Last week’s article looked at the sources of grant finance available to new and start-up enterprises. This week’s article will look at alternative sources of finance.
Business Angel Partnership (www.businessangels.ie )
The Business Angel Partnership is a joint initiative between Enterprise Ireland, InterTrade Ireland and the Irish Business and Innovation Centres e.g. WESTBIC in the Galway area.
It matches private investors with pre-screened investment opportunities in start-up and developing businesses. The partnership can be of enormous benefit to both the investor and the entrepreneur. The investor gets access to motivated, early-stage companies with strong growth potential. The start-up business receives funding as well as access to private investors with vast and varied business experience.
The Business Angel Partnership works on a confidential basis. All investors, companies and their advisors pre-register, after which they obtain access to ambitious companies with growth potential. Before entering the programme, start-up companies are pre-screened for eligibility.
The investors are contacted directly when a particularly suitable match is identified. They are initially given a brief outline of the business and if interested can request more detailed information. Current market conditions and a lack of availability of bank finance means that there are some excellent investment opportunities available to private investors.
The Business Angel Partnership arranges and facilitates initial meetings between investors, companies and advisors and can become more involved in the process if desired. The Business Angel Partnership also creates further opportunities for companies, investors and advisors to network by hosting seminars on topics of related interest. More information is available from [email protected] or [email protected].
Seed Capital Scheme (www.revenue.ie )
The seed capital scheme provides for a refund of tax already paid by an individual, when that individual sets up and takes employment in a new qualifying company. An employee who leaves employment for any reason and invests by means of shares in a company, which carries on a new business, may claim a refund of income tax. The scheme is directed towards those who are or were in a PAYE type employment. Revenue will examine the income sources of individuals in the four years prior to investment to ensure that they meet this requirement.
An individual can claim a refund of income tax paid over the prior six years. The amount of the refund available will depend on the level of the investment made and the taxable income in those years. The refund will be provided on the tax paid on a maximum income of €100,000 per annum, again the level of refund available will depend on the level of the investment made and the taxable income in the relevant years.
A refund can be claimed for two separate investments made in the company once they are made within a three year period.
To meet the requirements for qualification, the newly set up company must be carrying on a “qualifying trading operations”. Some of the activities which will qualify include:
Manufacture of goods
Operation of certain tourist traffic undertakings
Internationally traded services
Cultivation of mushrooms
Commercial R&D activities
Recycling activities
To qualify for the scheme, the company will also have to obtain certification from an appropriate body stating that the trading operations will be a bona fide new venture, which may be eligible for grant aid from the certifying body.
