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Finance in Cornwall 2015 Segment 2B

The document outlines various financial support and funding options available for SMEs in Cornwall, focusing on grants, debt, equity, and business support for businesses that have been operating for over two years. It discusses the importance of being 'investment ready', the criteria for accessing different types of funding, and highlights programs like the Santander Breakthrough initiative and peer-to-peer lending options. The information is aimed at helping businesses understand their financing needs and navigate the landscape of funding opportunities.

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F Finance in Cornwall 2015 “71% of SMEs approach only one provider of finance” Richard Wadman – Corporate Finance Director Business trading for > 2 years
www.francisclark.co.uk Structure of morning • Background, EU “calls” and the Banks (8:30am to 9:42am) • LEP, Cornwall EU millions and “calls” • Banks and SMEs • Company presentation • Grants, debt, equity and business support – stratified by age of business (10:02 am to 11:22 am) • Secured finance, alternative sources of finance, business support (11.42 am to 1.00pm) • State Aid • Company presentation • Q&A one to one / Networking (1pm to 2pm)
www.francisclark.co.uk Funding and support – for business > 2 years old • 6 to 8 minute presentations on: • “Investment ready” • Grants • Peer to Peer (loan) x 2 • SW Loan Fund (loan) • Growth Funds - mezzanine • Growth Funds - equity • Venture Capital/ Private Equity
Getting investment ready David Armstrong Corporate Finance Director
www.francisclark.co.uk What we will cover • What funding is right for you? • Are you ready? • How do you secure it?
www.francisclark.co.uk Matching requirements Understand your business and its requirements Understand funding options and funders’ requirements General: Debt or Equity Risk? (and/ or potential for grant funding?)
www.francisclark.co.uk Requirements: Grants • “Project” eligibility – sector, size, location… • Job creation • Timescale – prescriptive, process and panels, not retrospective • Match funding • ‘Need for grant’ versus viable proposition • State Aid
www.francisclark.co.uk Requirements: Debt • Serviceability & Headroom • Security / Personal Guarantees • Conduits for government initiatives • Covenants – achievable / appropriate?
www.francisclark.co.uk Requirements: Equity • Exit route and returns to the investor • Investors’ expertise vs. loss of independence? • Be prepared to discuss valuation
www.francisclark.co.uk Investment ready? • The story – past, present and future • Due diligence:  Compliance and legal  Financial performance • Credible management
www.francisclark.co.uk Applying for the funding • When, why and what funding is needed (Business plan and projections) • Communicating your requirement (Business case / application form and projections) • Building the relationship – on going dialogue
www.francisclark.co.uk Structure of a business plan • Contents • Executive summary • Background to the business • Products and services • Customers and markets • Business operation • Management • Financial history • Financial Projections • Appendices
www.francisclark.co.uk Investor Ready - Conclusions • Appropriate funding / understand the funder • Documentation • Sufficient information for a risk assessment • Be prepared for “due diligence” • Build in sufficient time • There is assistance out there…
www.francisclark.co.uk “You are often trying to persuade a stranger to give you somebody else’s savings…”
R G F Grant Funds John Hutchings Programme Manager, RGF Grant Funds Plymouth University
R G F Grant Funds Plymouth University Has led or partnered in 5 of the 6 RGF “Rounds”
R G F Cornwall & Isles of Scilly LEP Heart of the South West LEP 1000+ new jobs £15M+ of private sector co-investment Helped over 90 businesses
R G F 5 U B I through North Devon+ Target 373 new jobs £15M of co-investment HotSW LEP ONLY
R G F 6 South West Growth Fund £10M Fund, grants from £15k to £1M Target – 634 new jobs £22.3M of private sector co-investment Mainly supporting capital expenditure projects CARE : some restrictions
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
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
Funding Circle Jeremy Crinall Business Development Manager South West Simple, affordable business loans
“At present the largest four banks account for over 80% of UK SMEs’ main banking relationships. Many SMEs only approach the largest banks when seeking finance…in the case of the first time SME borrowers the rejection rate is 50%.” Gov.uk, 2014 6
What is the alternative? Traditional lending Peer-to-peer lending 4
A simple model: Lenders can spread risk by lending small amounts to hundreds of businesses Business loan Loan parts Loan parts Loan parts Loan parts Loan parts Loan parts Loan parts Loan parts Loan parts 5
3 Founding Members – set up in 2009 Over £600m lent Over 10,000 loans completed 175+ Staff in the UK 60+ Staff in the USA Aim is to become the global market-place for investing in and borrowing for SMEs (as of April 2015) Funding Circle – Who are we? Index Ventures Union Square Ventures Accel Partners 26
27 • We are not a Bank - Funding Circle do not lend our own money • Funding Circle are an online market-place – where investors lend directly to SME businesses • £5.2m lent to SME in Cornwall (march 2015) • Liquidity depends on both the ‘Fractional Retail’ and ‘Institutional Whole Loan’ market-place • Institutional investors agreed to invest £127m & $420m in our ‘Whole Loan’ market- place – UK & US Market-place lending
28 • The Government lent an initial tranche of £20m through Funding Circle in 2013 • A further £40m has been committed in late 2014 • Forms part of the Business Finance Partnership scheme (British Business Bank) • 10% of every loan on the platform is financed by Government The Government’s commitment to Funding Circle
Unsecured Loan £5k - £250k Suitable for a wide range of purposes 6 months to 5 year term Rates from 6% (8.3% avg A+ over 36 months) Fees between 3-4% of loan amount No ERP’s Secured Loan £150k - £1m  All asset security agreement  Charge on specific properties or assets Types of borrowing 29 Asset finance £20k - £1m  Suitable for a wide range of hard assets  Hire purchase  Flexible on LTV– 100% considered  Individual deals up to £250k, credit lines of up to £1m
Any business, any purpose…… 8 Loan Purpose Working capital Expansion/growth Capital Asset purchase Other Residential property development Asset finance Refinancing a loan Tax payment Tax liability Annual purchase Commercial mortgage Sector Automotive Finance Leisure & Hospitality Education & Training I.T and Telecommunications Agriculture Consumer Services Healthcare Manufacturing and Engineering Other Professional and Business Support Property and Construction Retail Transport and Logistics Wholesale
31 Minimum criteria includes • Limited companies, LLP’s & non limited • 2 years of filed/formal accounts + latest 3 month bank statements • Directors – no CCJs, CVA & CVL (last 6 years) • Min turnover £50,000 • Beneficial ownership in UK • Loan supported by PG – Main shareholders
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Thank you for listening 35 Jeremy Crinall Business Development Manager jeremy.crinall@fundingcircle.com 0203 667 2250
B Y D AV I D B R O W N
• UK P2P business lending is a billion pound industry • Regulated by FCA • UK has most advanced website platforms • 16 business lenders in the UK • Folk2Folk 6th largest in UK PEER-TO-PEER BUSINESS LENDING
• Varied concepts across increasing number of Companies and Platforms • Some online P2P platforms offer unsecured lending, some offer a mix • Types of security include: property, any tangible asset, director’s guarantee • Folk2Folk only offer secured lending against property WHAT IS SECURED LENDING?
• First charge mortgage • Benefits of secured lending – The loan is more attractive to a lender – Minimises risk for the lender – If the borrower does not have property to secure against their loan we will not lend HOW IT WORKS
• This type of lending isn’t new • Previously known as a private mortgage: people with money lent to people in the community who needed it and the local solicitor would referee the arrangement. • Business are finding it harder to get credit and people are not seeing the levels of return on their savings as they had previously • There’s been a re-emergence of the old fashioned way of borrowing and lending but now under the banner of a modern FCA regulated industry • And with Folk2Folk, who are born out of a Cornish firm of solicitors with 300 years experience of private mortgages, we see it coming full circle. HISTORY OF SECURED LENDING
• We’ve introducing finance for business initiatives ranging from the purchase of Golf Clubs, kick-starting multi-million pound property developments, and renovating leisure complexes and barn conversions. • Utilise your property assets if you are looking to grow your business or require a cash injection. • We offer face2Face in addition to online proposition. • Speed of decision making • Local knowledge FOLK2FOLK SECURED LENDING
TYPES OF BUSINESS ACTIVITIES WE FUND property build/purchase 55% renewables 10% commercial 12% agriculture 7% leisure 9% other 7% property build/purchase renewables commercial agriculture leisure other
www.folk2folk.com Twitter.com/Folk2FolkUK Facebook.com/folk2folk Linkedin.com/company/folk2folk
SWIG Finance John Peters, Managing Director Call: 01872 223883 info@swigfinance.co.uk www.swigfinance.co.uk
Who are SWIG Finance?
We fund businesses looking to + = Business Support Growth
Get in touch www.swigfinance.co.uk info@swigfinance.co.uk 01872 223883 SWIG Services Ltd Lowena House, Glenthorne Court, Truro Business Park Threemilestone, Truro, Cornwall, TR4 9NY
SANTANDER GROWTH CAPITAL PETER ABEL, DIRECTOR SANTANDER GROWTH CAPITAL, Tel: 07809 493791 Email: peter.abel@santander.co.uk Website: www.santanderbreakthrough.co.uk
SANTANDER BREAKTHROUGH PROGRAMME The Breakthrough programme will invest £200 million in fast-growth SMEs, supporting local enterprise and community initiatives, creating jobs, inspiring entrepreneurs of the future and turbo-boosting a private sector led economy This initiative will help SMEs participating in the Breakthrough programme to reach new overseas markets if their growth plans and ambitions are beyond the UK. It includes subsidised trade missions, educational roadshows and support accessing information on exporting. Santander is running a unique experience programme for fast-growth SMEs that takes them behind the doors of the world’s most iconic and best fast-growth businesses, to learn first hand how they did it – real experience to help their own growth journey. In keeping with our focus on responsible business, Santander has launched a number of initiatives to encourage more responsible and inclusive business practice and to invest in Social Enterprise development. Santander is running regional Breakthrough Live conferences for fast-growth SMEs. Working with Santander Universities the Breakthrough Live conferences bring together leading entrepreneurs to share experiences. Santander has launched an online portal for SMEs participating in the Breakthrough investment programme to access the best student and graduate talent across our partner University network – including Universities in Scotland. Santander has up to £200 million to invest in fast-growth SMEs turning over between £500k – £50m across the UK. The investment programme will run over the next 3 – 5 years and invest in up to 200 SMEs. 1. Breakthrough Growth Capital 4. Breakthrough Talent 2. Breakthrough Live 5. Breakthrough Responsibly 3. Breakthrough Masterclasses 6. Breakthrough International www.santanderbreakthrough.co.uk Breakthrough@santander.co.uk
INTRODUCTION - GROWTH CAPITAL FILLS THE FUNDING GAP as identified in the Rowland Report
OUR BROAD CRITERIA Annual turnover £0.5m – £50m Growth in a combination of sales and/or profits Track record of sustainable operating profitability and cash generation Proven management team Privately owned businesses rather than Private Equity backed Not start-ups. At least 3 years of financial history
AREAS WHERE GROWTH CAPITAL SUITABLE Capex investment to support growth plans Investment in New Product Development Investment in sales & marketing overhead for new products / areas Acquisition funding support Funding of proven roll- out concept Expansion projects to drive rapid growth
KEY BENEFITS TO SMEs Debt offering. No warrants – no dilution of equity Preserves cash Interest only, with cash interest L+5% and rolled interest of 5% payable at maturity Enhanced debt capacity, cash flow lend - not limited to tangible security Flexibility - No prepayment penalty fees and no annual monitoring fees No automatic requirement for PGs Its not just about the money - Additional support through “Breakthrough”
£1.2m Growth Capital Video technology August 2014 £1.5m Growth Capital Childcare and education 60 new jobs 50 new jobs September 2014 £1.35m Growth Capital Vibration monitoring 62 new jobs July 2014 £1.1m Growth Capital Plumbing distribution July 2014 £1m Growth Capital Engineering consultancy 95 new jobs 20 new jobs July 2014 £0.75m Growth Capital Cloud brokerage services 35 new jobs May 2014 £0.75m Growth Capital Automotive April 2014 24 new jobs £0.5m Growth Capital Healthy fast food chain 40 new jobs October 2014 £1.6m of Facilities Bakeries 45 new jobs December 2014 £1.8m of Facilities Services 43 new jobs September 2014 £2.4m of Facilities Supplier & Manufacturer 19 new jobs December 2014 SOME RECENT SMEs WE HAVE SUPPORTED….
SUPPORTED BUSINESSES
CUSTOMER ADVOCACY “It is mind-blowing that a bank would be that entrepreneurial and supportive. They are a breath of fresh air.” Paul Bradford, Southern Communications, CEO “Santander gets close to you in terms of understanding the business and our Relationship Director really understands the nuts and bolts of what we’re doing and the issues we have.” Mike Bishop, Finance Director and CoFounder, YourVets “I think the Growth Capital investment is a really well thought-out product. It allows us to draw down funds as the company grows without having to keep going back to the bank.” Tim Hobbs, CFO, Vital Ingredient “Before the deal we had 35 employees but only one sales person. Now we have the resources to grow the team and hire people to manage direct sales, partners and channels.” Mat Atkinson, CEO, ProofHQ “It’s fascinating to see that entrepreneurship is a genuine objective of Santander and not just words.” Geoff van Sonsbeeck, co-founder,Isabella Oliver “The Santander team got to know us individually and we felt the approach of the team was sensible and pragmatic.” Graeme Scott, CEO, Bertram Nursery Group “The expertise of the people who came in from Santander was completely different from the other banks... They could see the frustrations of a small business. They also understood that a small business needs time to do things.” Andy Hill, CEO, I Like Music
THANKYOU PETER ABEL, DIRECTOR SANTANDER GROWTH CAPITAL, Tel: 07809 493791 Email: peter.abel@santander.co.uk Website: www.santanderbreakthrough.co.uk
Growth Capital Investors Introduction to BGF Ned Dorbin 12 May 2015
Growth Capital Investors BGFisaninvestmentfirm thatprovidesgrowthcapital of£2m - £10m toUK businesseswithturnoverof > £5m. Who we are. Funding for growth and equity release Investment of £2m – £10m for a minority stake Long-term and patient capital, no forced exit Access to huge network and support Fast and focused investment process
Growth Capital Investors 67 How are we doing?
Growth Capital Investors Investment of £2m- £10m Cash-in: to support long term growth Cash-out: for existing shareholders Equity stake of up to 40% Always a minority partner – you retain control Flexible structures – equity / loan notes Meets the needs of the company and shareholder What we offer. Workingalongsidethe banks,BGFprovides growthcapitalina waythat meetscompanies’needs.
Growth Capital Investors No closed fund pressures Patient capital. No drag rights, no forced exit Fair legal approach Less onerous investor legal protections Fast and focused investment process Minimises disruption and fees More than money Access to impressive network and support What we offer. Workingalongsidethe banks,BGFprovides growthcapitalina waythat meetscompanies’needs.
Growth Capital Investors 70
Growth Capital Investors South West and South Wales James Austin 07872 819093 Ned Dorbin 07800 682195 Alex Garfitt 07770 582021 Paul Oldham Regional Director 07887 657697 Edwin Davies 07880 384983 Greg Norman 07557 747302 Sarah Ledwidge 07557 232034 Daniel Tapson 07964 904443
72 YFM Equity Partners Giles Whitman 12th May 2015
73 73 YFM Equity Partners is a specialist equity investor based in the UK regions, investing in fast growing businesses at a point of transformational growth We invest £1m to £10m in UK companies We back ambitious management teams with a clear plan to create value
74 74  Step-change in revenue and profit, driven by: o Entering new markets / launching new products o Acquisitions o Changing market dynamics o Increased sales and marketing  Often the result of change of ownership / de-risking  Transaction types: o Growth capital; MBO; MBI; cash-out What is transformational growth?
75 75  Strong management  Typically £0.5m-£2m of underlying EBIT  Small losses OK for earlier stage growth capital deals o But should be budgeting profits within 12 months o Minimum revenue £2m  Invest in a broad range of sectors, but particularly like: o Brand roll-outs o Proprietary technology o Niche market leaders What else do we look for?
76 76  We are experienced investors o Founded in 1982 – we have over 30 years of experience, investing in fast-growing transformational businesses o A regional office network - London, Leeds, Manchester, Birmingham and Sheffield o A team of 15 investment professionals  We understand the nature of corporate transactions o We will ensure appropriate funding structures and plans are in place  We deliver what we promise Our Transformational Expertise
77 77  We empower management to deliver their plan o Brings out the best in management teams o We understand the difference between support and interference  We work closely with our investee businesses o We have a broad network of advisers and Non Executive Directors to assist o We understand that not everything goes to plan Our Supportive Partnership Approach
78 Mangar International Inflatable lifting and bathing equipment. Powys £4,600,000 MBO January 2014 Intelligent Office UK Process outsourcing solutions to legal practices. Alloa £4,890,000 MBO May 2014 Macro Art Specialist wide-format digital printer. Cambridgeshire £2,100,000 MBO June 2014 Intamac Systems Remote monitoring of key services in the home. Northampton £1,000,000 Growth Capital June 2014 The Heritage Window Company Specialist manufacturer of aluminium windows. London £3,171,000 MBO September 2014 2014 Highlights Investments: Cambrian Park & Leisure Homes Manufacturers timber holiday lodges. Porthmadog £3,000,000 MBO October 2014 Springboard Research Measurement of retail performance data. Milton Keynes £2,964,000 MBO October 2014 ACC Aviation Aircraft lease broking. Reigate £5,170,000 MBO November 2014 Business Collaborator Collaboration software to the construction sector Reading £3,350,000 MBO November 2014 Wakefield Acoustics Specialist industrial acoustic engineering business Cleckheaton £1,800,000 MBO December 2014 Waterfall Services One of the UK’s leading independent mid-sized contract caterers Location: Nationwide (Headquartered in Warrington) YFM Investment: 2007 Return: 5.3x Realisation:
79 “The investment from YFM will help accelerate the business’ ambitious plans in the $3bn power solutions market.” John O’Donohue, CEO, Poweroasis Case study Sector Telecomms Location Swindon Transaction Development Capital Deal size £4.5m Investment 2011 The business • Power management system that controls and manages the supply of power to remote telecoms base stations • Enables network operators to deliver capital costs savings, energy saving and revenue protection by reducing network outages • A number of key strategic partners provide access to international markets The strategy • Targeting a large and rapidly growing market • Network power management will be critical in the future • Market leading company with a more comprehensive and flexible product than any other competitor • Well advanced sales and orders pipeline • Strong management team The developments • Supported the expansion of the sales and marketing in Asia, Africa, Europe and North America • Developed partnerships in strategic business areas • Proving the scalability of the business model
80 80  We are experts at transformation  We are very experienced  We are supportive partners  We have funds available and are keen to invest Summary
81 81  It is in the nature of venture capital investments that considerable uncertainties exist in relation to the ability of individual Investees to establish themselves as viable businesses.  As there will normally be no ready market in the securities of the Investees such investments will be essentially illiquid and may be difficult both to value and to realise.  Any proposed investments are likely to involve an above average level of risk.  Investment through a fund in developing businesses should be regarded as long term and as carrying a significantly higher degree of risk than more conventional forms of investment.  Any interests in a fund itself will also not be readily marketable.  Past performance of YFM Equity Partners or any of its subsidiaries and employees does not provide any guarantee of future performance. This presentation has not been approved as a financial promotion by an authorised person within the meaning of the Financial Services and Markets Act 2000 “the Act”. It is exempt from the general restriction in s.21 of the Act on the grounds that it is directed only towards ‘Investment Professionals’ within the definition of Article 14 of the Financial Services and Markets Act 2000 (Promotion of Collective Investment Schemes) Order 2001 and Article 19 (5) of the Financial Promotions Order. It is only meant for investment professionals with professional experience of the subject matter. It is issued for information purposes only and should not be construed as advice, nor does it constitute an offer and should not be relied on by any other person. It may not be copied or distributed or otherwise made available to any person without the express written consent of YFM Equity Partners. YFM Equity Partners invests through its subsidiary YFM Private Equity Limited which is registered in England and Wales, Co No: 2174994. Registered Office: 5th Floor, Valiant Building, 14 South Parade, Leeds LS1 5QS. YFM Private Equity Limited is authorised and regulated by the Financial Conduct Authority, FRN: 122120 and is ultimately owned by YFM Equity Partners LLP. Important Notice
www.francisclark.co.uk (c) copyright Francis Clark LLP, 2015 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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Finance in Cornwall 2015 Segment 2B

  • 1.
    F Finance in Cornwall 2015 “71%of SMEs approach only one provider of finance” Richard Wadman – Corporate Finance Director Business trading for > 2 years
  • 2.
    www.francisclark.co.uk Structure of morning •Background, EU “calls” and the Banks (8:30am to 9:42am) • LEP, Cornwall EU millions and “calls” • Banks and SMEs • Company presentation • Grants, debt, equity and business support – stratified by age of business (10:02 am to 11:22 am) • Secured finance, alternative sources of finance, business support (11.42 am to 1.00pm) • State Aid • Company presentation • Q&A one to one / Networking (1pm to 2pm)
  • 3.
    www.francisclark.co.uk Funding and support –for business > 2 years old • 6 to 8 minute presentations on: • “Investment ready” • Grants • Peer to Peer (loan) x 2 • SW Loan Fund (loan) • Growth Funds - mezzanine • Growth Funds - equity • Venture Capital/ Private Equity
  • 4.
  • 5.
    www.francisclark.co.uk What we willcover • What funding is right for you? • Are you ready? • How do you secure it?
  • 6.
    www.francisclark.co.uk Matching requirements Understand your business and its requirements Understand funding optionsand funders’ requirements General: Debt or Equity Risk? (and/ or potential for grant funding?)
  • 7.
    www.francisclark.co.uk Requirements: Grants • “Project”eligibility – sector, size, location… • Job creation • Timescale – prescriptive, process and panels, not retrospective • Match funding • ‘Need for grant’ versus viable proposition • State Aid
  • 8.
    www.francisclark.co.uk Requirements: Debt • Serviceability& Headroom • Security / Personal Guarantees • Conduits for government initiatives • Covenants – achievable / appropriate?
  • 9.
    www.francisclark.co.uk Requirements: Equity • Exitroute and returns to the investor • Investors’ expertise vs. loss of independence? • Be prepared to discuss valuation
  • 10.
    www.francisclark.co.uk Investment ready? • Thestory – past, present and future • Due diligence:  Compliance and legal  Financial performance • Credible management
  • 11.
    www.francisclark.co.uk Applying for thefunding • When, why and what funding is needed (Business plan and projections) • Communicating your requirement (Business case / application form and projections) • Building the relationship – on going dialogue
  • 12.
    www.francisclark.co.uk Structure of abusiness plan • Contents • Executive summary • Background to the business • Products and services • Customers and markets • Business operation • Management • Financial history • Financial Projections • Appendices
  • 13.
    www.francisclark.co.uk Investor Ready -Conclusions • Appropriate funding / understand the funder • Documentation • Sufficient information for a risk assessment • Be prepared for “due diligence” • Build in sufficient time • There is assistance out there…
  • 14.
    www.francisclark.co.uk “You are oftentrying to persuade a stranger to give you somebody else’s savings…”
  • 15.
    R G F GrantFunds John Hutchings Programme Manager, RGF Grant Funds Plymouth University
  • 16.
    R G F GrantFunds Plymouth University Has led or partnered in 5 of the 6 RGF “Rounds”
  • 17.
    R G F Cornwall& Isles of Scilly LEP Heart of the South West LEP 1000+ new jobs £15M+ of private sector co-investment Helped over 90 businesses
  • 18.
    R G F5 U B I through North Devon+ Target 373 new jobs £15M of co-investment HotSW LEP ONLY
  • 19.
    R G F6 South West Growth Fund £10M Fund, grants from £15k to £1M Target – 634 new jobs £22.3M of private sector co-investment Mainly supporting capital expenditure projects CARE : some restrictions
  • 20.
    R G F6 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
  • 21.
    R G F6 South West Growth Fund Contact John Hutchings/John Lewis (Grants Team) john.hutchings@plymouth.ac.uk john.lewis@plymouth.ac.uk www.gaininbusiness.com
  • 22.
    Funding Circle Jeremy Crinall BusinessDevelopment Manager South West Simple, affordable business loans
  • 23.
    “At present thelargest four banks account for over 80% of UK SMEs’ main banking relationships. Many SMEs only approach the largest banks when seeking finance…in the case of the first time SME borrowers the rejection rate is 50%.” Gov.uk, 2014 6
  • 24.
    What is thealternative? Traditional lending Peer-to-peer lending 4
  • 25.
    A simple model:Lenders can spread risk by lending small amounts to hundreds of businesses Business loan Loan parts Loan parts Loan parts Loan parts Loan parts Loan parts Loan parts Loan parts Loan parts 5
  • 26.
    3 Founding Members– set up in 2009 Over £600m lent Over 10,000 loans completed 175+ Staff in the UK 60+ Staff in the USA Aim is to become the global market-place for investing in and borrowing for SMEs (as of April 2015) Funding Circle – Who are we? Index Ventures Union Square Ventures Accel Partners 26
  • 27.
    27 • We arenot a Bank - Funding Circle do not lend our own money • Funding Circle are an online market-place – where investors lend directly to SME businesses • £5.2m lent to SME in Cornwall (march 2015) • Liquidity depends on both the ‘Fractional Retail’ and ‘Institutional Whole Loan’ market-place • Institutional investors agreed to invest £127m & $420m in our ‘Whole Loan’ market- place – UK & US Market-place lending
  • 28.
    28 • The Governmentlent an initial tranche of £20m through Funding Circle in 2013 • A further £40m has been committed in late 2014 • Forms part of the Business Finance Partnership scheme (British Business Bank) • 10% of every loan on the platform is financed by Government The Government’s commitment to Funding Circle
  • 29.
    Unsecured Loan £5k -£250k Suitable for a wide range of purposes 6 months to 5 year term Rates from 6% (8.3% avg A+ over 36 months) Fees between 3-4% of loan amount No ERP’s Secured Loan £150k - £1m  All asset security agreement  Charge on specific properties or assets Types of borrowing 29 Asset finance £20k - £1m  Suitable for a wide range of hard assets  Hire purchase  Flexible on LTV– 100% considered  Individual deals up to £250k, credit lines of up to £1m
  • 30.
    Any business, anypurpose…… 8 Loan Purpose Working capital Expansion/growth Capital Asset purchase Other Residential property development Asset finance Refinancing a loan Tax payment Tax liability Annual purchase Commercial mortgage Sector Automotive Finance Leisure & Hospitality Education & Training I.T and Telecommunications Agriculture Consumer Services Healthcare Manufacturing and Engineering Other Professional and Business Support Property and Construction Retail Transport and Logistics Wholesale
  • 31.
    31 Minimum criteria includes •Limited companies, LLP’s & non limited • 2 years of filed/formal accounts + latest 3 month bank statements • Directors – no CCJs, CVA & CVL (last 6 years) • Min turnover £50,000 • Beneficial ownership in UK • Loan supported by PG – Main shareholders
  • 32.
  • 33.
  • 34.
  • 35.
    Thank you forlistening 35 Jeremy Crinall Business Development Manager jeremy.crinall@fundingcircle.com 0203 667 2250
  • 36.
    B Y DAV I D B R O W N
  • 37.
    • UK P2Pbusiness lending is a billion pound industry • Regulated by FCA • UK has most advanced website platforms • 16 business lenders in the UK • Folk2Folk 6th largest in UK PEER-TO-PEER BUSINESS LENDING
  • 38.
    • Varied conceptsacross increasing number of Companies and Platforms • Some online P2P platforms offer unsecured lending, some offer a mix • Types of security include: property, any tangible asset, director’s guarantee • Folk2Folk only offer secured lending against property WHAT IS SECURED LENDING?
  • 39.
    • First chargemortgage • Benefits of secured lending – The loan is more attractive to a lender – Minimises risk for the lender – If the borrower does not have property to secure against their loan we will not lend HOW IT WORKS
  • 40.
    • This typeof lending isn’t new • Previously known as a private mortgage: people with money lent to people in the community who needed it and the local solicitor would referee the arrangement. • Business are finding it harder to get credit and people are not seeing the levels of return on their savings as they had previously • There’s been a re-emergence of the old fashioned way of borrowing and lending but now under the banner of a modern FCA regulated industry • And with Folk2Folk, who are born out of a Cornish firm of solicitors with 300 years experience of private mortgages, we see it coming full circle. HISTORY OF SECURED LENDING
  • 41.
    • We’ve introducingfinance for business initiatives ranging from the purchase of Golf Clubs, kick-starting multi-million pound property developments, and renovating leisure complexes and barn conversions. • Utilise your property assets if you are looking to grow your business or require a cash injection. • We offer face2Face in addition to online proposition. • Speed of decision making • Local knowledge FOLK2FOLK SECURED LENDING
  • 42.
    TYPES OF BUSINESSACTIVITIES WE FUND property build/purchase 55% renewables 10% commercial 12% agriculture 7% leisure 9% other 7% property build/purchase renewables commercial agriculture leisure other
  • 43.
  • 44.
    SWIG Finance John Peters,Managing Director Call: 01872 223883 info@swigfinance.co.uk www.swigfinance.co.uk
  • 45.
  • 46.
    We fund businesseslooking to + = Business Support Growth
  • 49.
    Get in touch www.swigfinance.co.uk info@swigfinance.co.uk 01872223883 SWIG Services Ltd Lowena House, Glenthorne Court, Truro Business Park Threemilestone, Truro, Cornwall, TR4 9NY
  • 50.
    SANTANDER GROWTH CAPITAL PETERABEL, DIRECTOR SANTANDER GROWTH CAPITAL, Tel: 07809 493791 Email: peter.abel@santander.co.uk Website: www.santanderbreakthrough.co.uk
  • 51.
    SANTANDER BREAKTHROUGH PROGRAMME TheBreakthrough programme will invest £200 million in fast-growth SMEs, supporting local enterprise and community initiatives, creating jobs, inspiring entrepreneurs of the future and turbo-boosting a private sector led economy This initiative will help SMEs participating in the Breakthrough programme to reach new overseas markets if their growth plans and ambitions are beyond the UK. It includes subsidised trade missions, educational roadshows and support accessing information on exporting. Santander is running a unique experience programme for fast-growth SMEs that takes them behind the doors of the world’s most iconic and best fast-growth businesses, to learn first hand how they did it – real experience to help their own growth journey. In keeping with our focus on responsible business, Santander has launched a number of initiatives to encourage more responsible and inclusive business practice and to invest in Social Enterprise development. Santander is running regional Breakthrough Live conferences for fast-growth SMEs. Working with Santander Universities the Breakthrough Live conferences bring together leading entrepreneurs to share experiences. Santander has launched an online portal for SMEs participating in the Breakthrough investment programme to access the best student and graduate talent across our partner University network – including Universities in Scotland. Santander has up to £200 million to invest in fast-growth SMEs turning over between £500k – £50m across the UK. The investment programme will run over the next 3 – 5 years and invest in up to 200 SMEs. 1. Breakthrough Growth Capital 4. Breakthrough Talent 2. Breakthrough Live 5. Breakthrough Responsibly 3. Breakthrough Masterclasses 6. Breakthrough International www.santanderbreakthrough.co.uk Breakthrough@santander.co.uk
  • 52.
    INTRODUCTION - GROWTHCAPITAL FILLS THE FUNDING GAP as identified in the Rowland Report
  • 53.
    OUR BROAD CRITERIA Annualturnover £0.5m – £50m Growth in a combination of sales and/or profits Track record of sustainable operating profitability and cash generation Proven management team Privately owned businesses rather than Private Equity backed Not start-ups. At least 3 years of financial history
  • 54.
    AREAS WHERE GROWTHCAPITAL SUITABLE Capex investment to support growth plans Investment in New Product Development Investment in sales & marketing overhead for new products / areas Acquisition funding support Funding of proven roll- out concept Expansion projects to drive rapid growth
  • 55.
    KEY BENEFITS TOSMEs Debt offering. No warrants – no dilution of equity Preserves cash Interest only, with cash interest L+5% and rolled interest of 5% payable at maturity Enhanced debt capacity, cash flow lend - not limited to tangible security Flexibility - No prepayment penalty fees and no annual monitoring fees No automatic requirement for PGs Its not just about the money - Additional support through “Breakthrough”
  • 56.
    £1.2m Growth Capital Videotechnology August 2014 £1.5m Growth Capital Childcare and education 60 new jobs 50 new jobs September 2014 £1.35m Growth Capital Vibration monitoring 62 new jobs July 2014 £1.1m Growth Capital Plumbing distribution July 2014 £1m Growth Capital Engineering consultancy 95 new jobs 20 new jobs July 2014 £0.75m Growth Capital Cloud brokerage services 35 new jobs May 2014 £0.75m Growth Capital Automotive April 2014 24 new jobs £0.5m Growth Capital Healthy fast food chain 40 new jobs October 2014 £1.6m of Facilities Bakeries 45 new jobs December 2014 £1.8m of Facilities Services 43 new jobs September 2014 £2.4m of Facilities Supplier & Manufacturer 19 new jobs December 2014 SOME RECENT SMEs WE HAVE SUPPORTED….
  • 57.
  • 58.
    CUSTOMER ADVOCACY “It ismind-blowing that a bank would be that entrepreneurial and supportive. They are a breath of fresh air.” Paul Bradford, Southern Communications, CEO “Santander gets close to you in terms of understanding the business and our Relationship Director really understands the nuts and bolts of what we’re doing and the issues we have.” Mike Bishop, Finance Director and CoFounder, YourVets “I think the Growth Capital investment is a really well thought-out product. It allows us to draw down funds as the company grows without having to keep going back to the bank.” Tim Hobbs, CFO, Vital Ingredient “Before the deal we had 35 employees but only one sales person. Now we have the resources to grow the team and hire people to manage direct sales, partners and channels.” Mat Atkinson, CEO, ProofHQ “It’s fascinating to see that entrepreneurship is a genuine objective of Santander and not just words.” Geoff van Sonsbeeck, co-founder,Isabella Oliver “The Santander team got to know us individually and we felt the approach of the team was sensible and pragmatic.” Graeme Scott, CEO, Bertram Nursery Group “The expertise of the people who came in from Santander was completely different from the other banks... They could see the frustrations of a small business. They also understood that a small business needs time to do things.” Andy Hill, CEO, I Like Music
  • 59.
    THANKYOU PETER ABEL, DIRECTOR SANTANDERGROWTH CAPITAL, Tel: 07809 493791 Email: peter.abel@santander.co.uk Website: www.santanderbreakthrough.co.uk
  • 60.
    Growth Capital Investors Introductionto BGF Ned Dorbin 12 May 2015
  • 61.
    Growth Capital Investors BGFisaninvestmentfirm thatprovidesgrowthcapital of£2m- £10m toUK businesseswithturnoverof > £5m. Who we are. Funding for growth and equity release Investment of £2m – £10m for a minority stake Long-term and patient capital, no forced exit Access to huge network and support Fast and focused investment process
  • 62.
  • 63.
    Growth Capital Investors Investmentof £2m- £10m Cash-in: to support long term growth Cash-out: for existing shareholders Equity stake of up to 40% Always a minority partner – you retain control Flexible structures – equity / loan notes Meets the needs of the company and shareholder What we offer. Workingalongsidethe banks,BGFprovides growthcapitalina waythat meetscompanies’needs.
  • 64.
    Growth Capital Investors Noclosed fund pressures Patient capital. No drag rights, no forced exit Fair legal approach Less onerous investor legal protections Fast and focused investment process Minimises disruption and fees More than money Access to impressive network and support What we offer. Workingalongsidethe banks,BGFprovides growthcapitalina waythat meetscompanies’needs.
  • 65.
  • 66.
    Growth Capital Investors SouthWest and South Wales James Austin 07872 819093 Ned Dorbin 07800 682195 Alex Garfitt 07770 582021 Paul Oldham Regional Director 07887 657697 Edwin Davies 07880 384983 Greg Norman 07557 747302 Sarah Ledwidge 07557 232034 Daniel Tapson 07964 904443
  • 67.
    72 YFM Equity Partners GilesWhitman 12th May 2015
  • 68.
    73 73 YFM Equity Partnersis a specialist equity investor based in the UK regions, investing in fast growing businesses at a point of transformational growth We invest £1m to £10m in UK companies We back ambitious management teams with a clear plan to create value
  • 69.
    74 74  Step-change inrevenue and profit, driven by: o Entering new markets / launching new products o Acquisitions o Changing market dynamics o Increased sales and marketing  Often the result of change of ownership / de-risking  Transaction types: o Growth capital; MBO; MBI; cash-out What is transformational growth?
  • 70.
    75 75  Strong management Typically £0.5m-£2m of underlying EBIT  Small losses OK for earlier stage growth capital deals o But should be budgeting profits within 12 months o Minimum revenue £2m  Invest in a broad range of sectors, but particularly like: o Brand roll-outs o Proprietary technology o Niche market leaders What else do we look for?
  • 71.
    76 76  We areexperienced investors o Founded in 1982 – we have over 30 years of experience, investing in fast-growing transformational businesses o A regional office network - London, Leeds, Manchester, Birmingham and Sheffield o A team of 15 investment professionals  We understand the nature of corporate transactions o We will ensure appropriate funding structures and plans are in place  We deliver what we promise Our Transformational Expertise
  • 72.
    77 77  We empowermanagement to deliver their plan o Brings out the best in management teams o We understand the difference between support and interference  We work closely with our investee businesses o We have a broad network of advisers and Non Executive Directors to assist o We understand that not everything goes to plan Our Supportive Partnership Approach
  • 73.
    78 Mangar International Inflatable liftingand bathing equipment. Powys £4,600,000 MBO January 2014 Intelligent Office UK Process outsourcing solutions to legal practices. Alloa £4,890,000 MBO May 2014 Macro Art Specialist wide-format digital printer. Cambridgeshire £2,100,000 MBO June 2014 Intamac Systems Remote monitoring of key services in the home. Northampton £1,000,000 Growth Capital June 2014 The Heritage Window Company Specialist manufacturer of aluminium windows. London £3,171,000 MBO September 2014 2014 Highlights Investments: Cambrian Park & Leisure Homes Manufacturers timber holiday lodges. Porthmadog £3,000,000 MBO October 2014 Springboard Research Measurement of retail performance data. Milton Keynes £2,964,000 MBO October 2014 ACC Aviation Aircraft lease broking. Reigate £5,170,000 MBO November 2014 Business Collaborator Collaboration software to the construction sector Reading £3,350,000 MBO November 2014 Wakefield Acoustics Specialist industrial acoustic engineering business Cleckheaton £1,800,000 MBO December 2014 Waterfall Services One of the UK’s leading independent mid-sized contract caterers Location: Nationwide (Headquartered in Warrington) YFM Investment: 2007 Return: 5.3x Realisation:
  • 74.
    79 “The investment fromYFM will help accelerate the business’ ambitious plans in the $3bn power solutions market.” John O’Donohue, CEO, Poweroasis Case study Sector Telecomms Location Swindon Transaction Development Capital Deal size £4.5m Investment 2011 The business • Power management system that controls and manages the supply of power to remote telecoms base stations • Enables network operators to deliver capital costs savings, energy saving and revenue protection by reducing network outages • A number of key strategic partners provide access to international markets The strategy • Targeting a large and rapidly growing market • Network power management will be critical in the future • Market leading company with a more comprehensive and flexible product than any other competitor • Well advanced sales and orders pipeline • Strong management team The developments • Supported the expansion of the sales and marketing in Asia, Africa, Europe and North America • Developed partnerships in strategic business areas • Proving the scalability of the business model
  • 75.
    80 80  We areexperts at transformation  We are very experienced  We are supportive partners  We have funds available and are keen to invest Summary
  • 76.
    81 81  It isin the nature of venture capital investments that considerable uncertainties exist in relation to the ability of individual Investees to establish themselves as viable businesses.  As there will normally be no ready market in the securities of the Investees such investments will be essentially illiquid and may be difficult both to value and to realise.  Any proposed investments are likely to involve an above average level of risk.  Investment through a fund in developing businesses should be regarded as long term and as carrying a significantly higher degree of risk than more conventional forms of investment.  Any interests in a fund itself will also not be readily marketable.  Past performance of YFM Equity Partners or any of its subsidiaries and employees does not provide any guarantee of future performance. This presentation has not been approved as a financial promotion by an authorised person within the meaning of the Financial Services and Markets Act 2000 “the Act”. It is exempt from the general restriction in s.21 of the Act on the grounds that it is directed only towards ‘Investment Professionals’ within the definition of Article 14 of the Financial Services and Markets Act 2000 (Promotion of Collective Investment Schemes) Order 2001 and Article 19 (5) of the Financial Promotions Order. It is only meant for investment professionals with professional experience of the subject matter. It is issued for information purposes only and should not be construed as advice, nor does it constitute an offer and should not be relied on by any other person. It may not be copied or distributed or otherwise made available to any person without the express written consent of YFM Equity Partners. YFM Equity Partners invests through its subsidiary YFM Private Equity Limited which is registered in England and Wales, Co No: 2174994. Registered Office: 5th Floor, Valiant Building, 14 South Parade, Leeds LS1 5QS. YFM Private Equity Limited is authorised and regulated by the Financial Conduct Authority, FRN: 122120 and is ultimately owned by YFM Equity Partners LLP. Important Notice
  • 77.
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