SME fi­nance fund to dou­ble in size to €40m

Irish Independent - - Business - Gavin McLough­lin

AN EU-backed fund de­signed to in­vest in Ir­ish star­tups and SMEs is to dou­ble in size to €40m.

The ex­tra fund­ing comes from En­ter­prise Ire­land and the Eu­ro­pean In­vest­ment Bank (EIB).

The Eu­ro­pean An­gels Fund Ire­land pro­vides money to in­vest along­side a num­ber of so-called an­gel in­vestors who take stakes in Ir­ish com­pa­nies.

The first €20m has now been al­lo­cated. In Ire­land there are nine ap­proved an­gel in­vestors un­der the scheme.

The scheme pro­mot­ers be­lieve that in to­tal the €40m fund will sup­port in­vest­ments in 100 com­pa­nies.

EIB vice pres­i­dent An­drew McDow­ell said dou­bling the fund would “en­able Ir­ish Busi­ness An­gels to sig­nif­i­cantly in­crease in­vest­ment ac­tiv­ity and help world-class com­pa­nies to grow.”

Kevin Sherry from En­ter­prise Ire­land said an­gel fund­ing “pro­vides both es­sen­tial cap­i­tal and hugely valu­able in­dus­try ex­pe­ri­ence” to help early stage com­pa­nies grow.

Cen­tral Bank Gover­nor Philip Lane ad­dressed the is­sue of SME fund­ing in a speech yes­ter­day.

He told an au­di­ence at the Dublin Cham­ber of Com­merce that loan ap­pli­ca­tion rates from SMEs had not in­creased de­spite the im­prov­ing econ­omy.

“As many as half of SMEs cur­rently re­port that they are not ap­ply­ing for credit be­cause they hold suf­fi­cient in­ter­nal fund­ing,” he said.

“One in­ter­pre­ta­tion is that this sim­ply re­flects lim­ited fund­ing needs due to the na­ture of the ac­tiv­i­ties un­der­taken by th­ese firms.

“A pos­si­ble al­ter­na­tive in­ter­pre­ta­tion is the scar­ring ef­fects of the cri­sis has in­creased risk aver­sion in the busi­ness com­mu­nity, lim­it­ing the ap­petite to un­der­take riskier or more am­bi­tious in­vest­ment pro­grammes.”

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