Finance and Growth - Boost Business Lancashire

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SPECIAL FEATURE:
Finance and Growth
In association with:
Boost Business Lancashire is the most comprehensive support offer ever made to ambitious firms in the county.
Powered by the European Regional Development Fund (ERDF), Boost draws together key strands of finance,
support and expertise and aims to grow the county’s economy by £20m by 2015. Here, we take a closer look.
As confidence returns and businesses in the county seek to invest, their options for securing finance for growth
are opening up. Banks say they are open for business – the right kind of business. Meanwhile, alternative
opportunities, including crowdfunding are entering the mainstream. And then there is the support backed by
public funds. Here in Lancashire, we are well-served and ambitious businesses seeking to develop can access a
variety of programmes which offer grants, support and expertise.
County offers access
to funds for growth
The Lancashire Enterprise Partnership and Lancashire
County Council both recognise the value in helping
businesses to grow and prosper. Here Edwin Booth,
chair of the Lancashire Enterprise Partnership (LEP)
and Jennifer Mein, the leader of the county council
and board member of the LEP, share their thoughts
on the efforts being made to help Lancashire’s
businesses prosper.
I
f you have ambitions to grow your
business, we’re keen to partner with you
in your pursuit of success. We want to help
give people the tools and vision to create
employment and wealth in Lancashire.
The county council and the enterprise
partnership have crucial roles in
coordinating the county’s economic
priorities. We’re focusing on opportunities
that maximise job creation and growth,
and whose benefits reach out to best effect
across the county.
Edwin Booth
We are committed to focusing our
limited resource and finance on those
Lancashire businesses that are working
to create meaningful employment
opportunities and wealth within Lancashire,
thereby creating maximum value for
people in Lancashire.
To help create the right foundation for
growth, it’s important for businesses to have
access to the right finance at the right time.
Jennifer Mein
Almost half of business owners who
responded to the recent Lancashire Growth Forecast 2014, conducted
by Boost Business Lancashire, said that raising finance is one of the
biggest barriers to growth in 2014.
But there are in fact many options to bring in the new funding to
support your growth aspirations. It’s important to do your research
before approaching funders. Not all forms of finance are suitable for
every type of business. Going to the most suitable provider also saves
you time and money.
This Lancashire Business View feature includes some great
examples of how finance is helping businesses in Lancashire, along
with various finance options.
For people who aren’t sure of their best options, Boost Business
Lancashire can help companies which are looking for business support.
It’s the county’s largest ever business support programme aimed
at growth-hungry businesses. It’s a new £7.2m Lancashire Business
Growth Hub, developed by the LEP and the county council.
For more details visit lancashirelep.co.uk
Boost: Get with the programme!
G
rowing businesses require funding for
all sorts of reasons, whether from banks,
venture capitalists, business angels, or other
lenders.
But it’s not just traditional finance that
can give businesses the resources they
need to grow. There’s also a plethora of
business support programmes that can help
businesses achieve their growth aspirations.
Even if your business doesn’t need finance
just now, by seeking external support you can
position yourselves more favourably, ready
for when the time comes to finance your
growth ambition.
This was a key factor behind the launch
in 2013 of Boost Business Lancashire, the
county’s £7.2m business growth hub which
provides access to a range of free and partfunded growth programmes for ambitious,
growth-hungry businesses.
Andy Walker, head of business growth
and innovation at the County Council, says:
“By focusing support on businesses with
high-growth potential, Boost aims to grow
Lancashire’s economy by £20m, create at least
1,200 jobs and safeguard 700 more by 2015.
“Whether it’s improving leadership skills,
boosting innovation, business development,
HR skills, creating export opportunities, or
providing access to finance, Boost can help
businesses achieve growth.”
Backed by the European Regional
Development Fund (ERDF), Boost offers
access to a range of services, including:
• G
rowth mentoring by Community and
Business Partners: providing high growth
mentoring support
• L ancashire Forum: leadership peer-to-peer
networking and development programme
run by Lancaster University.
• L ancashire LEAP: led by Winning Pitch
and Regenerate Pennine Lancashire,
providing advice to pre-start and early
start businesses.
• U CLan’s Innovation Clinic: supporting
advanced manufacturing and engineering
companies to develop new products and
markets.
• W
inning Pitch’s GrowthAccelerator; helping
businesses to commercialise innovation,
improve business development, access
finance and develop leadership skills.
• G
rowth Sectors Support: Specialist
practical support in the creative and
digital, environmental, advanced
manufacturing, aerospace and finance
sectors to accelerate business growth.
• G
rowth Skills Assist: Designed to help
over 400 key individuals in Lancashire’s
businesses gain new leadership,
management and operational skills.
boostbusinesslancashire.co.uk
0800 488 0057
Boost case study 1
Boost case study 2
Business: Ultimaker Location: Chorley
Business: 3D Printer supplier
Business: Risk Intel Location: Blackpool
Business: Credit checking
C
V
horley-based Ultimaker (GB) Ltd
has sold 500 of its ‘affordable and
accessible’ 3D printers in the UK and
taken on two new staff since being set
up last year by directors Paul Croft
and Alex Mayor.
The firm, which has already enjoyed
success in the engineering, design
and architecture sectors, recently
launched a groundbreaking initiative
Alex Mayor and
to promote the advanced technology
Paul Croft
in UK schools.
The company’s rapid growth has already seen it receive
specialist HR mentoring support from Community and Business
Partners through Boost. Funding from Boost’s sector support
programme will help the company with further innovation and
growth – it has qualified for part-funding to take part in the
Design Council’s Design Leadership Programme.
The business is hoping to hit sales of 10,000 units in Great
Britain over the next three years and create up to 20 jobs.
Paul Croft, director of Ultimaker, says: “3D printing is having an
enormous impact on design and manufacturing in the UK. There is
huge interest in our product because it is making the technology
more affordable and accessible to businesses and organisations of
all sizes – we’re taking 3D printing to the masses.”
Ed Matthews-Gentle, from Creative Lancashire, who has been
working with Ultimaker, said: “The future of manufacturing relies
on innovating through new products. 3D printing can potentially
make complex parts more cheaply and could revitalise many
manufacturing sectors. Ultimaker is a business with enormous
growth potential and the support we are providing will allow it to
go from strength to strength.”
ito Cinardi set up Risk Intel, a
credit checking service, after
recognising that an increase in ID
fraud means that many businesses
can reduce risk and losses by
running various verification checks.
The company can perform driving
licence, criminal record and
qualification checks, amongst others,
to help businesses of all kinds avoid
unwelcome surprises.
Vito Cinardi
To help start the business, Vito
accessed free support through a start-up programme delivered
by Regenerate Pennine Lancashire and Winning Pitch, as part
of Boost.
Vito was able to access several free workshops on sales and
business development techniques, and worked alongside several
mentors who were able to help Vito gain a greater understanding
of how he could grow his business.
On completion of the workshops, Vito also received a £5,000
growth voucher which will contribute towards the cost of a
new website with automated features to help aid management
processes. As a result, Vito hopes to create five or more roles at
the company in the next year.
He says: “The support has helped us look at funding aspects and
development strategies that in turn gave us a clear direction rather
than a scatter-gun approach. The whole experience gave me a
great insight into how and where the business should be heading.
“I’d recommend any business, whether new start or
established, to contact Boost and get with the programme.”
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FINANCE AND GROWTH
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Access to Finance opens doors to new investment opportunities
L
ancashire is blessed with a comprehensive SME ‘funding
escalator’ for businesses at all stages of development, from startups to established companies ranging from £2.5k to £10m.
The Access to Finance service, funded by Lancashire County
Council, employs advisors with a wealth of SME funding experience
gained as accountants, finance directors, venture capitalists, asset
based lenders and senior commercial banking personnel. They offer
an impartial and independent review of the funding options available
to SMEs. The service can then identify and introduce businesses to
appropriate funders, supporting the process of application - and it is
free to access for qualifying businesses.
Once at the investment-ready stage, there is a range of funding
opportunities available. These have been driven by a number of
factors including the banks reducing SME lending and technologydriven emerging funding platforms such as Seedrs, Crowdcube and
Funding Store.
There has also been a strong regional response to a lack of venture
capital availability for funding requirements of up to £2m investment
with the North West Fund.
Other initiatives include national schemes like the
GrowthAccelerator programme and the local Rosebud Business
Solutions that is aiming to generate more higher-value businesses
and jobs for the future economy in Lancashire.
Or there is the Dragons’ Den route – getting a business angel
involved in funding and advising the business. The North West
Business Angels run regular pitch events across Lancashire for
businesses to meet and pitch to investors looking to put their money
and expertise into a company they think will do well in the future.
There has been a real boom in angel investment in the past year,
with the number of experienced business angels in the North West
jumping by 200 per cent as banks remain cautious and investors look
elsewhere for a return on their money.
For more information visit boostbusinesslancashire.co.uk
Ark embarks on international sales marathon with
Funding Circle investment
A
rk Consultants is an outdoor and
adventure running equipment
specialist based in Lancaster.
Managing director Tom Williams, who
trained as a materials scientist, had a brief
spell in the city before realising his dream
of running a business which is purely
focused on his passion for the outdoors.
He says it started as a young boy. His
father ran a remand centre which backed
onto Ilkley Moor and he spent a lot of time
on the orienteering course.
“Once you get that sense of adventure,
that sense of freedom, when your body is
pumping and your mind is working, even at
a young age, you’re caught,” he said.
Today the business arranges the famous
OMM marathon series and designs
outdoor clothing and equipment under the
OMM brand.
The OMM is ‘the original mountain
marathon’ set up in 1968. The event focuses
on self-sufficiency which means those
who take part need equipment which is
lightweight, flexible and durable.
Having spent the last four years building
up his business in the UK, Tom decided
last year that it was time to think about
expansion and distribution to the rest of
the world.
He borrowed £80,000 from more than
700 British investors through Funding
Circle, the online marketplace for business
loans, which directly links investors with
small businesses looking for finance. The loan was part-funded by Lancashire
County Council which is investing through
the platform to local businesses to help boost
business lending.
Ark applied online in under 30 minutes
and the loan was obtained within two
weeks. Since then, Ark has been able to
go to major trade shows in Europe and are
working with distributors that will take it
into the Far East. The Japanese market is
also already starting to explode.
For more information visit
fundingcircle.com/businesses
Funding crowd sows Fresh sources of funding for growth
Seedrs and reaps
business growth
A2F
O
ften, it’s just a little money that’s needed
to seed an idea and turn it into a
fledgling business.
Depending on the nature of the business,
this seed capital might allow an entrepreneur
to build a viable product, make a key hire, buy
equipment, lease space or acquire inventory.
Many entrepreneurs start with savings and
‘bootstrap’ their business but for those who
can’t, their options can be limited: banks
don’t lend to early, high risk businesses and
business angels need to see traction before
they commit investment. This funding gap
often holds back businesses.
This is what makes alternatives like equity
crowdfunding so appealing. It makes it
possible for start-up enterprises to raise
money from friends, family and other
investors online, in exchange for equity.
One of Europe’s leading equity
crowdfunding platforms, Seedrs, is
authorised and regulated by the Financial
Conduct Authority (FCA) and enables
investments from just £10.
Alysia Wanczyk of Seedrs said: “Put simply,
for entrepreneurs with a great business
proposition, equity crowdfunding is a great
way to get their company off the ground while
giving investors a share in their success.”
Seedrs is just breaking into Lancashire now
and it is hoped successes seen elsewhere will
be repeated here.
Liverpool-based Maxim Product Solutions,
for example, raised £25,000 investment
through Seedrs in 2013 to begin developing
moulds for low-cost, reusable, returnable
corrugated packaging and closures.
In just over a month, the business raised
investment from 66 people throughout the
UK from investors who invested between £10
and £5,000.
And it isn’t just individual investors who
are seeing the potential in crowdfunding
innovative new businesses.
Lancashire County Council has become
the first UK council to set aside capital, of
£10,000, to invest across Lancashire-based
businesses alongside crowd investors.
Alysia added: “This is a really interesting
way to support local business growth as well
as seeking to make a return on taxpayer
investment. With the support and investment
of the crowd - which includes individuals and
government - there’s a great new opportunity
to close the early-stage funding gap.”
For more information visit seedrs.com
The Access to Finance NW service
provides free, impartial help and support
to small and medium sized businesses in
the North West that are seeking to raise
finance. The service is individually tailored
to the specific needs of the business,
delivered by a team of industry specialists.
a2fnw.co.uk Lancashire County Council’s Rosebud Fund
has a large and flexible range of products
investing from £50,000 to over £1 million.
If you are ambitious and seeking funding
for growing your business, we can provide
both loans and equity based financial
solutions. lancashire.gov.uk/rosebud Fuse Fund is a £4m enterprise programme
designed to support businesses trading
less than three years. It helps young
businesses to finance growth projects
creating new jobs and investment
across Lancashire. It is a private-public
partnership between Lancashire Business
View and Regenerate Pennine Lancashire,
powered by the Regional Growth Fund.
regeneratepl.co.uk/regenerateservices/fuse/apply-for-fuse/
Boost Business Lancashire (Boost) is the
£7.2m ERDF-backed Lancashire Business
Growth Hub led by the LEP. Boost helps
growth-hungry businesses realise their
potential by providing simple access
to a range of leading-edge funded
programmes, delivered by specialists with
a track record of supporting growth - of
both start-ups and established businesses.
boostbusinesslancashire.co.uk
The North West Fund is a £155m evergreen
investment fund established to provide
debt and equity funding to small and
medium-sized enterprises in the North
West of England. The Fund will address
an identified gap in the lending, venture
capital and private equity markets.
thenorthwestfund.co.uk
Accelerating Business Growth (ABG) is a
competitive grant scheme to fund business
growth projects across Lancashire which
commit to significant job creation, additional
investment from other sources, and major
impact on the Lancashire economy.
Businesses supported through ABG must
commit to the creation of sustainable private
sector jobs in the short-term. regeneratepl.
co.uk/regenerate-services/acceleratingbusiness-growth-rgf/
Growth Sectors Support is delivered by
a team of experienced business advisors
who can help you review your business
needs and opportunities, and access
support to achieve your growth potential.
The free, tailored support will help you
develop your ideas and consider new
directions. Expertise can also be leveraged
externally from the private sector or from
the region’s universities and colleges.
regeneratepl.co.uk/regenerateservices/sector-specific-support/
The Fast Forward Funding course is a
three-day intensive training programme
delivered by industry professionals,
enterprise academics and successful
entrepreneurs. It is specifically designed to
provide you with the knowledge and tools
to ensure that your business has the best
chances of success, when seeking finance
and funding solutions. On completion
of the course all attendees will be given
an opportunity to meet and promote
their business to investors. The course is
suitable for businesses seeking funding of
up to £500k. fastforwardfunding.co.uk.
GrowthAccelerator’s network of world-class
growth experts work side by side with
leaders of high-growth potential SMEs to
provide them with the know-how and ability
to achieve sustainable growth. The service
will help discover the real issues that
could be holding businesses back, define
the right growth plan and open doors to
world class business experts and networks.
To be eligible, businesses need to be
registered in England with fewer than 250
employees and a turnover of less than £40m.
growthaccelerator.com
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FINANCE AND GROWTH
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Finance opportunities open with growth back on agenda
We courted the views of experts across the county to gauge their thoughts on new and traditional funding sources
and operating in a growth environment.
Here’s what they said:
Jim Akrill, PM+M
John Jones, Beever and Struthers
Crowd funding is still relatively
new but it is growing in popularity.
Businesses can access up to £100,000
in unsecured lending via Funding
Circle, but you do need to have a good
track record of financial performance
to pass the initial screening tests.
It’s never been more important to
ensure that business has the right
funding structure, but of course there’s
no one-size-fits-all solution and access
to equity funding is always going to be
problematic for smaller businesses.
However, the application process is
fairly simple. It is also possible to raise
equity this way and a growing number
of deals have been done through
Crowd Cube.
Cliff Maylor,
North West Business Finance
In the coming months The North
West Fund will be launching a new
sub-fund, specifically tailored to
smaller investments. The North
West Fund for micro loans will offer
businesses in the region the option
of finance starting from £25,000 up to
£50,000.
The micro-finance will support
growing businesses looking for
smaller investments to drive their
growth plans and is part of The North
West Fund’s on-going recognition of
the changing needs and demands of
the region’s businesses.
The North West Fund for Business
has been busy investing and often
working alongside the banks to fill
the funding gap. Of course they can’t
back every proposition, but more than
£50m has been invested in around 200
businesses to date and there is a real
drive to invest.
Diane Earles,
Chartered Institute of Marketing
UK businesses are heading into
2014 armed with aggressive growth
ambitions, with 50 per cent of
businesses stating that growth now
dominates the management agenda in
their organisation, according to a major
study of marketing professionals.
Since the inception of our study,
the trend of increasing optimism
from businesses is promising. It is
highly encouraging to see increasing
business confidence over the past 12
months translating into an appetite for
innovation, investment and job creation.
Ian Hardman, Yorkshire Bank
Recent research found that onethird of the region’s SMEs plan to
recruit new staff in 2014. The research
from Yorkshire Bank also showed that
SMEs which seek out advice on how
to drive business growth were more
likely to see a significant financial
benefit which would allow them to
further expand.
Daniel Milnes, Forbes Solicitors
As well as the more traditional types
of debt funding including asset based
financing, increasing numbers of
businesses are considering alternative
sources of investment whether by way
of loans or equity.
If growth is going to put greater
demands on employees then
employers need to make sure that
their contracts are flexible enough to
cope with this as well as making sure
that the necessary training is available
to enable staff to perform at a higher
level when required.
Jo Fulthorpe,
Hyndburn Enterprise Trust
Hyndburn Enterprise Trust has
another £2.2m to lend to business
start-ups in 2014 for those less than
12 months old. We can lend through
the Government’s Start Up Loan fund
up to £25,000 per business. These
can be used for a variety of reasons
including capital expenditure and
funds required for rent.
Helen Broughton, Danbro
The numbers for both temporary
and permanent job opportunities
are on the up and the IMF has now
increased its growth forecast to 2.4 per
cent which would make the UK fastest
growing economy in Europe.
This is excellent news for
Lancashire businesses. We will benefit
from greater opportunity and fantastic
regional growth and support networks
– and hopefully better access to
lending as a side-effect.
Banking on relationships to fund business growth
M
ichael Burrow would like to shout it
from the roof tops: his bank is open
for business.
The regional director of NatWest
business banking in the North is keen to
respond to the all too common refrain that
banks are not helping companies as they
emerge slowly from recession and look for
finance to grow.
Michael Burrow
However, it would seem Michael and his
colleagues in the sector have a lot more
shouting to do if they are to get their message across to a doubting
audience. There are indications that disillusioned businesses are
turning their backs on the banks. The Federation of Small Businesses’
(FSB) research for the final quarter of 2013 showed fewer firms
approached banks for finance – though on the upside more of those
that did apply were approved.
FSB national chairman John Allen says: “The underlying issue
remains that small firms have lost trust in their bank and much more
needs to be done to repair the damage.”
He believes a crucial element in rebuilding that trust is for the
banks to “repair” their communication with small business customers
and have a relationship with them, not just when they’re applying for
finance, but as they develop and grow.
It’s an approach that Michael Burrow says is already happening. He
stresses his bank has a strong appetite for lending and one of the best
ways to demonstrate its commitment to supporting new enterprises
and SMEs is by getting close to customers.
He adds: “For us, our biggest challenge is to increase our lending,
and in so doing help our customers achieve their ambitions and thrive.
“It is important that we spend more time with our customers,
making sure we understand their business and give them the
confidence to invest for growth.
“We do have to shout louder that we are open for business. For us,
we are more focused than ever on working closely with our customers
and supporting them in achieving their ambitions.”
Last year NatWest unveiled a £150m leisure fund to support
businesses from across the industry. Due to its success the total fund
amount doubled by the end of the year.
NatWest has also ensured its relationship managers are well
equipped to meet the needs of their customers. More than 90 per
cent of relationship managers across the country are accredited by
Chartered Banker.
Chris Wardle, is corporate banking manager of Svenska
Handelsbanken in Winckley Square, Preston. His is one of around
170 branches the Swedish bank has in the UK. Chris says that taking
a traditional approach is working – both for his bank and for their
business customers; decentralisation is also a plus point when it
comes to decision-making.
He says: “In terms of banks assisting with funding businesses our
approach to traditional banking with local, prudent decisions has
resulted in an increase in business lending of 13 per cent in 2013.
“This success has been attributed to local branch teams who hold
the full power to provide advice, decisions and service.”