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Business, Size Matters

We are constantly reiterating the importance of Small and Medium Enterprises (SMEs) to the Irish economy, and with good reason. SMEs make up over half of all Irish business and have begun to form the backbone of our economy in recent years. Unfortunately SMEs are also often the most difficult businesses to get off the ground and keep running in the current changing economic climate. This is why our recent newsletter focus has been largely targeted to providing information on newly available funding and assistance for these vital businesses. Today we will be discussing the new Companies (Accounting) Act of 2017 and what this means for SMEs.

The Companies (Accounting) Act 2017 was brought into effect as of Friday, June 9th 2017. According to the Department of Jobs, Enterprise and Innovation this new act may free up some much needed time for SMEs as it should reduce their financial reporting obligations allowing this time to be used to further the business in other ways.

Importantly and interestingly for owners of small businesses, this Act is due to create significant changes to the creation of what is known as a ‘Micro Company’. In order to be classified as a Micro Company, a business must not have a turnover exceeding €700,000, a balance sheet exceeding €350,000 or average employee numbers exceeding 10. In return, being classified as a Micro Company offers the company a number of benefits including there being no obligation to file a director’s report and exemptions from disclosing director’s remuneration.

Some companies previously defined as Medium may under this act be redefined as Small whilst some companies previously defined as small may be redefined as Micro due to a change in the thresholds for qualification for these categories. In addition, any companies which are redefined as Small Businesses will need only file abridged financial statements, provided their turnover does not exceed €12million, their balance sheet does not exceed €6million and their average number of employees does not exceed 50.

It is possible that conversely, some Medium and Large companies may find themselves with a greater level of financial reporting than previous under these new thresholds so we would heavily advise studying the changes this act poses in detail and knowing the new status of your business thoroughly as well as the new financial reporting requirements associated with this definition.

Should you require any further information, guidance or assistance on these or any other business or financial issues please don’t hesitate to get in touch with us here at EcovisDCA where we are always happy to be of assistance.

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DCA PARTNERSDECLAN DOLAN & EAMONN GARVEY

Score One for SMEs

For the past few months, the term Brexit has acted as somewhat of a Bogeyman figure looming over many Irish business as the haze of uncertainty for what a British exit from the European Union would mean for Irish borders and trade with the UK, on which many companies rely. Perhaps the most concerning idea for Irish businesses would be what this would mean for Irish Small and Medium Enterprises (SMEs). We have spoken at length in the past about how important the SME sector is in Irish business, forming the backbone of our economy, and how vital it is to protect these types of businesses in changing times. Many Irish SMEs rely on business with the United Kingdom and so a cloud of uncertainty and insecurity has plagued the sector in recent months.

 

Recently, we have spoken about new funding opportunities coming to light for SMEs and this week it appears that the future may be beginning to look even brighter for these vital enterprises. The Minister for Employment and Small Business Pat Breen has urged SMEs and micro businesses to turn to their Local Enterprise Offices (LEO) for information about a range of supports now available to them. A newly announces suite of Brexit supports is now available to SMEs and microbusinesses through their Local Enterprise Offices which include

  • Access to the ‘Brexit SME Scorecard’ online tool where micro and smaller businesses can self-diagnose their readiness for Brexit – A vital planning tool which may assist many small businesses.
  • A ‘Technical Assistance for Micro-enterprises’ grant to help LEO clients to find new markets and exports.
  • Rollout of ‘Lean for Micro’ nationwide which will make small businesses more efficient and competitive.
  • A ‘LEO Innovation and Investment Fund’ pilot programme to support innovation in micro-enterprises and get them investor ready to scale their businesses.
  • Tailored mentoring to address Brexit related business challenges.
  • Training on specific Brexit challenges, including financial aspects.

As you can see from this list, these supports are specifically aimed at providing information and a framework of support and guidance for these businesses to utilise when navigating the uncertain times ahead. Minister Breen was quoted as saying of the support:

“I am delighted to announce this suite of important Brexit supports which will be available for small and medium enterprises. It is imperative that micro and small businesses have the tools and supports needed to navigate through what is uncharted territory. This is part of the Government’s Brexit planning and I am very pleased that my Department through Enterprise Ireland has been able to accelerate the rollout of these new LEO offerings worth up to €3.4 million, and I urge small and micro business owners to get in touch with their LEO to see how they can help.” 

These supports focus heavily on planning ahead which will be vital in the coming months for all businesses. Should you require further information, guidance or assistance please give us a call.

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DCA PARTNERSDECLAN DOLAN & EAMONN GARVEY

SOWING THE SEEDS OF INTERNATIONAL GROWTH

Success is a very strange beast which appears in different forms for all individuals whether business owners or not. For business owners in Ireland, often the first port of call is to establish some small measure of success on home turf, before seeking to grow the business elsewhere. In the years following the financial crisis we have seen a mass exodus of people leaving our country, visas in hand to find their fortunes elsewhere. It would appear that this has slowed considerably in recent times so today we are going to focus on the other side of the coin, managing to grow your Irish business internationally while remaining on home ground.

 

Recent reports have suggested that since Ireland’s financial recovery has started to pick up some form of speed, many of those who have travelled to Australia or elsewhere and found success there have returned to Ireland in order to utilise their newfound skills and level of success. The Enterprise Ireland office in Sydney is said to be working with more than 150 Irish companies, whilst a vast number of Australian companies are now expanding operations in Ireland. Similarly, Irish recruitment agency CPL created a pop-up office in Melbourne in which it interviewed Irish professionals for positions back in Ireland.

 

So what options exist for growing your Irish business internationally whether you are making your return or have stayed put?

 

The Enterprise Ireland Internationalisation Grant gives Irish businesses the opportunity to grow in international markets. This grant focuses solely on supporting the costs of undertaking new market research which is a valuable asset in growing your business in new areas and the research must focus on an area not already being covered by your business. There are a number of eligibility criteria available through the Enterprise Ireland website including that the business must be based in the Republic of Ireland and employ more than 10 people. There is also an available option for much larger companies. The maximum grant available here is €35,000, which would certainly garner valuable information for growing your company. This grant is open to applications all year round.

 

For smaller companies and SMEs, the Enterprise Europe Network is an invaluable resource which will assist in gaining new contacts and support networks beyond the door of your own business. This is a support network for SMEs and other companies with international ambitions assisting in gaining contacts and providing much needed information about funding available. This is also an important resource when looking to grow your business internationally as it provides valuable information on EU regulations which will ensure that your business is following all appropriate protocol.

 

The Enterprise Europe Network also provide an access to EU funding programme for SMEs to assist in this process as well as giving Irish companies the opportunity to give feedback on EU legislation. This is a resource we would urge all Irish SMEs whether dreaming big or small to engage with.

 

If you have any queries, please don’t hesitate to contact us here at DCA Accountants, where we will be happy to assist and advise in any way possible.

 

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DCA PARTNERSDECLAN DOLAN & EAMONN GARVEY

WHAT’S A FACEBOOK WHEN IT’S AT HOME?

With small and medium enterprises (SMEs) making up a generous portion of all Irish businesses currently, we have spoken at length about the many and varied issues which face these companies. There are a great many difficulties to be faced in setting up and ensuring the continued thriving of a small business, and often it can seem like there are very limited helpful tools at your disposal. Today, we are going to focus on the positives considering how integral SMEs are to the Irish economy, now is a good time to take into consideration how these companies can utilise available tools to ensure the success of your small or medium business from the outset.

 

One of the greatest tools at any company’s marketing disposal at present are those largely free channels which allow a company to get their message to a wider audience known as social media. As we have discussed previously, social media and website marketing can be a key tool for companies of all sizes, with video marketing seeing a massive surge in popularity across social media in recent years. Social media can be a tricky tool to get a handle on at first, but could well be the key to getting more customer traffic into your business.

 

So what happens if you happen to not be the most internet or media savvy small business owner? Finally, there might be assistance on the horizon for you to empower you to harness the power of this medium. Recently, smaller Irish companies have been encouraged to contact their local Enterprise Office to gain assistance in building or improving an online presence for their company.

 

An initiative through your local Enterprise Office can help you unlock the online potential of your business by offering training and the ability to apply for a grant of up to €2,500 to build or update your website. If this seems like an ideal solution to your company’s tech worries, the only condition is that your small business must have fewer than 10 employees. If this is the case, we would advise contacting your local Enterprise Office to find out what your options are and watch your business grow as a result. As it has been estimated that approximately 90% of Irish consumers will research a product or service online before proceeding to make a purchase, it is now almost essential to have an online presence for your business.

 

Minister for Communications Denis Naughten has advised that even companies that already have an online presence should avail of this training to build on their existing presence.

“I would encourage any small business employing 10 people or less to avail of the training to make sure they are using Facebook and Google properly and to be able to receive payments online.”

 

Indeed, in this digital age we would encourage all clients to ensure that their online presence is functional and up-to-date. Should you require any assistance or guidance on any financial or business matters, please do not hesitate to call us here at DCA Accountants.

 

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DCA PARTNERSDECLAN DOLAN & EAMONN GARVEY

REFINANCING – COVERING YOUR ASS..ETS

After suffering through some harsh financial times in recent years, when we hear phrases such as cash flow boosting, restructuring and refinancing one of two feelings may occur to us. We either are stricken with more fear than that which occurs on Sunday evenings as we imagine all that we have built into our company walking out the door on us (“anything but the beanbags please, they are our only link to trendiness!), or the clouds part and we may think we hear the angelic chorus of our financial salvation.

 

The refinancing of assets sounds like a dangerous road to go down, and can inspire more than a bit of hesitancy when the idea is brought up, but restructuring and refinancing of your assets may be the one thing standing between your business and the ultimate success of overcoming financial obstacles. In recent years it has been found that this unlikely alternative can ultimately help businesses in financial difficulty, in particular SME’s to survive through tough times.

 

The refinancing of assets involves financing assets you already own in order to unlock some much needed cash flow over a period of time. The money borrowed in this way is secured against the value of the existing assets. The cash tied up in these assets is then released in order to allow these funds to be utilised in other ways. This may involve the restructuring of existing loans and the setting out of a new repayment schedule, perhaps extending the period of an existing loan. Refinancing can be an excellent way of unlocking cash from assets you already own such as company cars or general machinery and equipment.

 

Many SME owners may not be aware that this is a viable option for their business to boost cash flow and engage in new opportunities. Whilst refinancing at the present moment may be primarily geared towards the SME market, it isn’t just an option for SME’s. The refinancing of assets is also suitable for larger companies who already have strong assets, as this can generate some extra funds that may ease any financial pressure.

 

Of course, refinancing does come with its own set of risks and you must seriously consider your repayment options and capabilities before engaging in this activity to ensure that you do not set your business up for further complications down the line. Once you confirm your repayment abilities and set out a plan you are comfortable with, this can be an easy way of freeing up cash within your business at a time when it might be most needed, allowing you to invest further in important projects or perhaps even take on new and exciting opportunities.

 

If you are interested in refinancing some existing assets within your own company, or just curious as to how you would go about this give us a call here at DCA Accountants and we would be glad to talk you through your options.

BUDGET 2016: WHAT DOES IT MEAN FOR SME’S AND THE SELF-EMPLOYED?

It has been reported that SME’s now account for an enormous portion of all enterprise in Ireland. Unfortunately, SME’s and the self-employed rarely see their efforts being rewarded in any way when the time of the budget rolls around each year. Was the budget for 2016 any different? We have compiled some of the main changes that will affect both SME’s and the self-employed for your reference.

Self Employed Tax Credit               

 

It was announced in Budget 2016 that there would be a new earned income tax credit of €550 available for those who are self-employed, including farmers. Whilst this is still quite far behind the tax credits available to others, it is somewhat of a beginning for the process of not alienating the self-employed through taxation. It is suggested that this figure would be increased in future years.

Capital Gains Tax Reduction

 

There will also be a very welcome reduction in the Capital Gains Tax for 2016 for the self-employed and entrepreneurs. This reduction takes the tax from 33% to 20% on a gain up to €1 million, which could have significant positive consequences, despite still remaining quite far behind the UK and the North of Ireland in relation to this tax. The expenditure cap for Film Relief has also been increased to €70 million which is good news for this sector.

Farmers

 

Farming in particular was a sector which was more acknowledged in this budget than previous, as the general stock relief and the stamp duty exemption for young farmers was extended to 2018. It was also announced that a new succession transfer proposal would be put forward in order to increase certainty for the next generation of farmers and assist with a more long-term thinking that may not have been possible previously.

Microbreweries

 

Another sector of self-employment and SME’s that was newly acknowledged in Budget 2016 was the increasingly popular microbreweries. The excise relief for microbreweries will now be made available upfront. This is welcome news for the industry as it may help to free up some much needed cash flow which is always important for these SME’s.

In Conclusion

 

It is also hoped that the reintroduction of the Social Welfare Christmas Bonus of 75% will boost sales and income for SME’s, thus generating more revenue overall.

 

Unfortunately there have been few steps taken to support entrepreneurs in particular. Whilst these measures for the self-employed and SME’s in particular are small steps, at least these steps are finally being taken in the right direction and we would hope to see an end to the previous discrimination against these sector in future budgets, as SME’s begin to form the backbone of our modern economy.

SBCI LOANS

Strategic Banking Corporation of Ireland

In March of this year, a new low-cost loan fund was announced by the SBCI. This new fund could see SMEs and the farming sector have greater ease of access to much-needed funds through some of the country’s major banks. As of late March, its board of six directors has been confirmed, taking this from a pipe dream to a very real and tangible option for the growth of smaller Irish businesses.

This fund will offer long-term working capital through major lending institutions. Its purpose is to offer SMEs and the farming sector more flexible products than are currently available to them. They will offer low-cost funding to financial institutions. The idea being that these savings will then be passed on to SMEs. AIB and Bank of Ireland have already signed up as partners.

So what is the SBCI?

The SBCI is the Strategic Banking Corporation of Ireland is a new bank launched in the last quarter of 2014. It is hoped that it will become the primary source of funding for SMEs in coming years with the Government hoping that over €5billion will be made available to SMEs in the future.
The initial funders for this new banking venture are the Ireland Strategic Investment Fund (ISIF), the European Investment Bank (EIB) and the KfW German promotional bank.
The SBCI is a strategic SME funding company with the primary goal of creating access to flexible funding for Irish SMEs. The SBCI aims to:

  • Provide flexible products with flexible repayment options.
  • Provide lower cost funding to major lending institutions to be passed on to SME’s and the farming sector.
  • Create real market competition for new entrants to the SME lending market.

AIB are currently offering customers looking for a new business loan of up to €30,000, an answer within 48hours. They are also offering loans at a 2% discount from their Standard Business Loan Rate. Funding of up to €5m for the growth and expansion of your business will be made available. Their terms will be between 2 and 10 years.

Is a loan with SBCI the right choice for your business?

These loans are open to most SMEs. This form of funding is open to your business providing it meets the following criteria:

  • The company must have a turnover of €43m or less.
  • The company must not be part of a wider group of businesses.
  • The company must have less than 250 employees.
  • The company must have a significant presence in Ireland.
  • The company must have less than 25% of their capital held by public bodies.
  • It is important to bear in mind that your chosen lending body will need to share your information with the SBCI

We would advise consulting with your local participating lending body in order to ascertain your company’s eligibility for this scheme. If you have any queries at all about this fund and how it could benefit your business, please don’t hesitate to contact us at DCA Accountants.