NI Small Business Loan Fund says yes when banks say no

The government invests £5m towards small business lending through Invest Northern Ireland. This agency created the NI Small Business Loan Fund as a way to capitalise micro enterprises that have limited access to other sources of funding, including commercial loans.

Will shaky finances cause a denial?

The purpose of the loan is to provide money to small businesses that are unlikely to be funded by banks and commercial lenders. In fact, companies that have access to normal capital streams are typically denied their requests through the NI Small Business Loan Fund.

Some successful applications will be from businesses that received loans in the past but have been unable to receive additional financing. Other applications will be shut out of small business lending altogether.

What the Fund does is to provide greater access to capital to the small businesses that are the future of the Northern Ireland economy. Since most small businesses fail, additional support is provided by Invest Northern Ireland to ensure solvency of the Fund.

How much can be borrowed?

Loan amounts range from £1,000 to £50,000 for businesses that are approved. Existing businesses may borrow up to the upper limit.

Start up businesses are limited to borrowing up to £15,000. Performance goals and other success measurements will determine if the business may subsequently apply for additional loans up to the maximum cumulative limit of £15,000.

Can loans be used for salaries?

Salaries that are a part of day-to-day operational costs can be paid from loan proceeds. Other approved costs include marketing, rent, leasehold improvements, equipment, software and sales costs. Any loan applications that are focused primarily on paying a salary to a single owner are likely to be scrutinised more heavily by reviewers.

Some business types will not be allowed, including some industrial categories. Farm loans are excluded, as there are other programmes or alternative sources of financing that are better suited for this purpose.

How to apply

Enquiries may be submitted through the NI Small Business Loan Fund website. For individual questions, potential applicants may call 0800 988 2879.

It may be advisable to ask individual questions and ask for tips prior to commencing with the actual loan request. This could prevent future confusion or requests for changes to the business plan, all of which could cause a denial or prolong the approval process.