finance 25
Grants for growth in all shapes and sizes
Gone are the days when banks and other funders handed over cash to businesses based on the most speculative of business plans – and most people agree that we’re unlikely to see another lending bubble anytime soon. Data from the British Bankers Association supports this view, confirming that bank lending in the South East has fallen significantly, as it has done in over 80% of UK postcode areas. But does this all mean that we have cause to grumble?
The honest opinion from many finance professionals is: “Not really, no…“ because we shouldn’t think of the lending bubble as having been sensible, sustainable or normal. Indeed, they say we’re probably closer to sensible, sustainable and normal now than we were at the height of excess a few years ago, with the ideal balance sitting somewhere between current practice and past highs.
Even in the current environment, sensible businesses with a sensible plan should still manage to access funding for growth. However, to do this successfully companies are finding they need to be better prepared, it’s no longer a simple process and that decisions can be made frustratingly slowly.
Stephen Mills
... we’re probably closer to sensible, sustainable and normal now than we were at the height of excess a few years ago ...
Businesses looking for funding need to be smarter and more proactive than they used to be ...
Business advisers Grant Thornton make the point that bank lending is not the only option for businesses looking for finance. Southampton Grant Thornton partner Stephen Mills says: “Raising finance can be a real barrier to growth for businesses, particularly for SMEs. What is often frustrating for a company is when it can see the opportunities but then struggles to access the cash to fund that growth in the same ways that it used to. Businesses looking for funding need to be smarter and more proactive than they used to be – and they need to have conversations with a wider audience.
“The reality is that there are many alternative types and providers of funding available. Businesses can make sure they are managing their working capital and consider trade or invoice finance to free up cash. Asset finance is still available and tends to be easier to access than cashflow loans. For established businesses there is always the option of raising a minority investment from a smaller private equity firm, most of which say they are struggling to find enough good opportunities to invest in. There is also a varied list of grant funding that some businesses can benefit from as well.“
The Solent Local Enterprise Partnership (LEP) is bringing a bevy of government funding to the region and has a number of schemes available to local businesses. Its Bridging the Gap fund in Hampshire has a total of £3.7
THE BUSINESS MAGAZINE – SOLENT & SOUTH CENTRAL – SEPTEMBER 2013
www.businessmag.co.uk
million specifically aimed at helping start-up businesses and SMEs to access finance.
Doug Morrison, chairman of the Solent LEP, said: “The Solent LEP is focused on helping local businesses to drive our economic recovery. Delivering grants and helping SMEs to access funding is a big part of the way we achieve that. Using our Bridging the Gap programme we have been able to increase investor confidence and help businesses to leverage additional funding from banks and other sources which otherwise may not have been forthcoming.“
Another service that businesses in the region should make use of is Growth Accelerator, the Government-backed programme set up to help ambitious companies to get access to finance and training grants to help them achieve their growth potential.
Guy Blackburn, who manages the Growth Accelerator programme across Hampshire and Dorset, said: “We’re here to help local business prepare for and get access to the funding that they need to grow. This is hard to do nowadays without first taking good advice and companies are finding they need to consider a much wider range of funders to secure the finance that they need. The Growth Accelerator programme is funded by the Government as part of its commitment to help local businesses to get the help and funding finance that they need to get ahead.
“Growth Accelerator runs free monthly funding clinics in Southampton. These are an ideal opportunity for businesses to plan their growth and discuss their funding requirements one to one with a local expert.“
Another programme bringing cash to Solent businesses is the Manufacturing Advisory Service (MAS). Funded by the Department for Business, Innovation and Skills, MAS provides manufacturing businesses with support to help them innovate, plan and grow.
Figures quoted from BBA’s ’Geographical Spread of SME Borrowing’, 23/07/13
http://www.bba.
org.uk/statistics/article/geographical-spread- of-sme-borrowing/small-business/
GrowthAccelerator is a partnership between leading private sector business growth experts Grant Thornton, Pera, Oxford Innovation, Winning Pitch and is backed by the Government.
Details:
www.grant-thornton.co.uk www.growthaccelerator.com www.mas.bis.gov.uk www.solentlep.org.uk
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