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Happy days - there's lots of good news out there today if you own a small business

Ireland’s guarantee scheme for small companies is being extended, while crowd-sourcers LinkedFinance announced a new €250 million SME loan fund

THERE HAVE BEEN no fewer than three announcements today regarding small-scale enterprise in Ireland, and all are positive.

State guarantee extended

To start off, Junior Minister for Business and Employment Ged Nash has announced some changes to the state’s credit guarantee scheme for small and medium enterprises (SMEs).

The scheme will now allow businesses whose lending banks are leaving the Irish market to refinance with Irish banks using the guarantee, while the scheme has also been extended from three to seven years.

Low Wage Commissions Ged Nash Sam Boal / Photocall Ireland Sam Boal / Photocall Ireland / Photocall Ireland

The guarantee scheme was initially intended for new businesses only.  It allows a SME struggling to secure finance to underwrite a loan to a maximum of 75% using the state as guarantor.

“Clearly the job creation element of the Credit Guarantee Scheme is very welcome but overall it has not had the impact that we had hoped for,” said Nash.

 I believe that the changes we are introducing today will mean that many more SMEs will be able to avail of the scheme.

Reaction from the Irish Small and Medium Enterprises Association (ISME) has been positive, a marked contrast from their reticence regarding the launch of the state SME loan fund last week.

“These changes are very welcome,” said Mark Fielding, CEO of the association.

We are pleased that the relaunched scheme addresses the problem by making the guarantee available to businesses whose banks were exiting the country.
The onus now is on the banks to inform customers that they can apply for the guarantee, something they have not been doing adequately to date.

Crowd Funding

Next up, Linked Finance, Ireland’s largest crowd-funding site, announced a €250 million expansion of their lending fund by 2017, targeted specifically at small businesses struggling to secure finance from the established banks.

The crowd-sourcing company has big plans for the future.  The increased lending fund is expected to create 40,000 jobs in the next three years, all via SMEs.

“We’re letting companies know that there’s a real alternative to the banks who like to say ‘no’,” said Peter O’Mahony of Linked Finance

 A key differentiator for us rests in the fact that lenders and borrowers become partners in success rather than simply the parties to a transaction.

Again, the news was warmly received by Ireland’s small company representative bodies, with Patricia Callan of the Small Firms Association (SFA) describing the €250 million windfall as a ‘huge help’ towards strengthening Ireland’s economic recovery.

Exports

Meanwhile, AIB have announced an agreement with global credit insurance firm Euler Hermes designed to ease the red tape required of Irish SMEs when exporting goods via a product called Simplicity which offeres a minimum of 60% cover.

Credit insurance is a crucial for exporting companies as the insurance provides certainty that invoices will be paid.

The drawback here is obviously that a company needs to be a customer of AIB to take advantage of the product.  That being said, the ready availability of such insurance is no bad thing.

“Very few companies cover their exports with credit insurance as they believe it involves too much red tape,” said Euler chief executive Gerard van Kaathoven.

Simplicity should be easy to understand for SMEs. It will support and encourage them to develop their business overseas.

Good news all round, perhaps even cause for a celebration.

algore

Read: These are the startups Ireland’s newest business leaders have been coming up with

Read: Need to attract the brightest talent to your company? Here’s how…

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15 Comments
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    Mute Bobby Neary
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    Oct 1st 2019, 8:38 AM

    Wouldn’t be like the government if they didn’t lose money on something that should be easy to manage..

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    Mute dublindamo
    Favourite dublindamo
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    Oct 1st 2019, 9:06 AM

    @Bobby Neary: the govt have investment managers managing this. They will be restricted in what they can invest in so pretty much only govt bonds. With negative rate environment it is to expected that there will be a loss

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    Mute Tommy C
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    Oct 1st 2019, 9:09 AM

    @dublindamo: so we back apple. Keep the money safe, it loses 70 million a year, they win their case, we have to pay them back what we lost. Ireland

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    Mute dublindamo
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    Oct 1st 2019, 9:14 AM

    @Tommy C: no we only pay back what is left in the pot. The govt is not liable if the fund value decreases

    35
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    Mute Brendan Hughes
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    Oct 1st 2019, 9:26 AM

    @dublindamo: I’m sure our government will find a way to pay back what was lost. They hate to see business struggle.

    38
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    Mute joe
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    Oct 1st 2019, 10:19 AM

    @Bobby Neary: and the lad who doesn’t have a clue has over 100 likes!
    How would you expect that money to be managed?
    CFDs? Would you put it into futures? Maybe you’d look at shorting some companies? I am really interested to see how you would keep your money safe and generate a return in a negative interest environment? Im

    29
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    Mute Bobby Neary
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    Oct 1st 2019, 12:13 PM

    @joe: no need to be investing it.
    Just place it in a holding account.
    There is zero need to be taking risks with that amount of money..

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    Mute Dara O'Brien
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    Oct 1st 2019, 1:13 PM

    @Bobby Neary: That amount of money – in a savings account? With whom? What about concentration risk? Currency risk? Bankruptcy of the deposit taker? Also, you do realize that credit unions are calling deposits at €15k because the banks are charging them negative rates on their corporate deposits?

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    Mute joe
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    Oct 1st 2019, 1:28 PM

    @Bobby Neary: @Bobby Neary: that is in the holding account you fool! Negative interest rates! Cash and cash equivalents I.e in the bank!

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    Mute Simon Demery
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    Oct 1st 2019, 2:24 PM

    @Bobby Neary: if they stuck it in the hot press or under the mattress, they would have made more!!

    1
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    Mute dublindamo
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    Oct 1st 2019, 8:32 AM

    With interest rates at -0.5% this is actually doing well

    55
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    Mute Corkonian In Dublin
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    Oct 1st 2019, 11:50 AM

    @dublindamo: I agree except for the €2million in operating expenses

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    Mute dstaffx
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    Oct 1st 2019, 8:50 AM

    €2 million in operating expenses. Easy money if you can get it.

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    Mute Sequoia
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    Oct 1st 2019, 9:42 AM

    @dstaffx:

    This I don’t get. Systems are automated with buy/sell triggers at predetermined rates.

    There isn’t army minding gold here. The administrative costs are minimal.

    19
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    Mute Dara O'Brien
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    Oct 1st 2019, 10:07 AM

    @Sequoia: buying and selling bonds has a cost as do the various taxes, insurances, staff costs, reporting and software systems required to manage a bond fund of that size.

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    Mute gary mullen
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    Oct 1st 2019, 9:07 AM

    Sure we don’t have a housing crisis, sure we don’t have a homeless crisis, sure our prisons are not over crowded, sure we don’t have people waiting on trollies in A&E, sure we can wait longer for the childrens hospital to be built, sure we don’t need to put money into education in this country, sure we don’t really need the 14 billion do we? Not sure we don’t . Discracefull government running this country, voted in by the people of this country to keep the poor poor and make the rich even richer!!!!

    54
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    Mute dublindamo
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    Oct 1st 2019, 9:25 AM

    @gary mullen: people need to realise if Ireland didn’t appeal this we wouldn’t have had a 14bn windfall to spend. However there would have been significant macro consequences as a result

    29
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    Mute Cian
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    Oct 1st 2019, 9:41 AM

    @gary mullen: This needs to be repeated over and over again. That money isnt ours no matter who wins. If we win, it goes back to apple. If we lose it goes to the countries where it should have been paid. If we do lose, the repercussions could cost our economy significantly more than 14 Bn.

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    Mute Jake
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    Oct 1st 2019, 11:31 AM

    @Cian: what are the macro consequences – you think apple will leave cork ? where will they go? Why not try something different and see how it goes? See what Ireland stands to gain, no one knows. Tim Cook didn’t come out and say “Lads if that money is collected, we’ll leave Cork”

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    Mute Euro McPúnty
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    Oct 1st 2019, 8:39 AM

    Thats like saying €14,000 loses €70. Not exactly a hole in it.

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    Mute Gerard Heery
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    Oct 1st 2019, 8:49 AM

    @Euro McPúnty: it shouldn’t be losing any money whatsoever

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    Mute dublindamo
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    Oct 1st 2019, 9:01 AM

    @Gerard Heery: how do you figure that when interest rates are negative?

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    Mute Dara O'Brien
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    Oct 1st 2019, 9:08 AM

    @Gerard Heery: It has to lose money – deposit rates are negative.

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    Mute Gerard Heery
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    Oct 1st 2019, 9:35 AM

    @dublindamo: the money should have but in short term investments and managed it could years before a ruling is made on whether we get the money or not and the legal end that’s years in Ireland ,70 m is alot of money when you ain’t got it

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    Mute Dara O'Brien
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    Oct 1st 2019, 10:05 AM

    @Gerard Heery: it’s in fixed interest instruments which is as safe as you can get. Unfortunately, the rates on them are in negative territory as the ECB continues it’s QE programme to try and get inflation up to target.

    Yes, an equity based investment would be performing better at the moment but if the market were to drop by 10% overnight (as it did last December) then it would be down a significant amount more.

    The money has to be kept as safe as possible and, with the current climate, that’s where it is – just happens that safe havens have a negative return.

    18
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    Mute dublindamo
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    Oct 1st 2019, 11:55 AM

    @Dara O’Brien: stop talking sense. It won’t get you likes around here

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    Mute Gerard Heery
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    Oct 1st 2019, 1:27 PM

    @dublindamo: and yet Ireland pays a fortune in interest on its dedt Ireland definitely thrown under a bus

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    Mute dublindamo
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    Oct 1st 2019, 6:29 PM

    @Gerard Heery: the ntma recently issued a 10 year bond at negative rates.

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    Mute Jack McInerney
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    Oct 2nd 2019, 2:42 AM

    @Dara O’Brien: They should have stayed clear from Europe in the first place. US Treasury notes and Municipal bonds are still attractive and positive should have kept it in them.

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    Mute dublindamo
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    Oct 2nd 2019, 7:07 AM

    @Jack McInerney: and then have additional FX risk from the fluctuations of the Dollar v Euro

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    Mute DarraghF
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    Oct 1st 2019, 9:11 AM

    History would suggest that If they let our Bankers ‘look after it’, under central bank and government guidance – all 70 billion will be lost to both Apple and the country with the tax payer footing the bill….

    24
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    Mute Jodi
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    Oct 1st 2019, 11:39 AM

    Ah, The Journal Comments – filled with people who know little or nothing about financial markets, but insist on commenting as if they do…

    12
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    Mute Johnny Rielly
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    Oct 1st 2019, 11:45 AM

    @Jodi: thats right.. because financial people are sooo clever….. i seem to remember the big bang from the celtic tiger… that didnt make them look to clever

    12
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    Mute Mike McGann
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    Oct 1st 2019, 9:36 AM

    Only Ireland could manage this

    9
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    Mute Corkonian In Dublin
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    Oct 1st 2019, 11:50 AM

    2 million in operating expenses???? How???

    7
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    Mute MickN
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    Oct 1st 2019, 9:58 AM

    Ill mind it for free…

    6
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    Mute Johnny Rielly
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    Oct 1st 2019, 11:43 AM

    Just think what benefit that money would be to the country… more Gardai, improved rural broadband…better pay for frontline staff. etc etc …. but no the Paddies dont want it… we think we are so frikking clever

    5
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    Mute Paddy J
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    Oct 1st 2019, 12:54 PM

    @Johnny Rielly: Unfortunately that is never going to happen as the money isn’t ours in the first place. It is either Apple’s or it belongs to other countries where the revenues were earned. If Apple loses the case there will be a big queue of counties with the paw out looking for their cut.

    8
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    Mute Damien Hawe
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    Oct 1st 2019, 1:23 PM

    @Johnny Rielly: Do you honestly believe that we would hang onto that money? Because I can pretty much guarantee you that as soon as we keep it the other countries would come looking for their slice of it.

    2
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    Mute Simon Demery
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    Oct 1st 2019, 5:03 PM

    In the words of Father Ted.

    “THAT MONEY WAS JUST RESTING IN MY ACCOUNT BEFORE I MOVED IT ON”

    2
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    Mute Den Sullivan
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    Oct 1st 2019, 12:02 PM

    If it costs money just to hold money in goverment bonds at negative rates .this never happend in human history . ! Upsidedown world either something is very wroung or central banks have found means turn base metals into gold

    2
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    Mute dublindamo
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    Oct 1st 2019, 7:42 PM

    @Den Sullivan: it has happened in economies like Japan in the past. The NTMA recently issued a bond with negative yield

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    Mute Damon16
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    Oct 1st 2019, 7:34 PM

    Corporations don’t pay taxes, their customers do.

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    Mute Lukevic101
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    Oct 2nd 2019, 12:03 AM

    Could they not just print a one time 14 billion euro note? And keep it someplace safe, like under a mattress or a jam jar?

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    Mute Jack McInerney
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    Oct 2nd 2019, 2:19 AM

    @Lukevic101: Haha, Doesn’t work that way I’m afraid.

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    Mute Lukevic101
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    Oct 2nd 2019, 10:11 AM

    @Jack McInerney: sorry Jack was a poor attempt at humour. Like in the Simpsons with the Trillion Dollar Bill.

    1
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