Interest rate cut for small business

New mentoring assistance available for micro-enterprises through Local Enterprise Offices

The Minister for Jobs, Enterprise and Innovation Mary Mitchell-O’Connor T.D., today (17th June) welcomed the news that Microfinance Ireland (or MFI), the not-for-profit Government Agency providing funded finance to micro-enterprises, is offering micro-businesses the opportunity to avail of a cut in its interest rates (down by 1%) from 1st July 2016.

Micro-enterprises can apply for loans of between €2,000 and €25,000 directly to MFI, or indirectly through their Local Enterprise Office. From 1st July, applicants direct to MFI can avail of a standard rate of 7.8% APR, down from 8.8%. In addition, applicants to MFI via their Local Enterprise Office (or LEO) can borrow at an even lower rate of 6.8% APR, a highly competitive interest rate for those small businesses who are currently finding it difficult to access finance from traditional sources.

A further positive development of MFI’s already strong relationships with the LEOs around the country is the launch of a support program through the LEO network under which expert mentoring assistance will be provided to approved MFI loan applicants.

Commenting on the announcement, Minister Mitchell O’Connor said “I welcome this announcement from Microfinance Ireland. It is very much in line with the thrust of the Government’s Action Plan for Jobs, to make loans to micro-enterprises right across the country more affordable. I am very much aware that micro-enterprises are at the heart of rural Ireland and I want to create an environment for them to grow and develop right across the country. The introduction of valuable business supports available through the local enterprise offices to aid small enterprises will, I am sure, increase their chances of commercial success, result in the creation and maintenance of jobs, and greatly help in improving the economy overall”. Only a strong economy supporting people at work can pay for the services needed to create a fair society.

The Minister of State for Employment and Small Business Pat Breen T.D., also commented on these developments: As minister for employment and small business I want to ensure that we create a supportive environment for enterprise and employment to thrive. As part of that, I welcome this positive step by Microfinance Ireland to further support our commitment to the SME sector in all areas of the country and this news should encourage more entrepreneurs and small businesses to take the first step in starting out, or in growing their existing business”

Both Ministers also congratulated Garrett Stokes on his appointment as CEO of Microfinance Ireland in recent weeks, and indicated that they look forward to working with him to drive the MFI agenda forward, and to deliver sustainable jobs in this challenging sector.

About Microfinance Ireland (MFI) www.microfinanceireland.ie:

Microfinance Ireland as a not-for-profit lender, was established to deliver the Government’s Microenterprise Loan Fund. Since being set up in late 2012, it has approved €14.1m in loans to 944 businesses supporting 2,148 jobs, across all sectors of business and in every county across the country

Microfinance Ireland provide an alternative source of funding to micro-enterprises* – both new and existing, who may be having difficulties in accessing finance from commercial providers and ultimately supports the creation and/or retention of jobs.

In 2015 approximately two-thirds of approved loans went to support Start-Up companies, with the remainder going to existing small businesses that were looking to expand and develop.

* Micro-enterprises are defined as any business with less than 10 employees and annual turnover of less than €2M.