A topic we touch on quite regularly is Irish Small and Medium Enterprises (SMEs). These are a continuing topic due to the fact that SMEs are fast becoming a backbone of Irish business and employment, with them accounting for over half of all employment in Ireland. Recently we have spoken about the trials and tribulations of gaining adequate financing as an SME in Ireland, and today we have some welcome news to share on that front. A UK finance firm called BMS which was set up in 2005 has recently launched a €30m debt fund targeting SMEs in Ireland. This firm will charge interest rates of between 12 and 15% to Irish SMEs.
BMS Finance Ireland is backed by the Ireland Strategic Investment Fund (ISIF) and will focus primarily on those SMEs we have spoken about previously, those who have been unsuccessful in gaining funding through the traditional means (in Ireland, these would be primarily the banks). Director of the firm, Shane Lanigan has said of the fund “You see a lot of alternative funders, crowd-funders for example in the market up to around €500,000 and then the banks will start playing when they’re looking for €5m plus, but €1-3m is the most difficult gap in the market for SMEs to finance.” Thus, BMS will seek to fill in this gap for the SME market, allowing more growth and opportunity in this vital sector.
The rates from BMS Finance Ireland start at more than double the highest average rate being offered to SMEs by banks, which will give these companies a greater starting point from which to expand. The fund will be available to all sectors apart from the property sector. BMS Finance Ireland has said that their primary focus will be on entrepreneurs and owner-managed businesses, having already begun financing by investing in two companies. The firm is also looking toward opening an office in Dublin in the coming months which will be a welcome influx of job opportunities in itself for the city.
Going forward BMS Finance Ireland will be looking to integrate into the Irish market and greatly increase their lending potential and the range of lending they can offer. Hopefully this state-backed lending initiative will be the beginning of a new era of success for Irish small and medium enterprises.
Should you require any guidance or assistance with your own business or financial matters, please do not hesitate to contact us here at DCA Accountants where we will be delighted to assist in any way we can.
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