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Easier access to loans for Irish SMEs, hopefully

Interest discount among perks for small business signing up for struggling microfinance scheme.

MICROFINANCE LOANS will be offered through the government’s network of small-business support offices at lower interest rates in the hope more people will take up the the struggling scheme.

The rebranded ”LEO Microfinance loans”, worth up to €25,000 each, will be available to small businesses through the network ofD 31 Local Enterprise Offices (LEOs) around the country after a launch today.

The unsecured loans will be offered in partnership with Microfinance Ireland, a not-for-profit lender set up to deliver the government’s microenterprise loan fund to new or growing businesses with less than 10 staff.

The national microfinance scheme has been criticised for its slow rate of lending - offering only €4.8 million to small businesses in nearly two years out of the €90 million set aside for it to pay out over a decade.

Microfinance mcgconor / Twitter mcgconor / Twitter / Twitter

Microfinance Ireland chief executive Michael Johnson told TheJournal.ie less people than hoped had applied for the loans, but there had already been an increase in traffic this year.

We think that the visibility of the Local Enterprise Offices in their areas and the awareness that they will build will indeed lead to an increase in application levels,” he said.

Johnson said the introduction of a reduced interest rate – a 1 per cent discount at 7.5 per cent - was not an admission the standard offering had been too high in the past.

He said clients were often unable to get financial backing from traditional lenders and cheaper loans generally needed security.

pv 040914 johnson 5 Microfinance Ireland chief executive Michael Johnson Provision Photography Provision Photography

That’s unsecured, not insecure

Unsecured loans are considered much more risky than loans backed by collateral such as property and generally attract a higher interest rate.

Microfinance Ireland expects up to 250 new applications for the loans before the end of the year for a total value of €3.8 million if all go through at an average value of €15,500.

It forecasts the increased lending would support 500 jobs in Ireland.

But of course not all loans are getting through

About half the 475 applications Microfinance Ireland received by March had been approved, although today the organisation said the number of loans given the green light was now up to 308.

Johnson said it was expected that more applications would be successful under the new scheme as there was a higher success rate for businesses which did their paperwork with the help of LEO staff.

Small firms say cheers

The Small Firms Association said the loans would help small businesses in need of money or new businesses facing typical startup costs of between €15,000 and €17,500.

Director Patricia Callan said: “It should encourage many more people with good business ideas to take the risk and start up in business, as well as enabling those companies who may still be struggling to stay in business.”

READ: The government wants to hear from cash-strapped SMEs

READ: “They’ve replaced the tellers with plants” – are banks interested in lending to small business?

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12 Comments
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    Mute windbag
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    Jun 8th 2020, 11:45 AM

    Two of my friends work for two different companies in the city centre and they have been told to work from home till January. Not only that but come January there companies have said more than likely they will be in office 2 days a week and home 3 forever…. They are delighted…

    247
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    Mute ed w
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    Jun 8th 2020, 12:24 PM

    @windbag: were been told September. but as my broadband coverage of any kind is terrible I cant wait to go back and work properly although a couple of days a week might work.

    38
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    Mute Forest Hump
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    Jun 8th 2020, 5:03 PM

    @ed w: makes sense, this should’ve been put in place years ago. Better for the environment, better for workers and there will be almost no impact to most businesses. Cafes/restaurants may lose out though

    24
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    Mute Disabled Junkie
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    Jun 8th 2020, 12:22 PM

    If this pandemic has taught us anything it’s remote working is practical and should become part of the “new normal” where possible. Hopefully the days of having to commute to the office just to be seen are behind us.

    136
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    Mute Rochelle
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    Jun 8th 2020, 11:34 AM

    This is what the “open up for business” crowd don’t seem to understand, most customers aren’t interested and want to avoid unessential visits and shopping.

    131
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    Mute Sven Gilmore
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    Jun 8th 2020, 11:20 AM

    The money just isn’t there folks!!!

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    Mute Cynical
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    Jun 8th 2020, 11:29 AM
    52
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    Mute Sam Greene
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    Jun 8th 2020, 1:34 PM

    @Cynical: oh shuttup

    36
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    Mute Dave Nomates
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    Jun 8th 2020, 4:42 PM

    @Cynical:
    AGAIN, TAKEN FROM A FACE MASK BOX.

    THIS PRODUCT IS AN EAR LOOP MASK.
    IT IS NOT A RESPIRATOR AND WILL NOT PROVIDE PROTECTION AGAINST COVID-19 (CORONA VIRUS) OR OTHER VIRUSES OR CONTAMINANTS.

    6
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    Mute Cynical
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    Jun 8th 2020, 4:50 PM

    @Sam Greene: Bless you, its a cornerstone for all the other countries that are currently re-opening and could allow us to reduce the 2 meter distance.

    Also expressly recommended by the World Health Organisation:
    ‘The World Health Organization has said that people in Ireland should get into the habit of wearing face coverings, even if it’s not mandatory to do so.’
    https://www.rte.ie/news/coronavirus/2020/0606/1145825-coronavirus-facemasks-who/

    I’ll just wait here while you find a link for a Facebook group that links mask wearing to developing autism.

    7
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    Mute Cynical
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    Jun 8th 2020, 4:57 PM

    @Dave Nomates: Stop shouting! You do realise that is a legal disclaimer to protect from anyone that does contract the disease from claiming from them? Masks are not perfect, but they are much better than no protection.

    Depending on the type of mask used, they are between 77% and 96% effective at stopping transmission.
    https://www.thelancet.com/journals/lancet/article/PIIS0140-6736(20)31142-9/fulltext
    https://www.livescience.com/face-masks-eye-protection-covid-19-prevention.html

    5
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    Mute Isabel Oliveira
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    Jun 8th 2020, 12:01 PM

    No widespread usage of masks in buses is ridiculous. Absolutely reckless.

    75
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    Mute Eugene Tyson
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    Jun 8th 2020, 11:38 AM

    So… buses were less busy as they returned to normal-ish operating hours.

    Basically, they were busier when there was fewer buses. Which means returning to normal is the right thing to do, with fewer people on buses because there are more buses, is a good thing right?

    Give it a week and it will be crazy again. Especially with more workers returning. Increased traffic will be huge as more people won’t want to get public transport, and take their cars instead.

    Once the schools and colleges are back it will be bedlam. Typically when schools and colleges are off the traffic is ok anyway.

    48
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    Mute Eileen O'Sullivan
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    Jun 8th 2020, 11:51 AM

    @Eugene Tyson: that’s a logical analysis. really well argued.

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    Mute Dave Nomates
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    Jun 8th 2020, 11:21 AM

    Great to see the majority of right thinking people refuse to wear a stupid mask,
    Insert Idiotic reply below.

    123
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    Mute Robert
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    Jun 8th 2020, 11:24 AM

    @Dave Nomates: have a nap Dave

    109
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    Mute Fabio Dillon
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    Jun 8th 2020, 11:27 AM

    @Dave Nomates: masks greatly reduce the spread of droplets which is what spreads flu.

    If you disagree you disagree. Majority agree. Including any doctor or biologist you will speak to.

    141
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    Mute Eugene Tyson
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    Jun 8th 2020, 11:39 AM

    @Dave Nomates: Wear the mask, it’s only a mask.

    50
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    Mute Eileen O'Sullivan
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    Jun 8th 2020, 11:50 AM

    @Eugene Tyson: Dave’s face covering of choice is no doubt a balaclava.

    42
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    Mute David Jordan
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    Jun 8th 2020, 11:51 AM

    @Dave Nomates: Peer review research found that people who refuse to comply with social distancing guidelines e.g. wear masks, are more likely to be psychopathic and narcissistic:

    “Psychopathic traits linked to non-compliance with social distancing guidelines amid the coronavirus pandemic”

    New research provides some initial evidence that certain antagonistic personality traits are associated with ignoring preventative measures meant to halt the spread of the novel coronavirus SARS-CoV-2.

    The study has been peer reviewed and accepted for publication in the journal Social Psychology and Personality Science. It is currently available on the PsyArXiv preprint website.

    “One potential implication from this research is that there may be a minority of people with particular personality styles (on the narcissism and psychopathy spectrum) that have a disproportionate impact on the pandemic by failing to protect themselves and others.”

    https://www.psypost.org/2020/06/psychopathic-traits-linked-to-non-compliance-with-social-distancing-guidelines-amid-the-coronavirus-pandemic-56980

    46
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    Mute NotMyIreland
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    Jun 8th 2020, 11:52 AM

    @Dave Nomates: So childish. “stupid mask”

    30
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    Mute Kate Flaherty
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    Jun 8th 2020, 11:54 AM

    @Dave Nomates: here’s an idiotic reply for you Braveheart, how comfortable would you be on public transport should the person beside you start to cough or sneeze and have the same idiotic attitude as yourself and choose not to wear a mask?, do you actually believe people are happy about having to wear a mask?, probably not but they do it out of respect and regard for others, so the next time you see someone wearing a mask just think they’re wearing it to protect not only themselves but you too…

    47
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    Mute Delboy79
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    Jun 8th 2020, 12:19 PM

    @David Jordan: bit OTT there David . Some people are just self conscious about attracting attention/looks by wearing a mask . It’s not the norm yet . I find myself unintentionally looking at people in Tesco who are wearing a mask .

    11
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    Mute Gary Kearney
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    Jun 8th 2020, 12:57 PM

    @Dave Nomates: Nothing can top your idiotic remark

    16
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    Mute SaveTheTrees
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    Jun 8th 2020, 1:18 PM

    Staggering the opening hours for retail was a great idea, props

    17
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    Mute conex
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    Jun 8th 2020, 12:42 PM

    Them numbers will quadruple…….on dole day !

    14
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    Mute Mislav Smok
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    Jun 8th 2020, 3:49 PM

    Aha you will see how many people will lose jobs now. But stay home fake virus

    8
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    Mute Evelyn Keely
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    Jun 8th 2020, 2:46 PM

    I beg to differ it is very busy frightenly so Luas is a hell of a lot busier I live in the city centre and can see a huge difference in footfall and transport I appriciate some are on their way to or from work but not all…just stay safe if coming into town…

    7
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