A £10 million fund has been established to nurture small companies with development potential. Designed to be highly accessible and minimise "red tape", the fund is aimed at companies short on capital, but with a good prospect of viability within a couple of years.
The joint initiative between Bank of Ireland Business Banking and Forbairt will particularly appeal to start-up technology companies. The Enterprise 2000 Fund will provide equity and loan finance to companies which are currently unable to secure existing venture capital finance or normal bank finance.
According to Mr Barry McNamara, head of enterprise support at Bank of Ireland: "The qualification criteria for this fund will be more relaxed than standard venture capital or banking requirements. The fund will cover a higher level of risk than normal, and much of the funding will be deployed to research and development." The full £10 million will be invested within three years and up to 50 ventures will be funded each year.
Divided equally between Bank of Ireland and Forbairt, the fund will provide access to financial packages of equity and loans and will be flexible to meet the requirements of individual cases. Amounts available per project will range from £25,000 to £100,000 in return for a minority shareholding in the business. According to Bank of Ireland and Forbairt, additional funding may be provided once initial agreed business objectives are achieved.
Speaking at the launch of the fund, the Tanaiste and Minister for Enterprise, Trade and Employment, Ms Harney said: "The availability of seed capital for start-up and early stage companies with growth potential has remained in short supply. The Enterprise 2000 Fund, with its specific remit of investing in early-stage companies with potential across all enterprise sectors, is an innovative and valuable contribution to our financial infrastructure."
Loans will be provided on a long-term basis between five and 10 years and will not require personal guarantees from directors.
To qualify for funding, applicants need to be limited companies, which can demonstrate a clear potential for competitive advantage and viability. The fund is aimed at most industry sectors including technology, software, manufacturing, services, food and agri-business. Property development, financial services and some retailing projects will be excluded.
Welcoming the new fund, Mr Michael Connolly, general manager of Bank of Ireland Business Banking said: "Through the Enterprise 2000 Fund, we are providing £10 million to a far riskier market which has not been properly serviced up to now. We are willing to take this risk to help new entrepreneurs with innovative ideas."
Application forms are available from Bank of Ireland, Forbairt, SFADCO and County Enterprise Board offices or directly from the fund's offices at 43 Pearse Street, Dublin 2. Tel: (01) 677 5570; email: capital@enterprise2000fund.ie
