At a recent conference held by ESRI and the Department of Finance on 26th September 2014, it was highlighted that Irish SMEs are reliant on banks as their main source of external finance. This makes SMEs vulnerable to credit restrictions and hinders their growth. So what other alternatives are out there for SMEs? This blog post reviews trade finance and its suitability for fuelling SMEs.

What is trade finance?

Trade finance basically provides the company with the money to pay suppliers and purchase goods. In this way, the SME has access to more turnover financial resources and growth in the business. Finance is provided on a trade basis, not on open account as provided by many banks.

What are the advantages of trade finance over bank loans and equity?

There are two main advantages of trade finance over other forms of SME financing. Firstly, it is easily accessible because the approval process is a lot shorter than the banks. Secondly, the interest rates are low and repayments flexible. Finance is in the form of debt, therefore SME’s do not have to forgo expensive equity in order to grow. Trade finance does not cover all business types as there are restrictions to the types of goods it can be used to purchase.

What type of businesses does trade finance cater for?

Trade finance may exclude some businesses, such as perishable goods, fashion items and services. Therefore, it is only if your business trades in non-perishable goods that trade finance will be an option.

Where and how do I get trade finance?

There are a number of trade finance companies in Ireland, but your best option will be to speak to a financial advisor before making a decision. The financial advisor will be able to evaluate your situation and determine what type and amount of trade finance will be best fit for your operation.

For more information go to:  

www.cashflowplus.ie

Many thanks to IPS Financial Advice - Head office for providing us with tis useful link for SME's and Family businesses

One of the strongest themes to emerge from our Family Business Survey this year was the priority family firms are giving to professionalisating their operations. Part of this relates to governance and processes, but it’s also about the type of people family businesses need to recruit to deal with the challenges of digital technology, a more disruptive economic environment, and a far more globalised world.

Family firms are not alone in this... 

Click here to read more:

http://pwc.blogs.com/ceoinsights/2014/12/a-sense-of-belonging-learning-from-the-family-firm.html

A recent survey of 154 middle-market business owners conducted by PwC finds that only 27 percent of them reported having a substantial and documented succession plan

Click here to read more:

http://www.forbes.com/sites/russalanprince/2015/01/21/most-middle-market-family-businesses-need-a-succession-plan/

Even the world’s richest man needs a mentor.

Bill Gates created software that runs in most computers on the planet, and then became a billionaire philanthropist giving away more than $28 billion and working to eradicate polio.

So why would he need a mentor? Here’s why.

Click here to read more:

http://blog.geteverwise.com/famous-mentors-and-proteges-bill-gates-warren-buffett

Business owners who manage to sell their company after a long – and some may say torturous – process will experience both financial and psychological flashpoints. They often describe the emotional moment when years of work transform into sizeable gains, leaving them rich in terms of investment opportunities, but perhaps void of the social clout they once enjoyed.

But they also worry about the impact that sudden wealth will have on their children. It's Known as the inheritor's dilemma 

Click here to read more: 

http://www.theglobeandmail.com/report-on-business/small-business/sb-managing/succession-planning/inheritors-dilemma-an-obstacle-for-family-business-succession/article22412814/

Taking over the family business can be challenging for the next generation.

Mason Revelette from Forbes.com provides us with some steps that he has learned over the years that may make the process easier.

To read more click here:

http://www.forbes.com/sites/theyec/2015/01/07/3-steps-to-take-over-the-family-business/ 

Small and medium-sized firms (SMEs) could create 60,000 jobs next year, lobby group ISME said yesterday.

Almost a third of firms plan to take on staff. "It is possible that a net 60,000 jobs can be created in the SME sector in 2015,"

Click here to Read more:

http://www.independent.ie/business/small-business/small-firms-to-create-60000-jobs-in-2015-30872796.html

Corporate governance refers to the set of systems, principles and processes by which a company is governed. They provide the guidelines as to how the company can be directed or controlled such that it can fulfil its goals and objectives in a manner that adds to the value of the company and is also beneficial for all stakeholders in the long term.

Benefits: Corporate governance is known to be one of the criteria that foreign institutional investors are increasingly depending on when deciding on which companies to invest in.

It is known to have a positive influence on the share price of the company. 

It could also make it easier for companies to source capital at more reasonable costs (Thomson, 2009)

http://articles.economictimes.indiatimes.com/2009-01-18/news/28462497_1_corporate-governance-satyam-books-fraud-by-satyam-founder 

Many people (and many family businesses even) are under the impression that governance in family business is a contradiction in terms. KPMG have an interesting article in relation to family business and Corporate Governance. Click here to read more:

http://www.kpmgfamilybusiness.com/corporate-governance-vs-family-business-meeting-in-the-middle/

Situation: a CEO has hired an individual who is currently working on projects for the company. The CEO likes this person and anticipates that he could eventually become General Manager. There have been a few rough spots but, overall, objectives are being met. How do you bring in a new General Manager?   

The advice is given from CEOs.

Click here to read the full article detailing four recommendations that help bringing in a General Manager to be more successful.  

 http://ceo2ceos.com/2014/12/how-do-you-bring-in-a-general-manager/

MORE than half of Irish SMEs believe that their businesses are now in better financial shape that they were before the economic crisis, while 87pc are positive about the outlook for the country's economy in the year ahead.

Click here to read more http://www.independent.ie/business/small-business/latest-news/more-than-half-of-irish-smes-in-better-shape-than-before-downturn-30594718.html