(16 Dec 2022)
The Network of Irish County and City Enterprise Boards, in a submission to the Department of Enterprise Trade and
Employment, has proposed a financial stimulus package for supporting micro enterprises (those employing less than ten people) that would generate 15,000 new jobs over the next five years.
In addition, the CEB Network says that the package would assist 3,000 existing micro enterprises throughout the country and support the creation of 6,000 new start-ups, including 1,000 new enterprises from women and recent immigrants. It would also provide training for 49,000 people, accelerate the growth of high potential start-ups and increase exports.
On behalf of the Network, Mr. Michael Johnson CEO of Dun Laoghaire Rathdown CEB said: “Now more than ever before, the role of small business will be a key factor in reversing the downturn and we need to provide the right support to the right enterprises at the right time.
“The focus of our proposal is on innovation and the growth of high quality businesses in the knowledge sectors to provide a platform for success based on flexible investment packages.”
The CEB Network submission says that start-up capital and development capital are essential needs of entrepreneurs and micro businesses and there is a lack of such capital in Ireland and comments:
“This shortfall in the supply of funds to micro enterprises has become even more acute in the last three to five months as the credit crunch has impacted and bankers are calling in firms who exceed their agreed limits by tiny amounts with instructions to get within limits immediately or, in many cases, withdrawing the facilities altogether.”
The City and County Enterprise Boards conducted an online Credit Crunch Survey of 990 clients and contacts during November/December and the key findings were:
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54% said that their business activity was being curtailed at present due to bank credit issues
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52% said that the banking situation was having a serious or very serious effect on their business
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31% said that their business was at risk of closure
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20% had already let staff go and a further
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39% intend to reduce staff particularly in the next 6 months
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74% said debtor days had increased putting pressure on cashflow
The stimulus package put forward by the City and County Enterprise Boards is a response to the growing crisis. It proposes a new suite of financial incentives:
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Priming Grants of up to 50% of the start-up costs up to a maximum of €160,000.
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Business Expansion/Development Grants of 50% of eligible costs up to a maximum of €160,000.
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Feasibility/Innovation grants of up to 60% of eligible costs up to a maximum of €20,000.
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Micro Credit with loans of up to €50,000, repayablein line with the financial projections of the business. These would take a more risk-orientated approach than commercial loans and would potentially leverage bank facilities.
Mr. Johnson said: “With over 30% of the businesses surveyed indicating that closure was a real possibility, it is vital that this package of supports is approved and implemented urgently. The proposed new facilities, such as a loan fund, together with targeted advice and mentoring, would make a big difference to the survival chances of micro enterprises.”
The new financial supports are intended to enhance the existing range of financial instruments available from the CEBs and have been designed specifically to address the working capital needs of small business.They would be matched and packaged with soft supports customised to each business such as advice, mentoring, management development and training and are designed to bring an integrated bundle of supports to businesses.
Download Credit Crunch Survey
CreditCrunchSurveyReport
(PDF, 91 Kb)