THERE is a range of special financial packages available to small business clients, according to the 1996 Small Firms Association guide to planning and finance which has just been published. It specifically notes the Access to Finance Scheme for small businesses.
The guide says "the loyalty of small business clients is not nearly as strong nowadays, increased competition has led to customers looking for an improved service from their bank". It says the `banks' response has been to form identifiable `small business units' which can give a complete package of services to its small business clients".
All the main banks have special packages relevant to small business:
. ACC Bank operates a business loan fund for capital spending programmes. Loans are offered for up to 20 years.
. Allied Irish Banks has five schemes, including the European Investment Bank global loan, available to companies which are engaged in industry or tourism; a Hotel Federation fund and a scheme open to any business in a designated seaside resort; and an enterprise development fund which is available to any business in a start-up phase.
. Bank of Ireland operates the business property loan fund, which is available to businesses operating in the manufacturing retail and tourism sectors. Funds in this scheme may be used for the renovation or extension of existing business premises.
The fund is also available for the purchase of new business premises. The bank's enterprise support fund helps start up businesses; the services include import substitution and internationally traded services. Interest is charged at the bank's normal double A rate.
. ICC Bank operates the flexiloan scheme, open to all sectors and offering loans for up to 29 years. This scheme has an option to change a flexiloan (at variable interest rates) to a fixed rate loan scheme with the fixed rate repayment schedule based on the variable rate at the time of drawdown.
. National Irish Bank's schemes include the small business development package and the new enterprise loan fund for small business. The first charges no arrangement fees and offers loans of one to seven years. The second is designed for start up businesses and those with expansion plans with potential for employment.
. Ulster Bank offers three separate services to its small business clients. The enterprise loan scheme is open to start up businesses and offers loans of up to 10 years. The business development loan operates for expansions and start ups and has fixed interest rates. The SME loan fund offers a 50 per cent reduction in bank charges for the first three years.
The guide includes advice on how to prepare a successful submission to the bank for loan capital. It emphasises that any submission should include sufficient detail on the company's management team "to instil bankers' confidence" in the client.
The authors of the guide say they believe that if small firm owners followed the guide's business plan their "goal of convincing the banker will come a lot closer"
The guide devotes substantial space to the Border counties interest subsidy scheme. The scheme is funded by the European Commission and the Irish and British governments and is available in Northern Ireland and the Border counties of Donegal, Sligo, Leitrim, Cavan, Monaghan and Louth.
Qualifying loans will generally be between 25 per cent and 50 per cent of the total project cost.
The recent Access to Finance Scheme for Small Businesses is not covered in the guide as the scheme is currently oversubscribed.
The guide is available from the Small Firms Association, Confederation House, 84/86 Lr Baggot Street, Dublin 2, Tel: (01) 6601011.
