Francis Clark is delighted to present our 9th annual Finance in Cornwall event, which has become an integral part of ‘Cornwall Business Week’. The event looks to bring together people representing the funding and support streams potentially available to SMEs. Therefore, the event is of great relevance to Business Owners and Managers looking to find the best finance options available for their business and the support on offer to help them achieve their aims. This year's event includes presentations from the big banks as well as the "alternative" finance providers. There will also be a number of organisations contracted to provide business support; including the providers of the Growth Hub and an update on 'European Funding'.

1. Finance in Cornwall 2016
Scott Bentley - Partner
“Cornwall, we
have lift off!”

2. pkf-francisclark.co.uk
Administration
Admin
Timetable
Format
Presenters…

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Presentations and other participants..
And more… (30 presentations in total, covering “full range” of funding and business support options)

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• Follow us on twitter @francisclarkllp
• Tweet about this event using #FCFinanceinCornwall
Twitter

5. Francis Clark..

6. International Network
• We were with Leading Edge Alliance
• Changed to PKF network

7. pkf-francisclark.co.uk
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Structure of morning
• Background, EU “calls”, grants and Banks
(8:30am to 9:50am)
• LEP, Cornwall Chamber, FSB
• Grants and Banks (intro)
• Funding and Business Support – stratified by
age of business (10:10am to 11:20am)
• Equity, Business Support and Company
presentations (11:40am to 1pm)
• State Aid
• Crowdcube pitch..
• Q&A one to one/ Networking (1pm to 2pm)

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Scene setting – UK and overseas
“Triple-whammy of disappointing news [for UK economy]”
• Services sector grew at slowest pace in 3 years in April
• Manufacturing activity contracted in April for the first time in 3 years
• Construction activity grew at its slowest pace for nearly 3 years
IMF: World economy 'too slow for too long'

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Scene setting - Cornwall
Cornwall & Isles of Scilly Growth
Programme €603,706,863…

10. Sandra Rothwell
Chief Executive of C&IoS LEP

11. SME Funding:
An Update
For Finance in Cornwall 2016
Kim Conchie
Chief Executive
10th may 2016

12. Access to finance:- UK Stats:
• In 2015 total lending (loans and overdrafts) to businesses fell by £10 million, this
compares to a contraction of £12.4 billion in 2014. (Source: Bank of England)
• In 2015 total lending (loans and overdrafts) to SMEs rose by £2 billion, this compares to a
contraction of £3.8 billion over the same period in 2014. (Source: Bank of England)
• 2015 as a whole, total lending (loans and overdrafts) to large businesses fell by £2 billion, this
compares to a contraction of £8.6 billion in 2014. (Source: Bank of England)
• Discouraged demand is the main barrier to making an application with 43% of would-be loan
seekers stating that this was the main reason for not applying. (Source: SME Finance Monitor)
• 85% of SME accounts sit within the ‘big four’ high street banks.
BCC comments: Trust is back, more competition to be encouraged, ease capital limits for
alternative lenders including Building Societies, more support needed for BBB, establish regional
and sectoral retail bond markets

13. Businesses and access to finance (Source: SME Finance Monitor)
• 37% of SMEs in 2015 were using external finance, in line with 2014 (also 37%) but remaining
lower than in previous years (44% in 2012).
• 8 in 10 of all loan/overdraft applications in the 18 months to Q4 2015 (and reported to date)
resulted in a facility. This overall success rate has increased steadily over time (from 69% of all
applications reported for the 18 months to Q4 2012).
• An increasing proportion of SMEs hold more than £10,000 and most said that these credit
balances reduced their need for external finance. Over time, such SMEs have become less
likely to use external finance at all (from 51% in 2012 to 44% in 2015).
• In H2 2015, 41% of SMEs were aware of alternative funding, compared to 22% in the first half
of 2014
• Use of this form of finance remained limited (1%). Consideration has increased from 7% to
12% (H1 14 to H2 15).

14. Business Banking Insight Survey
(http://www.businessbankinginsight.co.uk/)
• Business Banking Insight (BBI) is an independent website which looks at how well the UK’s
small and medium-sized businesses are being served by banks and other finance providers.
• The site publicly showcases the experiences of more than 20,000 businesses and how they
rate their banks and finance providers. It shows how they rate their banks and finance
providers, with a view to enhancing trust and transparency between the groups.
• BBI is run by the BCC and FSB and supported by a range of stakeholders from the banking
sector (RBS, Barclays, Lloyds and HSBC) and Whitehall.

15. Meanwhile in Cornwall & Isles of Scilly…
A Mixed Picture
• Orders up by 3%; but export orders down by 6% (Referendum?)
• Cashflow 20% down; but turnover and profit each up by 10%
• 10% increase in investment plans and lower pressure on prices; but 15% operating
below capacity.
• Cornwall Lenders’ Forum (CLF) seen as paradigm across England, building bridges
and trust
• Banks and alternative lenders getting same messages from local marketplace

16. Meanwhile in Cornwall & Isles of Scilly…
• Lenders giving businesses through CLF consistent messages
• Business confidence in turnover and profit still variable (Source PFA Research QES Analysis)
• CIoS is a paragon of lenders and businesses working together for the greater good
of the region
• CLF vital component as Devolution unfolds

17. Thank You
kimconchie@cornwallchamber.co.uk
A British Chamber of Commerce accredited Chamber of Commerce

18. Ann Vandermeulen
Development Manager
Federation of Small
Businesses
Cornwall Region

27. Grant funding
David Armstrong – Corporate Finance Director

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Structure
• The basics
• Which grant is most appropriate for me?
• A selection of schemes
• Disclaimer – not a complete list!

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The basics
• What is a grant?
• An offer of funding receivable upon the achievement of
certain targets
• No interest or repayment unless….
• No equity
• Tend not to be retrospective

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Some recent successes
• £12m raised
• 20 companies
• 700+ new jobs

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Which grant is for me?
• Common misconception
• Eligibility
• Commercial reality:
• How does it fit in with my business plan?

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• South West Growth Fund
• BIG2
• Leader
• European Maritime Fisheries Fund:
• Investment in fishing vessels, portside infrastructure and
aquaculture
• €33m fund open until 2020
• https://www.gov.uk/topic/commercial-fishing-fisheries/funding
Capital expenditure job creation

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Research & development
• Variety of sources
• Innovate UK
• https://www.gov.uk/government/organisations/innovate-uk
• £561m for the year 2016 to 2017
• Funding to test the feasibility of your idea, research and
develop it and prototypes
• R&D Tax Credits

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Cornwall & Isles of Scilly Growth Programme
• European Programme 2014-2020
• Funding aligned to the European Structural & Investment Funds
Strategy
• Administered via around “calls”:
 Funding available to develop workspace
 Low Carbon: Call in Cornwall and Isles of Scilly
• More detail - http://www.erdfconvergence.org.uk/growth-
programme/erdf
• Transparency & clarity

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Workspace Funding
• Aimed at SME Owner / Occupiers
• New build / extensions
• High quality direct jobs
• Open calls – 6 monthly window – 27 May 2016
• Minimum grant of £250k
• More detail - http://www.erdfconvergence.org.uk/growth-
programme/erdf

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Keeping up to date
• http://www.francisclark.co.uk/services/grant-advisory/
• Finance in Cornwall Factsheet
• Bi-monthly funding newsletter
David Armstrong
David.Armstrong@pkf-francisclark.co.uk
07810 056164
Richard Wadman
Richard.Wadman@pkf-francisclark.co.uk
07854 763049

37. Final thought
pkf-francisclark.co.uk
Although Cornwall is considered the most lucrative grant
county, during 2015 we secured more grant funding for
businesses across Devon & Somerset than in Cornwall.
Is your business missing out?

38. LEADER
Jon Teague
Cornwall Development Company

39. Liaison among Actors in Rural Economic Development
Typically up to a maximum of £35,000
40-50% towards project costs depending on priority

40. Rural Development
Programme 2014-2020
European LocalNational
Countryside Stewardship
€3.875bn
(£3.1bn)
Countryside Productivity
€176m
(£141m)
Growth Programme
€221m
(£177m)
LEADER
€172.5m
(£138m)
Rural Development
Programme for England
£6m for Cornwall
delivered through 4
Local Action Groups
Local Action Groups are made of
volunteers from the private
sector, public
sector and voluntary &
community sector
Cornwall Development
Company acts as Accountable
Body for Local Action Groups

41. boost rural tourism
increase farm productivity
increase forestry productivity
provide rural services
provide cultural and heritage activities
LEADER funding priorities:
support micro and small businesses and farm diversification

42. Timescale:
The whole application
process will take
between 4 - 7 months
3. Complete and submit
your Full Application
for appraisal and
decision by the LAG
2. Complete and submit
an Outline Application
to confirm eligibility
and receive feedback
from the LAG
1. Contact the relevant
LAG Project
Coordinator for your
area
How to access LEADER funding:

43. www.localactioncornwall.co.uk
Pick up a flyer from the foyer and talk to a co-ordinator
Liz Gilbert
Project Co-ordinator
Tel: 01872 324445
Mob: 07973 813803
liz.gilbert@cornwall
developmentcompany.co.uk
Caroline Hanlan
Project Co-ordinator
Tel: 01872 326750
Mob: 07484 011512
caroline.hanlan@cornwall
developmentcompany.co.uk
Jon Teague
Project Co-ordinator
Tel: 01872 326751
Mob: 07484 010456
jon.teague@cornwall
developmentcompany.co.uk
Josyanne Thatcher
Project Co-ordinator
Tel: 01872 326735
Mob: 07484 010458
josyanne.thatcher@cornwall
developmentcompany.co.uk

44. BUSINESS
INVESTMENT FOR GROWTH 2
Brent Treloar
Programme Manager

45. FUND DETAILS
• £3.6 million ERDF voucher investment programme
delivered by Cornwall Development Company
• Investments between £2500 and £75,000 targeted
at 200 growth business
• Maximum funding 45% of project costs
• Enquiries through online expression of interest
• Primarily aimed at capital investment projects

46. WHO IS IT FOR?
• Aimed at growth businesses
• Innovative products and services
• Strong competitive advantage in your markets
• National and/or international customer base
• Capability to create new skilled jobs
• Seeking gap finance to enable project to proceed

47. NEXT STEP
• Check eligibility and download EOI (expression of
interest) at:
www.cornwalldevelopmentcompany.co.uk/big2
• Fund open for applications until December 2018

48. R G F
Grant Funds
John Hutchings
Programme Manager, RGF Grant Funds
Plymouth University

49. R G F Rounds 1, 3, 4
Cornwall & Isles of Scilly LEP
Heart of the South West LEP
1000+ new jobs
£15M+ of private sector co-investment
Helped over 90 businesses

50. RGF4 SPREAD
Recipients under GAIN Growth Fund+ “GGF+”
Area Total Awarded Jobs
Cornwall (4) £349,642 59
Plymouth (12) £1,190,112 196
Torbay (3) £358,772 41
Devon (10) £796,815 124
Somerset (4) £460,000 73

51. INDUSTRY SECTOR
Sector Amount Jobs %age
Marine £201,827 20 6
IT/Digital £500,628 81 16
Adv
Manufacturing
£1,281,272 178 41
Environmental £286,090 43 9 (72%)
Food & Drink £418,396 72 13 (85%)
Retail/
Wholesale
£316,028 59 10
Tourism £151,100 40 5

54. R G F 6
South West Growth Fund
£10M Fund, grants from £15k to £1M
Target – 1068 new jobs
£22.3M of private sector co-investment
Mainly supporting capital expenditure projects
CARE : some restrictions

55. R G F 6
South West Growth Fund
State Aid restrictions will apply
Intervention Rates most favourable in Cornwall
New job creation and private sector co-
investment key to success
Competitive process giving maximum value for
money for the public purse

56. R G F 6
South West Growth Fund
Contact
John Hutchings/John Lewis (Grants Team)
john.hutchings@plymouth.ac.uk
john.lewis@plymouth.ac.uk
www.gaininbusiness.com

57. …each application is assessed…
….and
recommended or
otherwise…
…by an expert and
friendly team

58. Hey, that last bid wasn’t half bad……..
……..no, it was all bad !!!!!

59. Sectoral Restrictions
The fisheries and aquaculture sectors.
The primary production and marketing of agricultural and horticultural
products.
Forestry.
Shipbuilding (although small craft building - vessels less than 100gt - is
not restricted).
Airports.
The coal sector.
Steel making.
Manufacture of synthetic fibres.
Certain energy generation, distribution and infrastructure projects.
The transport sector (excluding improvements to socially necessary
services in rural areas).

60. Sectoral Restrictions
Retail.
Tourism (including hotels and leisure facilities).
Warehousing.
Education.
Health services (including medical services and
residential care).
Business services.
Financial services.
Franchise operations.
Property development and investment.

62. Investment ready
Richard Wadman– Corporate Finance Director
May 2016

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Funding options
Understand
your
requirements
Understand
funding
options and
funders
requirements

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Requirements: Grants
 “Project” eligibility – sector, size, location…
 Timescale – prescriptive, process and panels
 Match funding
 ‘need for grant’ versus viable proposition
 On going requirements
 State Aid; Procurement; etc

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Requirements: Debt
 Serviceability & Headroom: Ability to repay
 Security / Personal Guarantees
 Conduits for government initiatives
Assisted Asset Purchase (RGF)
Funding for Lending
Enterprise Finance Guarantee Scheme
 Covenants – achievable / appropriate?

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Requirements: Equity
 Equity funder requirements » growth
 Exit route and returns to the investor
 SEIS/ EIS
 Investors expertise vs. loss of independence?
 Be prepared to discuss valuation
 Due diligence (questions)
 Crowd – “being part of something”? (BrewDog)

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Distillation and
Communication:
including Business
Plan and Financial
Projections
Purpose of
funding
needed? (When,
why, what for and
how long for)
Proof of market /
Route to market
Credibility
including
‘catalyst’ for
step change
Acknowledging
risks and
mitigate
Team: ability to
deliver
The
Business
Case
Investor Ready – Business Case

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Investment ready – housekeeping
 Licences / contracts?
IPR ownership in the company?
Books and records in order?
VAT, PAYE/NI
Statutory Accounts/management accounts

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Investor Ready - Summary
Appropriate funding (understand the options)
Business Case

Know the ‘deal breakers’
Build in extra time
Build relationships

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Banks –£107.56bn lent to SMEs
https://www.bba.org.uk/news/statistics/sme-statistics/bank-support-for-smes-4th-quarter-2015/#.VysgAz_2bcs
81%

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“Challenge to the Status Quo” –
UK Challenger Banks
• Phrase coined by Vince Cable
• Big 4 (HSBC, Lloyds, RBS, Barclays) plus Santander and Handlesbanken
• Metro bank – first new banking licence for more than 100 years
• Other challengers – Virgin, Paragon, Aldermore*, Shawbrook*, OneSavings*
• Interestingly (*) are Private Equity owned.
• Can they “challenge” the Big 4. Time will tell
 Flexible
 Speed of response
 Impact of a downturn?
 Critical mass? More consolidation?!!

72. Finance in Cornwall
Aldermore Bank PLC.
Jon Myerscough

73. Commercial
&
Residential
Mortgages
Founded by CEO Phillip
Monks with backing
from AnaCap Financial
Partners LLP
May 2009
Successfully floated on
the London Stock
Exchange
March 2015
Total
Customer
Lending
£6.1bn
Customer
Deposits
£5bn
Number of
Aldermore
Clients
195,000
Working Capital Finance
£1bn+
Confidential Invoice
Discounting
Factoring
Construction Finance
Trade Finance
Bad Debt Protection
Asset
Finance
£893m
Hire
Purchase
Lease
Finance
Refinance
Savings
Wide product
range
Market
Leading
Rates
FTSE 250
June
2015

74. Start-Up
• Supplier Payment Terms
• Cost of Credit Control
• Weekly salaries

75. Start-Up
Growth
• Organic Working Capital
gap
• Residential Mortgage

76. Start-Up
Growth
Maturity
• Working capital headroom
• Savings

77. Start-Up
Growth
Maturity
Expansion
• Mergers and Acquisitions
• Purchase premises
• Plant and Machinery
Investment

78. Start-Up
Growth
Maturity
Expansion
Exit
• Succession – MBO
• Savings

79. Thank you for your time

80. Finance in Cornwall 2016
Scott Bentley – Partner
The next 90 minutes…

81. Break (20 mins)
Session 2 start time
10.10am
Screen 1 (> 2 years trading)
Screen 2 (< 2 years trading)

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