FINANCIAL SUPPORT AVAILABLE TO BUSINESS (AT 8th February 2011)

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1 FINANCIAL SUPPORT AVAILABLE TO BUSINESS (AT 8th February 2011) Enterprise Finance Guarantee BIS 14 January 2009 Guarantees to lenders to enable them to provide debt facilities which would otherwise be declined due to the inadequacy of the borrower s security. Government provides a guarantee on qualifying facilities by lenders to viable SMEs which would not otherwise be due to a lack of security. Can be used to facilitate new loans, overdrafts and invoice finance facilities or to enable the restructuring of existing facilities. How is By making conventional lending products to the SME which would otherwise have been declined. Government s financial support is to the lender in the event of default by the SME. In addition to regular principal and interest payments to the lender, and any arrangement fee which it may charge, a premium is payable to BIS, equivalent to 2% per annum on the outstanding loan balance collected and assessed quarterly in advance. Available to SMEs with an annual turnover of up to 25m. Coal, financing of individual export orders. Some restrictions on agriculture, fisheries and transport. Subject to demand, EFG will be at least until 31 March should contact one of the participating lenders. These include all the main banks and a number of smaller specialist institutions, not all of which operate in Northern Ireland. A full list may be found on the BIS website. Working Capital BIS 14 January 2009 Working Capital Guarantees to banks Government provides Bank Guarantees ing 50% of risk on new and existing working capital portfolios up to 20Bn total scheme There will be no further guarantees offered under this scheme risk shared between Government and Banks on short term working capital loans for Banks pay a premium to BIS, to be agreed when the portfolio of loans is offered. This premium may be passed on to that are part of the agreed portfolio. This is not a business facing scheme - support is for the Bank's portfolio. within the portfolio must have annual turnover of less than 500m - SMEs & non SMEs No Sector exceptions have been identified by BIS. 1 March 2009 to 31 March No guarantees will extend beyond this period Participating lenders are: HSBC, Barclays, Lloyds TSB, RBS NatWest 1

2 Accelerated Fund (ASF) Invest NI 09 December 2008 Grant support for projects against eligible vouched and approved expenditure Projects supported must seek to address issues arising from current economic conditions and should reflect Invest NI's intervention principles. How is Grant support up to 50K at a grant rate of 50% is. expenditure: Salary costs of new and existing staff; Consultancy costs; Salary costs of trainers; External training costs; Travel and subsistence. ed Client must have match funding equal to 50% of eligible project cost Established Invest NI Clients - SMEs and non SMEs. Agriculture; Fishery and Aquaculture; Coal. Capital expenditure and MIS led projects are not eligible for ASF support, nor can ASF 'top up' support under existing schemes September 2008 until further notice. ASF offers have a maximum period of 15 months in which a Client may claim support. Assistance should focus on a period of activity of up to 12 months. Invest NI Clients should complete the ASF application form. Applications reviewed by Client Executives to ensure are complete & suitable for ASF support. Applicants are advised within 5 working days regarding eligibility, rejection or returned for completion. NISPO (Northern Ireland Spin Outs) Invest NI April Funds are managed by E- Synergy on Invest NI s behalf. Proof of Concept (PoC) Grants, Seed and early stage equity PoC grant enables small to establish the commercial potential of a concept resulting from in-house research and ideas. Seed and early stage equity s post PoC early stage development costs. PoC grants can by Mini Grant up to 10k or Standard Grant up to 40k. Equity of up to 250k may be to a business in return for shares in the business. ed NI must have match funding as follows: PoC grants salary costs which are non-eligible. Equity 30% of deal costs must be by private sector funders in form of equity. PoC individuals, startups, microenterprises, SMEs. Equity companies with post PoC compelling, scalable high growth business propositions. There are separate schemes for university and non-university spin outs, State Aid excluded sectors of shipbuilding, coal and steel. April 2009 to March should contact E-Synergy. Detailed information can be found at 2

3 European Investment Bank (EIB) Loan Fund EU / EIB 16 December 2008 Term Bank loans to SMEs, funded by EIB EU wide, project based, lending to SMEs of EUR 15bn in 2009 & EUR 15bn in Credit lines granted to intermediary banks & financing institutions in the country in which the project is based. These institutions pass on the EIB funds to SME promoters. EIB loans for SMEs can support all types of investment or expenditure necessary to grow a small business: Tangible (e.g. purchase of plant); Intangible (e.g. R&D financing); Working Capital increase for SME expansion. How is Through EIB Intermediated loans, designed to permit the financing of projects with a total investment cost of less than EUR 25 million. An EIB credit line may finance a maximum of 50% of the total cost of any project. A new product line will also be developed allowing risk sharing with banks. 4 billion of funds has been made to the UK out of a 30 billion EU-wide fund. and Bank of Ireland have each secured 100m loan facilities. Approximately 350m has been disbursed throughout the UK to date The conditions of financing (interest rate, grace period, loan period etc) are determined by the respective EIB partner bank. Maturities typically range between 5 and 12 years. Lending decisions remain with the financial intermediaries. SMEs only Arms; Gambling; Tobacco, Animal Testing; Environmental impact that cannot be mitigated or offset; Morally or ethically controversial activities(e.g. human cloning); Pure Property Development; Purely Financial Transactions (e.g. Company takeovers) 1 January 2009 until further notice should contact participating Banks or leasing companies. Barclays, Close Bros, HBOS and RBS have already accessed EIB funds. NI participant: 3

4 Business Payment Service (HMRC) HMRC. Announced in 2008 Pre-Budget Report. Further expansion on 22 April Offers help to facing temporary financial difficulties to spread tax payments over a timetable they can afford. Corporation tax, VAT and payroll taxes including National Insurance Contributions How is HMRC staff will review individual business circumstances and discuss temporary options tailored to the needs of the e.g. making payments over a longer period of time. HMRC will not charge additional late payment surcharges on payments included in the arrangement, although interest will continue to be payable on those taxes where it applies. All None No end date set HMRC Payment Line Service has been expanded to allow expecting to make losses to offset those against tax bills due on profits for the previous year which they are unable to pay. 4

5 Enterprise Northern Ireland Loan Fund Enterprise Northern Ireland / 2002 Personal loans for business purposes Fixed interest rates No arrangement fees No excessive early redemption fees Helping to start and grow through: Securing business premises and payment towards refurbishment costs Purchase of equipment, tools, stock and raw materials Payment towards marketing, advertising and promotion costs Payment towards other items and activities essential for business start-up or expansion LOANS CANNOT BE USED TO RE-PAY OR CONSOLIDATE EXISTING BUSINESS OR PERSONAL DEBT How is The Enterprise Northern Ireland Loan Fund provides loans to individuals both looking to start, or already running, their own business, who can demonstrate a viable business proposal, but who are struggling to access mainstream sources of finance for all or part of their funding requirements. Start-up Business Loans of between 1,000 to 10,000 Repayable over 1 year to 3 years Fixed interest rate of 6% (APR 11.4% to 11.7%) Existing ( trading for at least 2 years) Loans of between 1,000 to 25,000 Repayable over 1 year to 5 years Fixed interest rate of 4% (APR 7.6% to 7.8%) All applicants must: Be resident in the UK, over 18 years of age and be responsible for running the business Be able to demonstrate a commercially viable business proposal to support the loan Not currently be in an IVA, subject to a CCJ or bankrupt All must: Be based in Northern Ireland Be legal, moral, non-discriminatory and not undertake any activity which may offend public taste Funding will not be given to involved with religion, politics, pornography, gambling or money lending Applications for the purchase of vehicles will not be considered, except in the case of commercial vehicles deemed to be essential to the business in such cases we prefer to limit our funding to a deposit for a hire-purchase agreement along with the first few months repayments No end date set Telephone: (028) loanfund@ enterpriseni.com 5

6 Regional Fund for SMEs 1 by / date NOTE: 05 February 2009 This is not a Government In addition to providing debt finance, the new funds will offer access to other options to help manage their capital and cashflow 250 M locally administered fund to support SMEs across Northern Ireland in The fund forms part of a 3 billion SME package from RBS. 2010: 300m locally administered fund to support SMEs across Northern Ireland in The fund forms part of the larger SME package from RBS. How is Unsecured small business loans up to 25k. Business loans which allow customers to postpone capital repayments. Enhanced invoice and inventory finance to enable customers to better manage their working capital. Releasing cash through financing assets already owned by the business. Short term trade finance. Each case is taken on an individual basis and could be subject to security and arrangement fee. N Ireland SME customers of with annual turnover of less than 25M - both existing and new customers. 's normal criteria for business lending applies. No Sector exceptions have been specified by Ulster bank from information so far. 300m fund from start March 2010 until end Feb 2011 Interested should contact directly through any NI Branch or Business Centre One of Ulster Banks new Business Commitments states that they have made a public pledge to support small and medium enterprises with the tools they need to grow. To this end they provide/ assist with; Small business 1 Alternative funding schemes are from other banks 6

7 loans (lower rates for loans between 1k- 25k) Trading business loans (loans > 25k) EFG loans EIB assisted loans Invoice Finance (releases cash otherwise held up in debtors) Lombard Asset Finance Capital Release Short term Trade Finance (optimise working capital and protect cash) Start up and Early stage switcher proposition (host of subsided bank products) 7