The Microenterprise Loan Fund Act 2012 and the supporting Scheme (the "Microfinance Act") established Microfinance Ireland to provide newly established or growing microenterprises with access to limited funding where they have been unable to access bank credit or sufficient bank credit to start or develop their business. Microfinance Ireland shall have access of up to €15 million in the form of grants from the Minister for Jobs, Enterprise and Innovation and it may also borrow up to €25 million at any one time from the Social Finance Foundation to lend to microenterprises. A qualifying 'microenterprise' is a business with fewer than 10 employees and must have a turnover (or estimated turnover for a start-up) of under €2 million or have a balance sheet of less than €2 million.
In addition to satisfying the criteria to qualify as a microenterprise, an applicant must be able to provide (i) confirmation that they have been refused bank finance or sufficient bank finance, (ii) a business plan, (iii) confirmation that the applicant is based in Ireland, and (iv) a Tax Clearance Certificate. Any loan provided to a microenterprise shall not exceed €25,000 and may be used by the microenterprise for business start-up costs, expansion and working-capital. In general, Microfinance Ireland shall not request security such as third party guarantees or legal charges as a condition of advancing funds.
In certain circumstances, it appears that a microenterprise may apply for a loan from Microfinance Ireland to 'top up' bank credit.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
