Business Loans for Small Irish Companies: Microfinance Ireland, SBCI and Credit Unions

Ciara and Mark run a bakery company in Wexford. After two years of trading, the old oven is struggling and the delivery van is on its last legs. They need roughly €45,000 for a new deck oven and a van. Their bank's reply is short: "Send us your accounts and projections."

That reply is typical. Getting a business loan in Ireland as a small company is often less about finding a lender and more about having the right paperwork ready. This guide covers the three routes most small companies use, then the pack every lender asks for.

Microfinance Ireland: loans for microenterprises

Microfinance Ireland (MFI) lends to small businesses that struggle to get credit from banks. Its loans run from €2,000 to €50,000.

To be eligible, your business must:

• Have fewer than 10 employees
• Have turnover under €2 million
• Be based in the Republic of Ireland
• Be unable to get finance from banks or other commercial lenders

Terms are typically 3 years, and up to 5 years in some cases. Start-up loans can include an interest-only period, and there are no early repayment penalties.

Applying through your Local Enterprise Office, or after a referral from your bank, gets you a 1% interest discount. Your LEO can also help with the business plan, which links well with start-up grants and mentoring if you are newer.

MFI's lending is now partly funded through the SBCI, so you may see the two names together.

SBCI-backed loans through banks and partners

The SBCI (Strategic Banking Corporation of Ireland) does not lend to businesses directly. It provides low-cost funding to partner lenders, including banks, credit unions and non-bank lenders, who then lend to you.

The main scheme for small companies right now is the Growth and Sustainability Loan Scheme:

• Loans from €25,000 to €3 million
• Terms of 7 to 10 years
• Unsecured up to €500,000 (with some exceptions)
• Above €500,000, personal guarantees are limited to 20% of the loan
• Open until 30 June 2029 or until fully subscribed

To apply, you register on the SBCI Hub, complete an eligibility form and get an eligibility code, which is valid for six months. You then give the code to a participating lender, who makes the credit decision. The code does not guarantee approval.

The SBCI also supports Green Transition Finance, invoice financing, and leasing and hire purchase through its partners. A van, for example, may suit hire purchase.

Credit unions and business lending

Do credit unions give business loans? Many do. Credit unions are listed among the SBCI's partner lenders, and some offer business lending to local sole traders and small companies.

The appeal is local knowledge. A credit union that knows your town and your trade may look at a small loan differently from a large bank. Ask your local branch what it offers and what it needs.

What lenders ask for when you apply for a business loan in Ireland

What do I need for a business loan? Whichever lender you pick, expect to provide most of this:

• Annual accounts for the last one or two years. Our annual accounts service prepares these.
• Recent management accounts showing the current year's figures. See our guide to management accounts.
• A cash-flow forecast showing how repayments fit around your other bills.
• A tax clearance certificate confirming your tax affairs are in order. Our tax clearance certificate guide shows how to get one.
• Business bank statements for recent months.
• A short business plan explaining what the money is for.
• ID and details for each director. Lenders will also check your credit history.

For a business loan in Ireland, the quality of this pack often decides the outcome.

Getting your paperwork lender-ready

Ciara and Mark had a problem: their bookkeeping was four months behind, so they could not produce current management accounts.

If you are in the same position:

• Catch up first. Our catch-up bookkeeping service brings records up to date so the numbers can be trusted.
• Produce management accounts quickly. Lenders want figures from within the last few weeks, not last year.
• Build the forecast from real numbers. Show the loan repayment as a monthly line.
• Check tax clearance early. A missing return can hold it up.

Once the bakery's books were current, its accountant prepared management accounts and a 12-month forecast. The bank then had what it asked for.

If you're refused

Ask the lender to explain the refusal in writing. That tells you what to fix.

If a participating bank refuses, reduces or withdraws credit of between €1,000 and €3 million, you can ask Credit Review, a State service, to look at the decision. You can also approach Microfinance Ireland, which is designed for businesses that have been turned down elsewhere.

Then fix the gaps, whether that means more up-to-date accounts, a stronger forecast or a smaller first loan, and apply again.

Frequently Asked Questions

Get your accounts lender-ready

Most loan applications stall on paperwork, not on the idea. Abbey Blue Formations prepares the accounts, management figures and forecasts lenders ask for. See our bookkeeping packages, or use the formation calculator if you are setting up a new company. To talk to us, click here.