Finance in Cornwall 2014 Segment 3

Scott Bentley - Partner

Finance in Cornwall 2014

Confidence returns…

www.francisclark.co.uk

Structure of morning

• Background and Grants intro (8.30am to 9.35am)

• SME, LEP, Cornwall EU millions and the ‘funding gap’

• Grant schemes (Overview)• Video from Matthew Hancock (Minister for

Skills and Enterprise)

• Grants, debt, equity and business support – stratified by size* (9.55 am to 11.00 am)

• Banks, alternative sources of finance and business support (11.20 am to 12.25pm)

• Q&A one to one / Networking (12.25pm to 1.45pm)


Of general interest

• Banks

• “Alternatives”, inc Crowdcube

• Asset Finance

• Business Support x 4

• Business planning and projections

• Company presentation

• Networking

Richard Wadman – Corporate Finance Director

Banks… and alternatives


The banks…

• “Bank of England data showed that lending to companies of all sizes fell in the three months to February on a year earlier despite calls by chancellor George Osborne for businesses to boost growth by investing more.” (Guardian – 22 April 2014)

• “the finance gap could be between c£84bn and c£191bn over the next five years” (Boosting Finance Options for Business, March 2012).

Bank of England: trends in lending April 2014


The banks

Banks… still the major source of funds to SMEs

• Total SME bank borrowing stood at £114.9bn (FT article: 21 December 2013) (http://www.ft.com/cms/s/0/4d3a0830-3738-11e3-9603-00144feab7de.html)

• Big names: Lloyds, Barclays, Nat West/RBS, HSBC, Santander, Clydesdale, Handlesbaken, Co-op – not homogenous offering…

• Recent experiences/ issues: serviceability, sector, level of deposit/ loan to value, sales pipeline, presentation?

• New entrants e.g.,

Shawbrook (£50m lent to Westcountry businesses)


Government stimulation and ideas

• Enterprise Finance Guarantee Scheme

Underwriting part of bank lending to SME

• Project Merlin: targets for Banks to lend

Under Target for lending to small business by > £1bn

• National Loan Guarantee Scheme:

Government guarantees used to reduce interest rates (to bank which they pass onto business)

• Funding for Lending

• Green Investment Bank - http://www.greeninvestmentbank.com/

• British Business Bank

• Assisted Asset Purchase


Funding for Lending

• Banks borrow Bank of England (using business loans and mortgages as security)

Reduces interests rate which Bank borrows at

More a Bank lends, more they can borrow, lower fees on borrowing

• Impact on SME

Lower interest rates on Loans (1% discount?)

Bank incentivised to lend?

http://www.francisclark.co.uk/blog/general/funding-for-lending-scheme-fls-supersedes-nlgs-in-quest-to-reduce-cost-of-borrowing-for




British Business Bank

• £300m investment programme launched in April 2013 (part of £1bn allocated in 2012 Autumn Statement)

• The first £45m of Business Bank funds will be put into SME specialist

lenders Praesidian Capital Europe (£30m) and BMS Finance (£15m), helping them offer a total of approximately £125m in new lending” (6 November 2013)

• The British Business Bank programme confirmed today that it is making

a new £40m to support further lending to smaller businesses through peer-to-peer lender Funding Circle (25 February 2014).

• The British Business Bank has today published new guidelines for its Enterprise Capital Funds

(‘ECF’) programme that include a doubling of the maximum potential commitment it can make to new ECFs to £50m (28 April 2014).

• Business Bank currently run directly by BIS (until?)• http://british-business-bank.co.uk/


Alternatives…

• Grants, debt and equity (3%) – from sources presented on…

• Asset backed lending

• “The crowd” -http://www.brewdog.com/equityforpunks

• Bond Market

• Supply Chain

• High Net Worth Individuals – EIS/ SEIS and Angel Co Fund

http://www.brewdog.com/equityforpunks

http://www.google.co.uk/url?sa=i&rct=j&q=crowdcube+logo&source=images&cd=&cad=rja&docid=_fz5KHw9NdFMOM&tbnid=UeQoK2Ja5oz8GM:&ved=0CAUQjRw&url=http://blog.designcrowd.com.au/article/319/20-uk-startup-logos&ei=FgJHUYSpKsGn0AX2hYDYDg&bvm=bv.43828540,d.d2k&psig=AFQjCNEyH4-vOakVKKhZP_atz9XLlbRJoA&ust=1363694380212750

Asset Finance

Ian HughesCorporate Manager


Asset Based LendingWhat?

• Debt secured on asset/ assets

Assets?


Asset Based Lending

•Why?

•“Quick and Easy”

•Cash flow management/ release cash flow (refinance)

•Fixed Rate and Fixed Term (excl Invoice Financing)

•“Grows with the business” – CID etc


Asset Based Lending

•Where from?

•Main Banks

•Non-banks: direct or via broker: “Investec, Aldemore, Close, Asset Advantage, Credit Asset Management, Arkle, Armada, Bibby, United Trust, Siemens, Liberty, D & D, Corporate Asset Solutions, State Securities, CIT, Platform Black, Tinderbox, Eastern Credit, Market Invoice and many more”

•Local

COMPETITION

Local Flexible Underwriting:We don’t operate a computer driven credit acceptance process, nor lengthy interviews & application forms. We look at each deal individually, ensuring we match the asset & the customer with the best possible finance package available to them.

Marketing Leading Rates:Having funding partnerships with large financial institutions as well as our own Funds means we can offer excellent competitive rates, whilst keeping other credit lines open for alternative uses within the business.

Assets & Sectors:We can finance most types of assets, which include, cars, commercial vehicles, plant & machinery, catering & refrigeration, office refurbishments & IT.

Finance Products:Hire Purchase - Lease Purchase - Personal Contract Purchase - Finance Lease - Operating Lease – Refinance - Commercial Loan & Chattels Mortgage.

In 2013 we helped over 1,500 customers with their finance requirements, big or small, lending over £32m.

Ignition Asset Finance

Sterling House Green Court Truro Business Park Threemilestone Truro Cornwall TR4 9LFTel: 01872 272900

www.ignitioncredit.co.uk

Paul Caunter Director

Swift response:We strive to be able to complete and deliver deals in the most timely fashion.

Two Key Sectors:1. We act as a brokerage where we are able to source and arrange and acquire funding on a more competitive rate

2. We have our our own lending book where we are able to look at deals that may not fit the main stream finance companies who are unable to support

Every deal reviewed as a whole on its individual merits

G & B Finance

G & B Finance (SW) Ltd The Old Granary Malpas Road Truro Cornwall TR1 1QH Tel: 01872 225050 Email: [email protected]

A Cornish company supporting local Cornish businesses by arranging and providing funding for asset purchases


Asset Based Lending

•What to think about

•Need (match?)

•Rates

•PG’s

•Term of lend (ability to repay)

•Terms e.g. debtor concentration etc

•End Ownership

Michael Wilkinson

“Q1 2013 showed the lowest ever level of use of external finance by SME’s” – SME Finance Monitor, Aug ‘13

“Access to finance is a “major barrier” to growth for more than one in five small companies” – FT, Mar ’12

“Less than one in five SME’s have attempted to raise finance in the last year – with 40 per cent of applications rejected” – RealBusiness, Sept ‘13

The problem

Crowdcube is the world’s first and leading equity crowdfunding platform giving entrepreneurs a new way to raise investment

Fully authorised and regulated by the Financial Conduct Authority

The solution

The solution

Success so far

£24 millionfunded so far…

£250,000largest single investment

>70,000members

120+£1.9 million

biggest deal

£2,800average investment

Successfully funded deals

£180,000average deal

Stage of Growth

By Category

Growth

Source: Beauhurst, UK Equity Investment Review 2013, February 2013

UK’s ‘Most Active Seed Investor’ in 2013Beauhurst report stated Crowdcube has “dominated the UK equity crowdfunding marketing since launch and was responsible for 70% of crowdfunded deals in 2013.”

2012 2013 Growth

Investment Raised

£2.2m £12.2 + 562%

Funded Deals 22 54 + 145%

Average Investment (per investor)

£1,800 £2,800 + 56%

Case studies

What are the benefits?

New way to raise

finance

UK wide investor reach

Easier to promote

Cost effective

Marketing effect

Crowd feedback

Financial return

‘Armchair Dragon’

Support friends and family

Participation

Lower/spread risk

Simple to invest

Michael WilkinsonInvestment Manager

[email protected]@MW_Crowdcube

www.crowdcube.com

Grow Cornwall ProgrammeAlan Street

Established business for 20+ years

Spun out from the Oxford Trust

Focus on SME’sAccess to FinanceAccess to FacilitiesAccess to Experience and Support

Delivered over 15,000 coaching days to more than 3,000 UK businesses

Oxford Innovation

© Oxford Innovation 2014

Cornwall

Wales

Northumberland

UK wide via Growth Accelerator

Middle East & Africa

Current Operations


Transformational change in business performance

Increase wealth of local economyMeasured through GVA and employment

Legacy is importantFocus on learning – coaching vs tell

Grow Cornwall – Key Aims


Grow Cornwall - Offer


Up to 30 days of fully funded coaching / mentoring

StrategyExit Planning

Coaching

Sales and Marketing

Grow Cornwall

Finance

LeadershipVision & Values

Operations


Grow Cornwall – Compelling Differences


Unrivalled team of business professionals / coaches

Business Diagnostic – GrowthMapper

Start-Up Induction workshop – Greenhouse

Monitoring KPI’s – co.pilot

Agile Innovation methodologies

Director Peer groups

Business Start-Up Competition - IGNITE

Grow Cornwall – Key Benefits


Critical friend

Challenge to achieve more

Speed

Avoid costly mistakes

** Learning **

Who is eligible?


Key sectors

Existing and Start-Ups

Robust Business Model

Ambition and Potential for growth

Generate graduate calibre employment

Enrich the Cornish economy

Some examples


Sellectronics – client since June 2011Increased sales by 3 x and headcount by 11

Spiral Construction – client since Jan 2010Ridden recession, now market leader in UK

Radix Communications – client since June 2011Increased sales by 4x and headcount by 7

Ignite 2014


A business Start-Up competition

Prize fund worth more than £100K.

Open to pre- and early start businesses based in Cornwall and IoS

Must have been trading for less than 12 months on 16 September 2013

More information and register interest:

www.ignitecornwall.com

http://www.ignitecornwall.com/

Summary


Trusted, efficient and experienced in the successful delivery of coaching programmes

Quality team with extensive commercial experience and wide ranging networks

Commitment to differentiated delivery models and methodologies


Learn More:www.growcornwall.co.uk

www.ignitecornwall.com

Thank you for your time

http://www.growcornwall.co.uk/

http://www.ignitecornwall.com/

Colin Piper

41 Presentation title - edit in the Master slide

Exporting for GrowthColin Piper – International Trade Advisor

UK Trade & Investment (UKTI)

‘‘Making the difference for businesses and the economy by helping clinch the deal for British companies overseas and high value foreign investors in the UK.’’

British Embassies and Diplomatic offices based in over 100 markets, with 2,400 UKTI staff that offer local, in-market knowledge and expertise

UKTI Presentation Finance for Cornwall May 201342

Foreign & Commonwealth Office

Dept for Business, Innovation & Skills

43

Support to.....Develop an export strategy – Passport to Export (£1,000), Gateway to Global

Growth

Undertake market research (including identifying potential partners) – EMRS (50% match), OMIS (subsidised)

Visit & develop new export markets – (£200-£850 when part of a group visit)

Improve international communications: website, email, languages & culture – ECR (subsidised)

Exhibit overseas – (£1,250 to £2,500 when part of an organised group)

Carry other marketing and sales development activities - European funding (ERDF) (£1,000 to £30,000)


44

EligibilityUK based business

Small and Medium Size Enterprise (SME)no more than 250 employees

an annual turnover not exceeding €50m, or an annual balance sheet total not exceeding €43m.

fulfil ownership rules

Different eligibility for European fundingDiscuss with an International Trade Adviser or check full eligibility criteria on the UKTI website, www.gov.uk/ukti


45

How to contact UK Trade & InvestmentFor help, advice and access to UKTI support programmes

Open doors to new opportunities

Help from the International Trade Centre

Access to UKTI advisers and Support programmes

[email protected]

www.gov.uk/ukti 0300 123 1046

Call

mailto:[email protected]

http://www.gov.uk/ukti

MANUFACTURING ADVISORY SERVICE (MAS)

Clive Turner

Finance Cornwall event

Newquay

13th May 2014

CONTENTS

• MAS Core Services. Funded support

• Product Development Centre. Funded support

• Offshore Wind. Funded Support

MAS CORE SERVICES

ANY MANUFACTURER...ANY SIZE

• On site review to help identify needs / barriers to growth (No charge)

• Agree action plan (No charge)

• Help source support required (No charge)

• Provide matched funding for that support where appropriate (No charge)

MAS GRANT SUPPORT

49

• Up to £3,000 available for each company

• 50% matched by the company ( i.e. You pay £3000 we pay £3000 )

• Grants awarded during or following the on site review

• Grants are measured against return on investment based on business growth opportunities

• Simple application form, completed and approved by your local advisor – turnaround time within a week

• Repeat Projects in any financial year1st Project – up to 50% subsidy2nd Project – up to 40% subsidy3rd Project – up to 30% subsidy

MAS SUPPORT SUMMARY

NON - ELIGIBLE PROJECTS

• Capital purchases

• Sales lead generation, identifying selling agents (UK & Overseas)

• Advertising, PR, Marketing materials, Logos & Branding, Brand Management

• Intellectual property fees

• Open training courses, NVQ courses

• Anything that is a statutory requirement

• Preparing annual accounts, Tax and VAT consultancy

Every case decided on its merits

PRODUCT DEVELOPMENT CENTRE

• Support to develop new and existing products

• Up to 2 days of free support from our dedicated team of experts advisors

• Grants to support 40% of external costs (average £4k) associated with your product development

• Access to an exclusive ‘Knowledge Hub’, for linking with specialist expertise within universities, colleges and research centres

GROW: OFFSHORE WIND

THE OFFSHORE WIND OPPORTUNITY

• Manufacturing opportunity estimated to be up to £15bn UK market value

• A potential £50bn annual global export market with opportunities in Asia, Europe and the US

• A rapidly expanding industry that will create an estimated 30,000 jobs by 2021

• Scope to develop IP that is transferable to other renewable energy sectors

GROW: OFFSHORE WIND

Funding available for:

• Tangible assets: such as purchasing additional land, new buildings, plant, machinery and equipment

• Intangible assets: for example, securing patent rights and licenses

• Employment costs: investment needed to meet wage costs resulting directly from an offshore wind investment project[1]

• Access up to 30 per cent of project costs, with a maximum total programme funding cap of £500,000.[2]

[1] Note: All funding must meet European Commission funding criteria. Applicants will be supported by their GROW:OffshoreWind advisor to understand relevant criteria.[2] For SMEs in a limited number of European Commission designated Assisted Areas there is scope to fund up to 50 per cent of eligible project costs.

http://www.growoffshorewind.com/

http://www.growoffshorewind.com/

YOUR CALL TO ACTION

If you are a Manufacturer, or have Manufacturing Clients and have not worked with us before,

TALK TO US

If you have previously had our support, you may find there is a lot more now available, so please

TALK TO US AGAIN

SUPPORTING MANUFACTURING IN THE SOUTH WEST

Supporting Manufacturing in the South West

Opportunity to find out what support is available and how to get it, and it’s

free.

NEXT EVENT

Plymouth 1st July 2014

HOW TO CONTACT US

• National Helpline Number

• 0845 658 9600

• Website

• www.mymas.org

• Twitter @mymas_mfg

Clive TurnerE: [email protected]

M: 07964 114541

Martyn Pearson [email protected] M: 07989 993897

http://www.mymas.org/




Plymouth UniversitySupporting businesses to grow

Mark Smith

Our mission

• To be the enterprise university.• How do we do this?

– - build and sustain connections with local, national and international partners to enrich our academic experience.

– - raise aspiration amongst groups under-represented in higher education

– - provide opportunities for our students, staff and the communities we serve through economic development, social inclusion, community outreach and strategic partnerships.

Our tools:

• Expertise & knowledge• over 800 academics and technical specialists across

a wide range of disciplines• World class facilities

• Specialist facilities like Coast, coupled with a range of ISO accredited labs

• Partnerships & Resources• 18 Partner colleges across the South West• Over 30,000 Students,

• plus graduates & Alumni

Creating Business Environments

Innovation Centres:

spaces to accelerate growth

Formation Zones:

where great ideas start

Driving Innovation

Knowledge Transfer Partnerships & graduate internships

Helping Achieve Goals

Unlocking Potential: a joined-up service, delivered by the University in partnership with Cornwall College

Supports both business owners and Graduates in realising their goals through:

• Making Connections • Finding Talent• Developing Businesses

The Growth, Acceleration & Investment NetworkA community of support providers that brings into one place everything and everyone that a business needs to grow:

- supports people with ideas, businesses that want to grow, and investors;

- joins up physical assets ensuring they are more than the sum of the parts;

- connects universities and colleges, innovation centres and science parks, centres of expertise and research with the region’s business base; and

- adds value to existing networks and projects

Business Plans and Financial Projections

Richard Wadman – Corporate Finance Director


“Business Plan”

• Business case

• Tailor to audience

• Informing v giving away IP


Structure of a business plan

• Front cover

• Contents

• Executive summary

• Background to the business

• Products and services

• Customers and markets

• Business operation

• Management

• Financial history

• Financial projections

• Appendices


Projections: the perfect scenario

• Monthly integrated profit and loss, cashflow and balance sheet covering a period of three years

• Documented assumptions

• Ability to sensitize the model


Projections: the real world!

• Choose an approach that works for the business

• Focus on the KPIs of the business

• Make basic assumptions

• Compare to actual results


Common issues

• Inconsistencies between Business Plan (narrative) and Projections (figures)

• Profit ≠ cash

• Do not forget about tax (VAT and tax on profits)

• Match funding to cash requirements, business model & exit strategy

• Read through documents ‘cold’


Growth Vouchers

Launched end of January 2014

50% subsidy up to £2k for advice on:

• Managing cashflow, late payments and negotiating finance

• Developing skills and taking on staff

• Improving Leadership and Management

• Marketing, attracting and keeping customers

• Making the most of digital technology

• www.gov.uk/government/collections/growth-vouchers-programme

• https://marketplace.enterprisenation.com/

http://www.gov.uk/government/collections/growth-vouchers-programme

https://marketplace.enterprisenation.com/

https://marketplace.enterprisenation.com/

What Could the Future Hold for Cornwall ?

Toby Parkins - @tobyparkinsFounder and Director of UKNetWeb, Headforwards & Agile on the BeachPresident Cornwall ChamberTechnical Director of various startups

#FCFinanceCornwall


Background

UKNetWeb – 15yrs Websites through to Ambitious technical Cloud AppsHeadforwards – 3yrs Currently contracted to NTT, 38 staff

#FCFinanceCornwall


Cornwall’s Geographical Location

3-5hrs from London

Or

16 milliseconds

#FCFinanceCornwall


Tech Futures

Tech Start Ups – fast growing, dynamic, extremely high growth

Transformational projects for existing companies

#FCFinanceCornwall


We need:

Better communication of grantsImproved grant deliveryMore SEIS enabled investmentsInvestor networksTech innovation clubsA First Tuesday eventCloser industry education course collaboration

#FCFinanceCornwall

Thank you

Toby Parkins@tobyparkins

FFinance in theCornwall 2014

As business confidence returns…

Scott Bentley- Partner


Summary

• SMEs – the country and county needs you

• Cornwall a great place to do business

• Some great businesses in Cornwall

• Confidence?

• Funding and support – options

• Thank you


Presenters and other participants

…and more

http://www.google.co.uk/url?sa=i&rct=j&q=crowdcube+logo&source=images&cd=&cad=rja&docid=_fz5KHw9NdFMOM&tbnid=UeQoK2Ja5oz8GM:&ved=0CAUQjRw&url=http://blog.designcrowd.com.au/article/319/20-uk-startup-logos&ei=FgJHUYSpKsGn0AX2hYDYDg&bvm=bv.43828540,d.d2k&psig=AFQjCNEyH4-vOakVKKhZP_atz9XLlbRJoA&ust=1363694380212750


But before you go…


The ROC 5K

Tuesday 10th June 2014 5.30pm for 6pm Lemon Quay in Truro

Last date for Early Bird entry is Friday 23rd May 2014

www.roc-uk.og/ROC5K

Twitter: @roc_uk #ROC5K Facebook: roc.uk.org


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Finance in Cornwall 2014 Segment 3

Economy & Finance

Transcript of Finance in Cornwall 2014 Segment 3