
Growth Potential Start-up (HPSU).
These are companies that can develop scalable innovative technologies,
products or services for sale on world markets.
The Fund support projects that are likely to achieve significant growth within
three years (sales of €1m per annum and employment of 10 or more)
Must be a manufacturing or an internationally traded services business
https://www.enterprise-ireland.com/en/funding-supports/Company/HPSU-
Funding/Competitive-Start-Fund-All-Sectors.html

Grants – National: Innovation
Vouchers
Innovation Vouchers worth €5,000 are available to assist a company
or companies to explore a business opportunity or problem with a
registered knowledge provider (e.g. Institute of Technology).
 Open to all limited companies
 Not open to sole traders or companies with charitable status
Apply through open calls within the Enterprise Ireland Online
Application System.
https://www.enterprise-ireland.com/en/Funding-
Supports/Company/HPSU-Funding/Innovation-Voucher.html

Back to Work
Enterprise Allowance
The Back to Work Enterprise Allowance
(BTWEA) scheme encourages people
getting certain social welfare payments to
become self-employed. If you take part in
the Back to Work Enterprise Allowance
scheme you can keep a percentage of
your social welfare payment for up to 2
years.
Where to apply: If you live in an area
covered by a Local Development Company
(LDC) (pdf), you should apply to the
Enterprise Officer in your local ILDC.
Download pdf for more info.
 In addition to income support (your
weekly payment), you can also get
financial support with the costs of
setting up your business. Eligible items
for grant support – see next slide
http://www.revenue.ie/en/tax/it/reliefs/own-business-scheme/index.html

Category Annual limit, €
Minimum contribution
from applicant
Accountancy and related services including legal advice Up to €500 20%
Advertising and marketing aids Up to €500 20%
Business equipment Up to €1,000 20%
Business mentoring (this can be offered free or at a reduced
rate by Local Enterprise Officers (LEOs) or local development
companies
Up to €250 20%
Business registration costs and fees Up to €250 20%
Compliance, guidance and training Up to €250 20%
Job-specific tools and equipment Up to €1,000 20%
Office supplies and stationery Up to €250 20%
Personal protective clothing and equipment Up to €250 20%
Public liability insurance costs associated with setting up a
business - no other insurance is eligible
Up to €1,000 20%
Short-term training on book-keeping, regulation, rollout of
business plan, start-your-own-business and courses of training
related to the start-up
Up to €250 20%
Signage Up to €500 20%
Upgrading to premises where the premises is owned by the
applicant
Up to €1,000 20%
Website registration, related services and production Up to €500 20%
Combination of above in any 24-month period €2,500
Back to Work Enterprise Allowance

Start Your Own
Business Scheme
The Start Your Own Business scheme
provides for relief from Income Tax for long
term unemployed individuals who start a
new business.
The scheme provides an exemption from
Income Tax up to a maximum of €40,000
per annum for a period of two years to
individuals who set up a qualifying business;
having been unemployed for a period of at
least 12 months prior to starting the
business. It runs until 31 December 2018.

Start Your Own
Business Scheme
Are there any restrictions for my business under
this scheme?
 If you qualify for this relief, the restrictions
under this scheme are:
 The business must be set up between 25
October 2013 and 31 December 2018 by a
person that qualifies for the relief.
 It must be a new business and not a business
that is bought, inherited or otherwise
acquired.
 It must be unincorporated, that is, it must
not be registered as a company.

Grants – National: SURE - Startup
Refunds for Entrepreneurs
SURE (Startup Refunds for Entrepreneurs) is a tax
refund scheme.
If you are interested in starting your own company, you
may be entitled to an income tax refund of up to 41% of
the capital funding that you invest in the company
under SURE.
Depending on the size of your investment you may be
entitled to a refund of PAYE income tax that you paid
over the six years before the year in which you invest.
Professional advise should be sought in terms of if and
how this applies to restart entrepreneurs.

Grants – National: SURE - Startup
Refunds for Entrepreneurs
The general conditions for SURE are that you must:
 Establish a new company and engage in a qualifying
trading activity(s); and,
 Invest money in the new company by way of
purchasing new shares; and,
 Have had mainly PAYE income in the previous four
years (This would include a person currently in PAYE
type employment, an unemployed person, a person
recently made redundant or a retired person); and,
 Take up full-time employment in the new company
either as a director or an employee.
http://www.sure.gov.ie/

Seeking Investors in Ireland – Key
benefit to know!
Tax Relief for Business Investors - Employment and Investment Incentive
 The Revenue Employment Incentive and Investment Scheme allows individual investors to
obtain income tax relief on investments made, in each tax year, into Employment and
Investment Incentive (EII) Scheme certified qualifying companies.
 The Employment and Investment Incentive (EII) is a tax relief incentive scheme which
provides for tax relief of up to 40% in respect of investments made in certain corporate
trades.
 The EII scheme allows an individual investor to obtain income tax relief on investments for
shares in certain companies up to a maximum of €150,000 per annum in each tax year up
to 2020.
 There is no tax advantage for the company in receipt of the EII, but securing EII status may
enhance their ability to attract other external funding. Certification for EII is a matter for
the Revenue.
Find out more: https://www.enterprise-ireland.com/en/Invest-in-Emerging-Companies/Source-
of-Private-Capital/Revenue-Employment-Incentive-and-Investment-Scheme.pdf

An Incubator typically offers shared
office spaces, networking and
mentoring opportunities and perhaps
some seed capital to potential start ups.
Co-working is often a part of the
incubator experience, though some
offer private office spaces. Incubators
cater to new companies specifically,
nurturing the growth of a new business
as the name suggests.
2. Accelerators and Incubators
Meanwhile Accelerator programmes are geared towards existing businesses that
have the potential to grow. Different from incubators, accelerators offer
mentorship and typically also provide seed capital in exchange for a share of the
business.

ThinkBusiness.ie has mapped
Ireland’s startup ecosystem.
Mapping startups, networks,
incubators, accelerators, co-working
spaces, funding sources, tech
transfer offices, research centres,
multinationals and more; the online
interactive map is updated with
crowd-sourced data from Ireland’s
startup sector.
2. Accelerators, Incubators and
other Start up supports in Ireland
Exercise 2 (Ireland) – Review the Map, record the facilities and supports
which maybe useful to your new business
https://classic.mapme.com/startupireland

New Frontiers is Enterprise Ireland’s national entrepreneur development programme
for innovative, early-stage start-ups. The Programme is run by Institutes of Technology
and is a three-phased programme, based in 14 campus incubation centres across the
country. Each year, New Frontiers funds 150 companies.
You need to prove you can run a sustainable new business, trade internationally,
create employment.
Main Benefits of this Programme
• De-risk your business model
• €15,000 tax-free grant (in phase 2)
• No equity taken from your business
• Hot-desk and incubation facilities
• Introduction to government & private investment opportunities
http://www.newfrontiers.ie/
2. Accelerators and Incubators
in Ireland - New Frontiers
Programme

3) Microfinance
A source of financial services for entrepreneurs and small businesses
lacking access to banking and related services

FIND IT HARD TO RAISE
MATCH FUNDING ?
REJECTED BY THE BANK?
Targeted at start-up or growing microenterprises across all
industry sectors (includes retail).
Provide unsecured business loans of €2,000 to €25,000 for
commercially viable proposals . 4 loan themes…
1) Start up loan to help you get your business up and
running (€5,000 to €25,000)
2) Cash flow loan to support cash flow and the day to day
running o the business running (€5,000 to
€25,000).Must be established 18 months
3) Expansion loan to help you develop and expand your
business running (€5,000 to €25,000)
4) Small loan of up to €2,000 for Start-ups and existing
businesses with low funding requirements. Simpler
paperwork and quicker credit decision -72 hours
http://microfinanceireland.ie/

Based on business plan – everything comes back to the business plan!
• Term from 3 to 5 years
• Reduced Interest Rate 6.8% APR for LEO clients
• Flexibility on repayment terms
• First 3 months – Interest Only payments
• No fees/no hidden costs /fixed repayments
• Free Mentoring – up to 5 sessions for Start Up Loan
• Useful loan calculator - http://www.microfinanceireland.ie/apply-now/loan-
calculator/
Interesting
Microfinance Ireland are offering loans up to €5,000 at a discounted rate of 5%
to all Ireland’s Best Young Entrepreneur competition applicants.
.
Microfinance Ireland

4) Crowd Funding
Crowdfunding is the financing of a new project by raising many small
amounts of money from a large number of people.

Thousands of people and organisations across Europe have raised funding
through crowdfunding platforms. Business people and organisations use
crowdfunding not only to raise money online for a business idea or project but
simultaneously build up a community and improve visibility.
Some of the most powerful ways a crowdfunding campaign can help build more
start up momentum than other financing methods are:
 It’s more efficient than traditional fundraising.
 It generates traction, social proof, and validation.
 It’s an opportunity for crowdsourced brainstorming to refine your idea.
 It gains you early adopters and loyal advocates.
 It doubles as marketing and media exposure.
4. Crowd Funding

4. Crowd Funding: Is it right for your
Business?
 Crowdfunding suits certain types of businesses – usually startups or
early stage companies that are looking for relatively small amounts of
money.
 It has a higher success rate within certain sectors like the digital media
and certain types of consumer goods businesses e.g food.
 Thinking of crowd funding, found a platform you like? A good next step
is to find out if the crowdfunding platform you are considering has a
track record of success with similar businesses to yours.

4. Crowd Funding: Is it right for you?
 Crowdfunding suits particular types of
entrepreneurs, those with good marketing skills
and who are active on social media.
 Research shows that more men than women
pitch on crowdfunding sites
 If marketing isn’t your skillset, or if you’re
unfamiliar with social media, then crowdfunding
might be a challenge. A crowdfunding campaign
is not for a social media novice.

4. Crowd Funding:
Is it right for you?
 Excellent video pitches are essential
to successful crowdfunding
campaigns and persuading donors
to part with their cash. Pitching
your product or service to a mobile
camera (most likely) does not come
easy and requires preparation and
perseverance.
 Do your research, by viewing other
video pitches. Write a compelling
script that communicates the
selling points simply and
clearly. Deliver it with
passion. Reshoot it until it’s right.
Source:
https://www.thinkbusiness.ie/articles/crowdfu
nding-in-ireland-guide/

4. Crowd Funding -
Spotlight on Quirky
Nights Glamping, Sligo,
Ireland
 Sligo undertaker and 'Quirky Glamping'
entrepreneur David McGowan made
headlines across the world in May 2016
when he and a team of people
transported a decommissioned Boeing
767 plane from Shannon Airport to his
glamping site in Co Sligo.
 The story of his business and his trials and
tribulations to get his new “Quirky”
Transport themed Glamping park off the
ground, not only fired people's
imagination it also fired up a modest
Crowd Funding campaign which could be
succeeded by an even bigger campaign to
raise the €2.5 million needed to get his
glamping site up and running in 2018.
Source: https://fora.ie/davidmcgowan-glamping-sligo-enniscrone-3374712-May2017/

See campaign page: http://www.crowdfunder.co.uk/boeing-767-transport-themed-
glamping-village

Quirky Nights Glamping Crowd Funding Campaign - Range of
Rewards for Crowd Funders

David McGowan on Crowd Funding, Social
Media and proof that where there’s a will, there
a way.
Wanting to change his business profile from the ‘grim reaper’, (David is an
undertaker) he decided to start a new business. He undertook lots of research
to understand how he could grab people’s attention – right down to stopping
people in a restaurant or on the street to ask them what social media stories
made them stop.
“I am researching crowdfunding at the moment and know there are a lot of
people who will support us. We just need to work out what we can give in
return for supporting us.”
“Everyone said I couldn’t move that plane and it couldn’t be done. Well I’m
going to go out and find a way, there are other ways to do it without the
lending institutes.” – David Mc Gowan

Crowdfunding stands for a variety of different ‘fundraising’ models. It can take the
form of:
 Charity - when people donate to an individual, project or organisation while
receiving no financial or material return in exchange
 Pre-selling - when people donate towards the creation of a specific product,
 Peer-to-Peer lending - borrowing from a number of lenders via an online
platform, each lender lending a (small) amount in return for financial
compensation
 Equity lending - when people lend money to individuals or organisations in
exchange for company shares
Different platforms facilitate different fundraising models. Finding the right funding
model for your project is an important step for a successful campaign.
4. Crowd Funding: Models

 Advantages: Access to capital without equity stakes or rigid
bureaucracy.
 Disadvantages: A lot of projects never get off the ground which can be
frustrating given the amount of time you can spend setting up the
campaign. Back to the need for great marketing and social media
prowess.
Most crowdfunding platforms have an “All or nothing” model meaning that
if the funding goal of the campaign is not reached, all the contributions are
returned back to the backers.
4. Crowd Funding: Pros and Cons

Different platforms apply different charges depending on the model you chose.
• Platform Hosting fee: Some platforms, although not all, charge an initial cost
just for hosting your campaign. This cost varies from €0-300 and will be charged
to all projects, be that successfully fundraised or not. Ask platforms what fee
applies to them before starting the campaign.
• Success fee: The majority of crowdfunding platforms will take a percentage of
the total amount raised. The percentage varies from platform to platform and
ranges between 3% and 12% of total raised.
• Payment processing fees: Look out also for a service fee for every transaction
made. Usually this fee is on average 3%. For instance, for every €100
donation/investment, only €97 reaches the campaign.
Check each platform carefully to assess the real costs behind same.
4. Crowd Funding: Platform Costs

Let’s look at key crowd funding
platforms – Kickstarter
www.kickstarter.com
Kickstarter is an enormous global
community built around creativity
and creative projects.
Kickstarter helps creative creators
find the resources and support they
need to make their ideas a reality.
Important to check out the Creator
Handbook
https://www.kickstarter.com/help/h
andbook?ref=learn_faq

iCrowdFund:
An Irish crowdfunding company from the same people
that developed iDonate and iFundraise
Rate: 4% commission
Website: www.icrowdfund.ie
Linked Finance:
Another Irish owned crowdfunding site with favourable
commission rates.
Rate: 2.5% commission
Website: www.linkedfinance.com
Irish CROWD FUNDING
PLATFORMS

www.linkedfinance.com
Irish CROWD FUNDING
PLATFORMS: Linked Finance
Linked Finance is Ireland’s
largest lending platform. To date
our 15,000+ registered lenders
have bid over €30m to support
800+ great Irish businesses
across every county in Ireland.

Exercise 3: Download and Review Crucial Crowdfunding
Resources
CRUCIAL Crowdfunding is an ERASMUS+
supported project, designed to inform all
the different stakeholders who can
potentially benefit from this innovative
means of funding business ventures.
Project website:
http://crucialcrowdfunding.com
Crucial Crowd Funding Resources -
http://crucialcrowdfunding.com/downloa
ds/
Languages Available:

Angel Investors
Angel investors invest in early stage or start-up companies in exchange for an
equity ownership interest. Angel investing in start-ups has been accelerating.
High-profile success stories like Uber, WhatsApp, and Facebook have spurred
angel investors to make multiple bets with the hopes of getting outsized
returns.

More about Angel Investors
 On of the greatest sources of seed and start-up capital comes from
successful entrepreneurs and executives who have achieved wealth from
their gains in previous investments. These people are known as Angel
Investors aka Business Angels and “informal private investors”.
 In addition to capital, Angel Investors also contribute their know-how or
experience in company management and can offer valuable expertise
and guidance. Angels usually seek active participation in the company in
which they invest. Angel Investors are primarily motivated by return on
investment and Angel Investor involvement can often help secure access
to venture capital or classical bank loans.
Source: https://www.enterprise-ireland.com/en/Invest-in-Emerging-Companies/Source-of-Private-Capital/Business-Angels-BES,-
Angel-Networks-.html#sthash.iRxug024.dpuf

Angel Investors –
average investments
 The Irish national average initial
investment by Angels Investors ranges
between €50K and €250k individually, or
can form syndicates (partnerships with
other Business Angels) for investment
up to €500k and beyond.
 Business Angels generally invest in the
region where they live and in areas in
which they have greatest
expertise/knowledge. They may not
necessarily look to invest in new
technologies, although some specialise
in providing finance in such areas.

The ideal Business Angel will have
the following:
 a strong commercial track record;
 excellent business credentials;
 capacity to invest;
 ability to identify commercial
opportunity;
 time to invest in the creation of a
new company;
 vision to transform new
technologies into solid businesses;
 established links and relevant
industry contacts.

6 things Angel Investors care about
the most…
 The quality, passion, commitment, and integrity of the founders.
 The market opportunity being addressed and the potential for the
company to become very big.
 A clearly thought out business plan, and any early evidence of
obtaining traction toward the plan.
 Interesting technology or intellectual property.
 An appropriate valuation with reasonable terms.
 The viability of raising additional rounds of financing if progress is
made.
Source: https://www.forbes.com/sites/allbusiness/2015/02/05/20-things-all-entrepreneurs-should-know-about-angel-
investors/#4d8ca1b2c1aa

Finding an Angel Investor in Ireland
– some key contacts
In recent years, both Enterprise Ireland, IntertradeIreland and the Business Innovation
Centres (BICs) have been working together to build networks of Business Angels and
offer a matching services for companies and investors.
Enterprise Ireland’s Growth Capital department can facilitate access to Business Angels
who have an ongoing relationship with the agency. Enterprise Ireland, in conjunction
with InterTradeIreland, supports the Halo Business Angel Network. Halo facilitates access
to a network of registered Business Angels. This partnership is managed on a local level
by the following;
 DublinBIC – contact John Phelan
 WestBIC - contact Joe Greaney
 CorkBIC - contact Michael O’Connor
 South East Business Innovation Centre (SEBIC) – contact Michael Maddock
On a national level, and with a particular focus on syndicates, - contact John Phelan -
National Director of HBAN.

Spotlight on
Angel Investing
in Ireland- Halo
Business Angel
Network
(HBAN)
 In 2016, HBAN business angels, across the
island invested €13.5m into 50 companies.
 This direct angel investment leveraged a
further €20.58M of additional public &
private funds into these companies from
organisations such as Enterprise Ireland,
venture capital companies and founders.
 These numbers have risen steadily from
2011 when HBAN helped 29 companies
raise €12m of which €6m came from angel
investors.

OVERCOMING A ‘NO’
WHEN SEEKING
FUNDING
 If the recipe isn’t right, and you don’t get
the Grant, Micro Finance, Crowd Fund or
place on an Accelerator - be sure to use
these rejections as a learning
experience!
 Encountering a no can be disheartening.
 But don’t let it get the better of you.
Consider these steps to increase your
chances of being reconsidered, improve
your potential for obtaining financing in
the future and in general relieve the
stress of securing funding.

 Reflect on your approach – be honest with
yourself. Did you rush the application? Did
you really think you met the priorities or did
you not do yourself justice in writing about
your project?
 Ask for feedback- even if your rejection letter
specifies a reason for your rejection, asking
for verbal feedback will sometimes bring you
a fuller and more open response.
 Act Professionally. Even though
disheartened, keep your behaviour and
actions as professional as possible. If you
thank the possible supporter politely for
his/her time, and follow up in a few weeks
when you’ve gathered more information or
adjusted your business model, you may have
a much better chance of getting that funding.
WHEN SEEKING
FUNDING

 Find out what did get funded – funders
often publish lists of what they did fund.
What do you notice about the projects
that got funded?
Were the businesses at a different stage
to you?
Were you asking for much more (or less)
money than they received?
Were you applying for activities that this
funder hasn’t supported?
WHEN SEEKING
FUNDING

 Contemplate Your Options. There’s no
right or wrong way to pursue funding. If
one channel seems to be generating
more obstacles than opportunities for
progress, it might be time to change up
your strategy. Increasing your chances of
getting a yes could be a simple matter of
choosing the right channel (or group of
channels) to use to cultivate funding.
 Look At Your Business Model. Use the
rejection as a learning opportunity. Take
a look at your business model for any
major flaws or weaknesses. Fixing these
gaps will make your overall business idea
more attractive to other potential
investors, and could be enough to
change your initial rejecters’ minds.
WHEN SEEKING
FUNDING

 Learn and Improve your Pitch . Your
pitch needs to be strong in order to
capture the attention of your potential
investors. Over the course of a minute,
or a couple of sentences, you should be
able to explain your business concept
and exactly why it’s a valuable
investment opportunity for your
intended prospect. If you can’t do that,
your pitch needs refinement.
WHEN SEEKING
FUNDING

Module 6 access to finance

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Module 6 access to finance