DUBLIN WORST AFFECTED BY INSOLVENCIES

Company records show the rate of insolvencies has fallen for the third month in a row but the number of businesses shutting their doors for good is more than 25% higher this year than the same period in 2009. Dublin faced the biggest struggle for trade, accounting for 40% of all failures. There have been 652 insolvencies this year compared to 512 last year; with 263 coming in Dublin. The sectors worst affected were: construction (28 last month and 194 so far this year); hospitality (17 in May with 83 since the New Year); manufacturing (14 last month and 51 for the year); and motor and transport (10 in May with 32 for the year). High rents continue to cause problems for retailers, although, the car scrappage scheme is helping to sustain the motor industry.

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SEED CAPITAL COMPETITION

Irish entrepreneurs could get a huge cash boost for their businesses thanks to a prize fund of €280,000 being offered by InterTradeIreland’s 2010 All-Island Seedcorn Business Competition.  The competition is the largest in Ireland in terms of the prize fund available and in the past has helped give fledgling firms a ‘lift-off’. As well as offering fantastic cash incentives Seedcorn provides invaluable support and advice from some of the island’s top investment experts, and the competition mimics a real venture capital investment process.  Winners are selected in each category in each of the regions and will be asked to make their presentation again to a separate panel of judges at the final in Belfast on Tuesday 30 November 2010.  The panel will then select the overall all-island winner in each category.  More information is available at www.intertradeireland.com.

ACTIVITY RISES IN SERVICES SECTOR

Activity in Ireland’s services sector continued to rise in May but employment still remained weak, the latest NCB Purchasing Managers’ Index showed. The index rose to 52.4 during the month, remaining above the 50 mark that separates growth from contraction. The rise follows a reading of 51 in April, the first time activity increased in the sector in more than two years. The report noted that the only sector to post a decline in activity was transport and leisure, but this should be boosted by the weak euro in the coming months. However, whilst service sector employment remained below 50, at 46.8 this is in contrast to the manufacturing index, which saw employment rise in May.

CROSS BORDER R&D FUND ACCEPTING APPLICATIONS

InterTradeIreland is inviting applications to a cross-border innovation fund. Five grants worth up to €175,000 are up for grabs during the latest round of their INNOVA programme; the only all-island R&D scheme aimed at helping companies develop new products, processes or services. Funding is available for partnership projects involving businesses from Northern Ireland and the Republic, particularly smaller companies and first time innovators. As well as receiving a much needed financial fillip, successful applicants also benefit from ‘pooling their expertise and resources’ with another company, ensuring their innovative ideas are brought to market faster than if they were working alone.

GOOD NEWS FOR CASH FLOW CONCERNS

Two of Ireland’s largest independent invoice financing companies, Bibby Financial Services and Close Invoice Finance, recently unveiled separate funds totalling €150 million to help Irish small businesses free up credit without resorting to bank loans or overdrafts. Invoice financing allows companies to raise cash against their sales ledger, mitigating some of the cash flow problems that affect small businesses as payment terms get longer.

BANKS HELP SMEs MOVE TO BLACK

Allied Irish Banks will set up a new €500 million fund to increase the flow of credit to small businesses. The new fund, intended to increase the flow of credit to SMEs, is part of the bank’s plans following the governments €3.5 billion recapitalisation of AIB. Meanwhile, recent reports suggest that the current account balances of small and medium business customers at the two main banks are beginning to improve. More small firms are moving into the black in 2010 in comparison to last year, according to AIB and Bank of Ireland. This is a sign that businesses are beginning to experience the positive change in larger economic trends. Bank of Ireland confirmed recently that it has €1 billion in unused overdraft facilities among its customers. The reason for this is thought to be that small businesses were ‘still bobbing along the bottom’ and not keen to borrow for expansion yet.