With SMEs reporting restricted access to finance and a shortage of skilled labour among their primary challenges, Gerry Byrne looks at the state agencies filling the gaps

Until a few years ago, one could be forgiven for thinking the odds were stacked against small companies when it came to state support for businesses.

Now one could equally be forgiven for thinking the odds have swung completely the other way, such is the range of government and local authority support for smaller enterprises.

Not only are there more grants, there is even an agency, Credit Review, to fight your corner if a bank refuses you a loan.

In fact, Credit Review is a good place to start a discussion of state aids for small enterprises, because the predicament of many of its clients mirrors the difficulties faced by most fledgling businesses.

Many loan applications are refused because micro-business owners don’t fill out the paperwork properly or their accounts are not up to date.

While larger firms may have professionally trained staff to handle such applications, small entrepreneurs often have too many balls in the air to dedicate themselves fully to such new tasks.

Credit Review boasts that, of the cases it takes on, 80% of loan refusals are reversed.

Lack of security is, however, usually an insurmountable obstacle for small businesses seeking loans, but Credit Review often then refers clients to one of two sister state agencies.

One is Microfinance Ireland (MI), which can loan up to €50,000 without security.

The other is Strategic Banking Corporation Ireland’s credit guarantee scheme, which can underwrite loans from your bank worth millions.

Des McCarthy, MI chief executive, says: “We lend to businesses in hospitality, food, manufacturing, construction and trades, retail and services to name but a few.”

Microfinance is restricted to funding micro-enterprises employing less than ten people and with a maximum turnover of €2m.

Not your FTSE 100 by any means, but still a vital sector of the economy deserving of support.

McCarthy is on record as estimating that it contributes to the creation of hundreds of new jobs annually.

“From our perspective, the Local Enterprise Offices should be the first port of call for microenterprises seeking funding,” he says.

“Our data shows that applications submitted through the LEOs have a higher approval rate.

“They also provide ongoing support for applicants through the provision of their mentoring service, which is free of charge to our clients if their loan is approved.”

Strategic Banking Corporation Ireland (SBCI) is the big daddy of all the state funding schemes.

Established to solve a credit shortfall following the banking crisis, it provides funds and also credit guarantees via a variety of banking partners and financiers at rates which are often very competitive.

In its recently published annual report, June Butler, its chief executive, said that because both the local and the global economy faced headwinds last year, the role of the SBCI came to the fore.

“We provide opportunities for Irish businesses to invest and grow, creating additional economic activity across Ireland, by providing low-cost finance through established and newly emerging finance providers.

“We operate in a flexible way, which means that our role in supporting access to finance can adapt to the prevailing economic circumstances, and we stand ready to do what is needed throughout the economic cycle.”

The SBCI has channelled over €4bn in low-cost, flexible funding to over 60,000 Irish SMEs so far.

Interestingly, according to a recent national survey conducted by the SBCI, 59% of SMEs polled highlighted a lack of skilled workers as one of the biggest risks to their business in Ireland.

By comparison, only 44% identified access to finance as a problem.

All of this shows the strategic position of another public body, Solas, in triggering targeted education and training to meet critical business needs.

Solas is the state agency responsible for Further Education and Training (FET) in Ireland.

It manages programmes such as apprenticeships. Additional training programmes offered include Skills to Advance, eCollege and others funded by the European Globalisation Fund.

Not only does Solas identify skills shortages, it also designs appropriate training programmes in partnership with industry bodies to train workers to fill them.

One of its techniques is the design of what it calls micro-qualifications in various industry and service sectors.

They are provided via Education and Training Boards nationwide. For example, the Digital Skills Microqualifications enable businesses and employees to expand the application of digital technologies at little or no cost.

Its two modules are to a recognised awards-level standard. Microqualification courses (also known as micro-credentials) are affordable because they are often subsidised to between 50-80% of their cost.

Further training needs are identified by a network of Regional Skills Forums which supports businesses assess, developing and validating skills for their employees.

Dublin Regional Skills is one such forum which covers Dublin City and County. Education and training programmes are offered through local universities and colleges and are backed by statutory agencies such as the Department of Social Protection and Enterprise Ireland, and industry associations like Dublin Chamber and Ibec.

It has strong links to sectors such as hospitality, logistics and transport, construction, retail and pharma.

Photo: Des McCarthy, Microfinance Ireland chief executive