Finance in Cornwall 2014 Segment 3

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Slides from Segment 3 of Francis Clark's Finance in Cornwall 2014 seminar held on 13th May in Newquay.

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Finance in Cornwall 2014 Segment 3

  1. 1. Scott Bentley - Partner Finance in Cornwall 2014 Confidence returns…
  2. 2. 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)
  3. 3. www.francisclark.co.uk Of general interest • Banks • “Alternatives”, inc Crowdcube • Asset Finance • Business Support x 4 • Business planning and projections • Company presentation • Networking
  4. 4. Richard Wadman – Corporate Finance Director Banks… and alternatives
  5. 5. 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
  6. 6. www.francisclark.co.uk 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)
  7. 7. www.francisclark.co.uk 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
  8. 8. www.francisclark.co.uk 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
  9. 9. 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/
  10. 10. www.francisclark.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
  11. 11. Asset Finance Ian Hughes Corporate Manager
  12. 12. www.francisclark.co.uk Asset Based Lending What? • Debt secured on asset/ assets Assets?
  13. 13. www.francisclark.co.uk 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
  14. 14. www.francisclark.co.uk 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 C O M P E T I T I O N
  15. 15. 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 9LF Tel: 01872 272900 www.ignitioncredit.co.uk Paul Caunter Director
  16. 16. 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: gandbfinance@btconnect.com A Cornish company supporting local Cornish businesses by arranging and providing funding for asset purchases
  17. 17. www.francisclark.co.uk 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
  18. 18. Michael Wilkinson
  19. 19.  “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
  20. 20.  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
  21. 21. The solution
  22. 22. Success so far £24 millionfunded so far… £250,000 largest single investment >70,000 members 120+ £1.9 millionbiggest deal £2,800 average investment Successfully funded deals £180,000 average deal Stage of Growth By Category
  23. 23. Growth Source: Beauhurst, UK Equity Investment Review 2013, February 2013 UK’s ‘Most Active Seed Investor’ in 2013 Beauhurst 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 £2.2m £12.2 + 562% Funded Deals 22 54 + 145% Average Investment (per investor) £1,800 £2,800 + 56%
  24. 24. Case studies
  25. 25. 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
  26. 26. Michael Wilkinson Investment Manager Michael@crowdcube.com @MW_Crowdcube www.crowdcube.com
  27. 27. Grow Cornwall Programme Alan Street
  28. 28. Established business for 20+ years Spun out from the Oxford Trust Focus on SME’s Access to Finance Access to Facilities Access to Experience and Support Delivered over 15,000 coaching days to more than 3,000 UK businesses Oxford Innovation © Oxford Innovation 2014
  29. 29. Cornwall Wales Northumberland UK wide via Growth Accelerator Middle East & Africa Current Operations © Oxford Innovation 2014
  30. 30. Transformational change in business performance Increase wealth of local economy Measured through GVA and employment Legacy is important Focus on learning – coaching vs tell Grow Cornwall – Key Aims © Oxford Innovation 2014
  31. 31. Grow Cornwall - Offer © Oxford Innovation 2014 Up to 30 days of fully funded coaching / mentoring
  32. 32. Strategy Exit Planning Coaching Sales and Marketing Grow Cornwall Finance Leadership Vision & Values Operations © Oxford Innovation 2014
  33. 33. Grow Cornwall – Compelling Differences © Oxford Innovation 2014 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
  34. 34. Grow Cornwall – Key Benefits © Oxford Innovation 2014 Critical friend Challenge to achieve more Speed Avoid costly mistakes ** Learning **
  35. 35. Who is eligible? © Oxford Innovation 2014 Key sectors Existing and Start-Ups Robust Business Model Ambition and Potential for growth Generate graduate calibre employment Enrich the Cornish economy
  36. 36. Some examples © Oxford Innovation 2014 Sellectronics – client since June 2011 Increased sales by 3 x and headcount by 11 Spiral Construction – client since Jan 2010 Ridden recession, now market leader in UK Radix Communications – client since June 2011 Increased sales by 4x and headcount by 7
  37. 37. Ignite 2014 © Oxford Innovation 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
  38. 38. Summary © Oxford Innovation 2014 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
  39. 39. © Oxford Innovation 2014 Learn More: www.growcornwall.co.uk www.ignitecornwall.com Thank you for your time
  40. 40. Colin Piper
  41. 41. 41 Presentation title - edit in the Master slide Exporting for Growth Colin Piper – International Trade Advisor
  42. 42. 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 2013 42 Foreign & Commonwealth Office Dept for Business, Innovation & Skills
  43. 43. 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) UKTI Presentation Finance for Cornwall May 2013 43
  44. 44. 44 Eligibility UK 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 funding Discuss with an International Trade Adviser or check full eligibility criteria on the UKTI website, www.gov.uk/ukti UKTI Presentation Finance for Cornwall May 2013 44
  45. 45. 45 How to contact UK Trade & Investment For 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 international@uktisouthwest.org.uk www.gov.uk/ukti 0300 123 1046 Call
  46. 46. MANUFACTURING ADVISORY SERVICE (MAS) Clive Turner Finance Cornwall event Newquay 13th May 2014
  47. 47. CONTENTS • MAS Core Services. Funded support • Product Development Centre. Funded support • Offshore Wind. Funded Support
  48. 48. 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)
  49. 49. 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 year 1st Project – up to 50% subsidy 2nd Project – up to 40% subsidy 3rd Project – up to 30% subsidy
  50. 50. MAS SUPPORT SUMMARY
  51. 51. 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
  52. 52. 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
  53. 53. 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
  54. 54. 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/
  55. 55. 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
  56. 56. 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
  57. 57. HOW TO CONTACT US • National Helpline Number • 0845 658 9600 • Website • www.mymas.org • Twitter @mymas_mfg Clive TurnerE: clive.turner@mymas.org M: 07964 114541 Martyn Pearson martyn.pearson@mymas.org M: 07989 993897
  58. 58. Plymouth University Supporting businesses to grow Mark Smith
  59. 59. 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.
  60. 60. 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
  61. 61. Creating Business Environments Innovation Centres: spaces to accelerate growth Formation Zones: where great ideas start
  62. 62. Driving Innovation Knowledge Transfer Partnerships & graduate internships
  63. 63. 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
  64. 64. The Growth, Acceleration & Investment Network A 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
  65. 65. Business Plans and Financial Projections Richard Wadman – Corporate Finance Director
  66. 66. www.francisclark.co.uk “Business Plan” • Business case • Tailor to audience • Informing v giving away IP
  67. 67. 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
  68. 68. 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
  69. 69. 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
  70. 70. 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’
  71. 71. www.francisclark.co.uk 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/
  72. 72. What Could the Future Hold for Cornwall ? Toby Parkins - @tobyparkins Founder and Director of UKNetWeb, Headforwards & Agile on the Beach President Cornwall Chamber Technical Director of various startups #FCFinanceCornwall
  73. 73. What Could the Future Hold for Cornwall ? Background UKNetWeb – 15yrs Websites through to Ambitious technical Cloud Apps Headforwards – 3yrs Currently contracted to NTT, 38 staff #FCFinanceCornwall
  74. 74. What Could the Future Hold for Cornwall ? Cornwall’s Geographical Location 3-5hrs from London Or 16 milliseconds #FCFinanceCornwall
  75. 75. What Could the Future Hold for Cornwall ? Tech Futures Tech Start Ups – fast growing, dynamic, extremely high growth Transformational projects for existing companies #FCFinanceCornwall
  76. 76. What Could the Future Hold for Cornwall ? We need: Better communication of grants Improved grant delivery More SEIS enabled investments Investor networks Tech innovation clubs A First Tuesday event Closer industry education course collaboration #FCFinanceCornwall
  77. 77. Thank you Toby Parkins @tobyparkins
  78. 78. F Finance in the Cornwall 2014 As business confidence returns… Scott Bentley- Partner
  79. 79. www.francisclark.co.uk 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
  80. 80. www.francisclark.co.uk Presenters and other participants …and more
  81. 81. www.francisclark.co.uk But before you go…
  82. 82. www.francisclark.co.uk 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
  83. 83. www.francisclark.co.uk (c) copyright Francis Clark LLP, 2014 You shall not copy, make available, retransmit, reproduce, sell, disseminate, separate, licence, distribute, store electronically, publish, broadcast or otherwise circulate either within your business or for public or commercial purposes any of (or any part of) these materials and / or any services provided by Francis Clark LLP in any format whatsoever unless you have obtained prior written consent from Francis Clark LLP to do so and entered into a licence. To the maximum extent permitted by applicable law Francis Clark LLP excludes all representations, warranties and conditions (including, without limitation, the conditions implied by law) in respect of these materials and /or any services provided by Francis Clark LLP. These materials and /or any services provided by Francis Clark LLP are designed solely for the benefit of delegates of Francis Clark LLP. The content of these materials and / or any services provided by Francis Clark LLP does not constitute advice and whilst Francis Clark LLP endeavours to ensure that the materials and / or any services provided by Francis Clark LLP are correct, we do not warrant the completeness or accuracy of the materials and /or any services provided by Francis Clark LLP; nor do we commit to ensuring that these materials and / or any services provided by Francis Clark LLP are up-to-date or error or omission-free. Where indicated, these materials are subject to Crown copyright protection. Re-use of any such Crown copyright-protected material is subject to current law and related regulations on the re-use of Crown copyright extracts in England and Wales. These materials and / or any services provided by Francis Clark LLP are subject to our terms and conditions of business as amended from time to time, a copy of which is available on request. Our liability is limited and to the maximum extent permitted under applicable law Francis Clark LLP will not be liable for any direct, indirect or consequential loss or damage arising in connection with these materials and / or any services provided by Francis Clark LLP, whether arising in tort, contract, or otherwise, including, without limitation, any loss of profit, contracts, business, goodwill, data, income or revenue. Please note however, that our liability for fraud, for death or personal injury caused by our negligence, or for any other liability is not excluded or limited. Disclaimer & copyright

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