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Bad Investment Makes no Cents.

We have spoken at length in the past about various forms of funding and investment in business and the importance of the availability of funding for all businesses in particular small and medium enterprises who may rely on outside funding. Something which is rarely touched upon is the importance of choosing the right investor for your business, and one which can go the distance alongside your company. Failure to choose a sustainable investor can cause serious problems for both your business and the investor.

This issue is especially important this week as it was revealed that many Irish investment firms have been found to have failed to meet the required standard of investors by the Central Bank of Ireland. The bank recently conducted a review of suitability requirements for investment firms and found many companies to be sorely lacking, which is not encouraging news for business owners wishing to secure funding. Michael Hodson, Director of Asset Management has been quoted as saying of the findings:

“The review highlighted that firms need to improve the quality of information collected and how this information is utilised in the suitability process. With the introduction of higher suitability standards, the quality of the information collected is all the more significant.  Boards are reminded that they are responsible for implementing an appropriate governance framework that meets the suitability regulatory requirements and embeds a client-centric culture across the firm.  Investor protection is at the core of the Central Bank’s mandate.” 

The review found that many firms were unable to demonstrate that the required suitability policies and procedures were implicated whilst also pointing out that many application forms were incomplete. Some firms were also found to be reliant on self-assessment alone and had little to no tools in place for assessing suitability for investment, relying heavily on technology. In perhaps the most worrying finding, many companies were found to have nothing in place for dealing with potentially vulnerable clients and companies.

Thankfully, the Central Bank assure companies that in any areas that the findings may be damaging to consumers formal supervisory requirements have been implemented which should reduce risk greatly for prospective clients.

As always we are available for any advice or guidance you may require on business or finance matters.

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DCA PARTNERSDECLAN DOLAN & EAMONN GARVEY

Kick Bills before Buckets

With Irish people now beginning to get a foothold on the property ladder later in life, we are also beginning to start families slightly later and as such, thoughts often turn to what provisions can be made for your family in the unfortunate event of your death. Whether sudden or prolonged the death of a loved one has devastating emotional consequences so it is advisable to think ahead and do all that you can to avoid there also being devastating financial consequences. It’s a fairly morbid thought to begin the year with but we are big believers in thinking ahead and there are dangers to be found in ignoring the inevitable.

 

It is advisable to think ahead and to have your affairs in order in so far as possible at all times and at the very least to know what would happen to your existing finances or your current payments in the event of your passing. We might all have hated those conversations our parents would begin about the event of their death, but they are wise to open these discourses to avoid burying our heads in the sand. Having your affairs in order could prevent causing additional pain to your loved ones at an already emotionally painful time.

 

Something which is often overlooked are bank accounts. Whilst many of your debts will pass away with you, bank accounts are not among these. Your bank account will continue to issue payments etc. as usual until informed of the death, so it is advisable to ensure that someone is aware of all of your accounts as they may then be liable to take over a debt they were unaware of, or the account could be left running into difficulty. By contrast, the advantage of a joint account means that all funds can pass directly to the named survivor on the account.

 

Credit Union accounts are another issue which surviving loved ones are often unaware of as your loved ones might be able to avail of a pay out from your credit union savings following your death due to a little known life insurance scheme which accompanies your credit union account as well as being able to avail of any savings you have made. Credit Union loans differ from most as they will typically be cleared upon the death of the account holder.

 

The most crucial manner in which people fail to keep their loved ones up to date on their financial matters is their debts and loans. Many debts or unpaid loans will simply pass to your estate and interest will continue to accumulate on these until paid in full, causing a further headache for your family in what is already a difficult time, debts can even be recovered from existing accounts leaving loved ones without access to these previously available funds, whilst your estate can be liable for any remaining balance.

Mortgages can be problematic, some banks allow a moratorium following a borrower’s death although interest may continue to accumulate so it is wise to check your options in advance so all parties are aware of the situation, and to ensure your mortgage protection is full and up to date.

Having a current up-to-date list of your accounts and investments and ensuring that someone has the information or access to this information to avoid further heartache at a difficult time. Though these issues may feel morbid to bring up, they are vital to ensure that your loved ones can live on as comfortably as possible.

Should you require any assistance or guidance on these or any other financial or business matters please do not hesitate to get in touch or arrange a meeting with us.

 

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DCA PARTNERSDECLAN DOLAN & EAMONN GARVEY

SHOW SME THE MONEY!

The question of financing can often be the difference between taking action on setting up your own business, and deciding not to go ahead with it. Certainly in recent years, financing has become somewhat of a fraught term with cash flow being a major issue and less options being made available to Small and Medium Enterprises (SMEs). Banks remain the top choice for these companies to gain finance as only a small minority seek alternative options for financing their business. It has been reported that even after finding themselves declined for finance from the banks, many SME owners still do not seek out alternative funding options. With the financial climate in Ireland beginning to take a slight turn for the better in recent months, perhaps now would be a good time to begin looking beyond the banks when you want to begin or grow your business and are in need of the financial backing or financial boost to do so.

 

The Strategic Banking Corporation of Ireland has recently urged SMEs to look towards alternative funding options to the banks, as this may allow them to access funding more suited to their individual needs. With the Irish economy now making a valiant attempt to recover, there are a number of new lenders emerging which offers a great deal more choice to SMEs which previously would have had very few options after being declined by the major bank lenders. Due to a newly competitive market, these lenders can often offer quite competitive rates and have the financial confidence to accept what major banks may see as being a risky investment. Another positive aspect of the arrival of these new lenders to the market is that many have the ability to deliver funds far faster than major lenders.

 

Many SMEs may suffer from seemingly weak financial reports when compared to larger companies, or be in the midst of a restructuring plan, which may result in them being declined by bank lenders. Perhaps these new more widely available lenders could now make all the difference for these companies which will now have more options to choose from.

 

Invoice financing is one such way for SMEs to avail of funding through companies such as Clancy Cashflow Solutions who welcome businesses which have been declined by larger lenders and allow borrowers to release funds tied up by their debtors in order to immediately make use of funds. Whilst some lenders create an impossible situation for borrowers wherein they may not have access to enough cash to make it until the payment of the loan, this financing option allows for swifter access to funds, sometimes even within 24 hours.

 

Invoice financing works by raising an invoice to your customer which is then forwarded to the funder who will allow for the almost immediate release of a portion of the requested funds to allow your business to stay running smoothly.

 

Should you have any financial queries or issues that you require advice on, please don’t hesitate to contact us at DCA Accountants, where we will be happy to help in any way.

 

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DCA PARTNERSDECLAN DOLAN & EAMONN GARVEY

AIB TO THE RESCUE

The only thing more stressful and daunting to new business owners than an unexpectedly large bill landing on your office doormat, is that time of year when the “I know it’s going to be large, but maybe if I pray really hard it won’t be” barrage of annual bills come flying in. This year, AIB have come up with two new solutions to this common problem that might leave you imagining the logo wearing a cape.

For most business owners, the worst evil of annual bills, is their size and the fact that they need to be paid all at once. Without an enormous stockpile of gold in your basement, these bills can often loom over you and cause an unwanted interruption in your cash flow and savings potential. This is where AIB can step in (cue the superhero soundtrack) with their new Prompt Pay and Insurance Premium finance options.

As part of AIB’s ‘Backing Brave’ initiative, Prompt Pay and Insurance Premium are two newly announced short-term financing products designed to take the sting out of annual bills. The Prompt Pay product covers all large one-off payments – apart from Insurance payments, a shortfall which is picked up by the Insurance Premium product to assist both AIB and non-AIB customers manage their monthly outgoings.

These Prompt Pay loans must be a minimum of €5000 and be paid off within 11 months. Prompt Pay can assist customers with outgoings such as:

  • Preliminary tax
  • Pension contributions
  • Commercial property rates
  • Subscription fees to professional/trade associations
  • Annual audit fees

The greatest bonus for business owners in undertaking these loans is that both are offered at a fixed interest rate. This offers the peace of mind of knowing the cost of your monthly repayments in advance. The ability to spread these usually all-in-one costs over a period of 11 months can assist you in budgeting for the year ahead and help you to manage your cash flow without these lump sum interruptions. The only extra cost incurred here is a documentation fee of €63.49 which will be charged with your first repayment.

Both Prompt Pay and Insurance Premium proclaim themselves as easy to set up through your local branch. Should you have any concerns or wish to gain advice on your eligibility and finances in general don’t hesitate to contact us here at DCA Accountants.