3. www.francisclark.co.uk
Contents: Presenters and format
• Presentations (8.15am to 9am)
• Intro: Richard Wadman (5)
• Bank: Bruce Pedrick (12.5) (Lloyds)
• Non-bank: John Peters (12.5) (SWIG)
• Business Plan and “Alternative Finance”:
Richard Wadman (7.5)
• SME: Ben Treleaven (7.5) (ISO Spaces)
• Questions/discussion over breakfast (9am to
10am?)
1. What they look
for
2. Key
documents:
specific
comments
3. Why
applications
succeed or
fail?
4. Advice/ “Tips”
5. www.francisclark.co.uk
Your requirements (A)
Cash: amount and term?
Other e.g., expertise or contacts?
Business Finance Guide:
• Step out from your business
• Take a fresh look at prospects and challenges
• Analyse your opportunities
• Reach for the future (projections)
• Think about finance
8. www.francisclark.co.uk
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
9. www.francisclark.co.uk
The banks
Banks… still the major source of funds to SMEs
During the 1st Quarter 2014:
• The banks approved £5.5bn of new loan facilities and £1.3bn of new overdraft
facilities. Of this, £2.6bn of new loan and overdraft facilities were for smaller
businesses and £4.2bn were for medium businesses, an increase of 10%
compared with Q1 2013.
• March 2014 also saw the highest monthly level of approved borrowing since
November 2011.
https://www.bba.org.uk/wp-content/uploads/2014/05/BBA01-431558-v1-Bank_Support_For_SME_s_-_Q1_2014.pdf
Approval rates were:
• Smaller businesses – Loans
79%, Overdrafts 77%.
• Medium businesses – Loans
91%, Overdrafts 93%.
10. www.francisclark.co.uk
Banks: Government initiatives
• 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
Banks borrow from Bank of England at reduced interest rates if lend onto SMEs
• Assisted Asset Purchase
RGF funding used to increase deposit on HP or Loan
11. Preparing for a Bank Lending Request
Bruce Pedrick,
Relationship Director, Cornwall
12. Customers Facilities Deposits Colleagues
Devon &
Cornwall
16,800 £1.75bn £1.40bn 180
SUPPORTING BUSINESS IN CORNWALL AND DEVON
•Lloyds net lending rose 8% during 2013.
•560 businesses joined us from competitors during 2013.
•Our teams are closely involved with other avenues to funding and key
professional advisors
•Local Lending Decision Making to minimum £500K (often £1M)
13. C - Character
C - Capability
C - Capital
P - Purpose
A - Amount
R - Repayment
T - Term
S - Security
Basics of Lending
14. Why does you business exist (Your Purpose/Mission Statement)
Where do you want to take it (Your Objectives)
How will it get there (Your Strategy)
What will it cost (Your Budget)
Include reference to:
Staff/People
Competition
Customers/Suppliers
Marketing/Profile/Advisors
Premises
Sector specific market conditions/trends
Equipment required
USP – what makes me/us different
SWOT Analysis – Strengths, Weaknesses, Opportunities & Threats
Key Documents – Business Plan
15. Last 3 years Annual Accounts
Most up to date Management Accounts
Projected Cash Flow
Projected Profit & Loss
Projected Balance Sheet
Specialist eg Rent Roll for Property Investors
Rationale to support forecasts eg how you will increase the Gross Profit Margin
Personal ALIE (Assets/Liabilities/Income/Expenditure)
Key Documents - Financials
16. Fail to prepare, prepare to fail!?
Local Lending Discretion up to min £500K (£1M in many cases)
Approx 80% of Applications get Agreed and the remainder generally are
require more Information or restructuring
Robust Appeals process
Why Applications Fail
17. Prepare
Know Your Business
Speak to your advisors and the bank beforehand
Advice
For further information:
lloydsbankbusiness.com
18. SWIG Finance
South West Investment Group
www.swigfinance.co.uk
01872 223883
info@swigfinance.co.uk
20. …a CDFI
Community Development Finance Institutions
(CDFIs) lend money to businesses, social
enterprises and individuals who struggle to get
finance from high street banks and loan
companies. They offer loans and support at an
affordable rate to people who cannot access
credit elsewhere
‘
‘
www.swigfinance.co.uk
01872 223883
info@swigfinance.co.uk
22. • National Start Up Loans programme
• Start ups or trading less than 18 months
• Loans up to £9,900
• Larger amounts in exceptional cases
• Fully funded business support
www.swigstartups.co.uk
01872 227933
STARTING A
BUSINESS?
23. LOOKING TO GROW?
SWIG Business Growth Loans
• Viable Growth and Start Up Businesses
• Unable to secure traditional finance
• Commercial rates of interest
• Up to £100,000
24. How to Apply
• Complete online form at www.swigfinance.co.uk
• We shall respond in 48 hours
• If all OK, proceed to full application
• Complete form and submit business plan
• Assessment, interview and decision in c.2 weeks
25. 3 Golden Rules
1. Keep it simple (we’re more interested in your
customers than technical specifications)
2. Be transparent (but your best face on, not a mask –
we need to understand your background)
3. Know your numbers (and please explain them!)
26. Business Support
We are linked into a wide variety of business
support agencies and other sources of finance
Your Business Business support Business Growth
+ =
31. www.francisclark.co.uk
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
32. www.francisclark.co.uk
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
33. www.francisclark.co.uk
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
34. www.francisclark.co.uk
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’
35. www.francisclark.co.uk
Alternatives…
• Grants, debt and equity (3%)
• Asset backed lending
• “The crowd” - Rewards, Debt and
Equity
• http://www.brewdog.com/equityforpunks
• Supply Chain
• High Net Worth Individuals – EIS/
SEIS and Angel Co Fund
• “Access to finance” part of Small
Business, Enterprise and Employment
Bill
36. www.francisclark.co.uk
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/
39. www.francisclark.co.uk
Actions/ follow up: assistance
• Presenters
• Oxford Innovation, Get Set for Growth,
Growth Accelerator, Growth Vouchers
Developments
• http://www.francisclark.co.uk/news-views/blog/
Topics for future breakfasts?
• International Trade
• The share
• An entertaining discussion of “basic tax”
• Protecting the family business
• Equity for SMEs
• Crowdfunding
Future…
40. www.francisclark.co.uk
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Disclaimer & copyright
Editor's Notes
A warm welcome to the Alverton and to Lloyds Commercial 2014 ‘preparing fro Growth’ seminar. My name is Craig Varley on behalf of myself and the whole Commercial Team from Lloyds a thank you for investing your time and joining us today.
We hope we have built a program today that will thought provoking, informative and add value to an audience which contains some of THE HIGHEST GROWTH businesses in this part of Cornwall. I’ll share the contents of the program with you and I’ll also give you a little background on why we have tailored it in this way.
So why a ‘planning for growth’ seminar? Well Lloyds is very close to many businesses and quite simply todays topics are what you have asked us to talk about.
We have over 16,000 customers, supported by 180 colleagues across the Region. We have representation across a wide geographic area including – Exeter, Barnstaple, Plymouth and Truro and MANY of our clients are gearing up for or already seeing increased sales demand.
Lloyds bank has an impressive record in funding growth. The highly quoted SME net lending growth defined by customers with turnover less than £25M, shows that whilst net lending balances across the sector continued to shrink in 2013 (-3%), Lloyds SME net lending was up 6% in the same period with SME lending within Devon Cornwall up 5%. On a combined basis across both SME & MM businesses, our lending balances were up 8% across D&C.
We continue to have strong market share across region and we have seen over 500 business join us from competitors whilst helping over 7,000 start their new-business journey.
You’ll also see that our deposits and lending are well matched, which supports the Groups strong credit rating. LBG is a safe home for funds.
As you can see the Lloyds Banking Group’s Commercial Banking business in Devon and Cornwall is significant and our teams really do want to support local firms and the wider community.
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All you have to do…
Is to get in touch
You can find us online, on social media, or pick up the phone.
Thank you.
Your business case. Any business which has survived the last 5 years has a business case and this is what should be set out within your business plan. [Why invest in this business? We have recently been through this process and found that the best way to start you thinking about your business case is to consider your USP as this will open]
The business plan should answer the questions the reader would want to ask. The easiest way for this to be addressed is by tailoring your executive summary, making sure it gets your message across as it is the Executive Summary which will capture the interest of your reader. For example, if you are looking for funding for growth, set out how much you need, where it will be spent and why you are confident the growth can be achieved.
Although your business plan should be informative, avoid giving away too many of your trade secrets as it is this intellectual property which makes your business valuable.