There are some fundamental flaws with the Micro Enterprise Loan Fund that is part of the Governments job creation “initiatives”. They say it will make up to €25,000 available for small businesses through a Micro Enterprise Loan Fund. While this sounds great and any initiative by the Government that might at last start to address the major unemployment crises in the city is welcome unfortunately there are real concerns about the way they propose to manage this fund.
It is adding new barriers to small businesses who want to expand their business by making them first apply to a bank and be rejected for a loan BEFORE they can apply to the fund. Small businesses do not have surplus resources to be filling out forms and engaging in bureaucracy and this requirement will only act as a deterrent to “would be” entrepreneurs and/or start-ups. It is directly opposite to supporting small businesses expand and survive.
The fund will charge 9% interest on any loans. By any standards this rate is punitive
A new government organisation is to be established to administer this fund . This is an unnecessary expense and duplication of effort. Why does the government not use one of the already established and recognised lending/support organisations e.g. the City & County Enterprise Boards and/or the banks funded by the tax payers to disburse the funds?
As a member of the Dublin City Enterprise Board I raised these concerns at our recent Board meeting and asked the CEO to raise them with the Department. I also emailed the Minister and asked him to address these issues and will post any reply I receive here.