Whether you are thinking of starting a business, looking to expand your existing business or simply looking to create cashflow, funding can be a huge consideration for all parties concerned. Some people may be fortunate enough to get a cash injection from family members or friends, but more often than not an independent third-party funder will be required.

Banks may not always be the first port of call for people looking for funding. This may be due to a poor credit history or in a start-up scenario it might simply be the lack of history but there are other options and avenues that may be worth exploring.

At the moment there are many alternative sources of finance that businesses can access. A small business can look to seek supports and grants from Enterprise Ireland or Local Enterprise Offices. Lending is available through sources such as Microfinance Ireland or Peer to Peer lending. If you wish to simply ease your working capital restraints or increase liquidity in the business, Invoice discounting may be an avenue you could explore. Finally, for businesses in the very early stages there are several allowances and schemes that can be sought through the Revenue Commissioners or the Department of Social Welfare.

Below is a quick overview of the options that are on the market, depending on your needs and circumstances hopefully there is one to suit you.

Enterprise Ireland

Enterprise Ireland have several initiatives that are aimed at people who are just starting the process of setting up a business (e.g. the New Frontiers Programme and the Competitive Feasibility Fund), but it also supports companies at the seed stage of investment through the Competitive Start Fund and the High Potential Startup Unit (HPSU).

Local Enterprise Offices (LEO)

Your local enterprise office will have a variety of financial supports available, everything from feasibility grants to helping you research market demand and sustainability of your potential product or service (up to €20,000), through to priming grants and business expansion grants. The only downside with the LEO grants is that the grants only cover approximately 50% of the costs which can be a challenge for many early-stage businesses.

Microfinance Ireland

Microfinance Ireland is a not-for-profit lender established by the government to provide additional lending to startups and SMEs with loans ranging from €2,000 up to €25,000 that can be used for working capital, marketing costs and to fund the set-up of business, the purchase of stock, equipment, machinery and business vehicles.

Crowd Funding and Peer to Peer Lending

Peer to Peer Lending aims to connect those who wish to invest and those who are seeking finance. Linked Finance is Irelands largest peer to peer lending agent. It is aimed at businesses who have trouble getting finance from their banks and at people who have money to invest and are looking for higher returns than those given by the banks. Linked Finance now facilitates ordinary people with savings, to come on board with them and lend to trustworthy businesses that wish to borrow money.

Invoice Discounting

This is a form of finance that provides ongoing working capital, where the finance company prepays a portion of the business’s trade debtors. Cashflow is generated from actual rather than future sales. This type of finance is particularly suited to businesses that may have large debtor balances. The business retains full control of the sales ledger, and the relationship with the lender stays confidential. As the cash is collected from customers, the lender is repaid.

Tax Reliefs and Allowances

Three-year corporate tax exemption

Under this scheme, you can [technically] earn €120,000 tax-free for the first three years. The scheme gives relief from corporation tax on your trading income, and certain other gains new companies may acquire, for the first three years. The relief available depends on the amount of Employer PRSI paid by the company.

Startup Refunds for Entrepreneurs (SURE)

This is for people who start a company and need cash to fund its growth. You may claim back the income tax paid in previous years if you are an employee, an unemployed person or a person recently made redundant and are starting a business.  

Short Term Enterprise Allowance

The Short-Term Enterprise Allowance (STEA) gives support to people who have lost their job and want to start their own business. It’s paid instead of Jobseeker’s Benefit for a maximum of nine months. It ends when the entitlement to Jobseeker’s Benefit ends (that is at either nine or six months).

Back to Work Enterprise Allowance

If you have been out of work and in receipt of social welfare for more than twelve months, under the Back to Work Enterprise Allowance you can keep your social welfare payment for two years if you set up a business (year 1: 100% – year 2; 75%). 

The Employment and Investment Incentive Scheme

This scheme replaced the business expansion scheme and allows individual investors get tax relief of up to 40% on investment they make in other qualifying companies of up to €150,000 per tax year on the basis that the shares must be held for a minimum of four years.

Start Your Own Business scheme 

The Start Your Own Business scheme provides relief from income tax for long-term unemployed people who start a new business.