Slides from our Finance in Cornwall follow up event - 'How to make an application for grant funding' held on 15th July 2014.

1. How to make an
application for grant
funding
15 July 2014
FiC2014 follow up briefings. No 2

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House keeping

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Contents: Presenters and format
• Presentations (8.15am to 9am)
• Introduction and a bit of context:
Nigel Somers(10)
• The BIG scheme and an administrators
perspective: Alex Nicholas (15) (CDC)
• Applying for grant funds – The principles &
“alternative sources”:
David Bullen(15)
• 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”

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Investment ready: preparation
Understand
your
requirements
(A)
Understand
funding
options
available (B)
and funders
requirements
(C)
Type of
funds
required

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Your requirements (A)
Cash: amount and term?
Other e.g., expertise or contacts?
Business Finance Guide (excludes grants):
• Step out from your business
• Take a fresh look at prospects and challenges
• Analyse your opportunities
• Reach for the future (projections)
• Think about finance

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Funding options (B)
FiC 2014 and Finance in Cornwall factsheet: Grant, Debt and
Equity
And many more…

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Know your options (C – part)
The Business Finance Guide
• Overview: through company lifecycle
• Equity
• Debt
But..
• Grants not covered

8. Alex Nicholas
The Golden Rules of Funding
(from the funders perspective)

9. BUSINESS INVESTMENT FOR GROWTH
Alex Nicholas
www.cornwalldevelopmentcompany.co.uk/big

10. FUND DETAILS
• £3.6 million ERDF voucher investment
programme delivered by Cornwall
Development Company
• Investments between £1000 and £50,000
• Funds on a 50% match funding basis
• Enquiries through online expression of
interest
• Competitive fund and investment decisions
made by private sector led panel

11. PROGRESS TO DATE
• £3.35M invested, across 185 projects (7/14)
• 95% approval rate for full applications
• Over 438 Jobs forecast to be created by March
2015
• Currently spending at a rate of £100k per
month
• EOIs received £471k
• As we approach completion the best projects
will take preference

12. WHO IS IT FOR?
• Aimed at high value add businesses
• Sole traders to large SMEs
• Operating (or with potential) in National or
International growth markets
• Innovative and competitive products and
services
• Businesses looking to enable and de-risk
investment projects
• Able to create skilled jobs

13. Funding Sweetspots
• Employment (creation /safeguarding)
• VFM
• Additionality /Displacement
• Legacy (causal impact)

14. Rules & Regulations
• Retrospective projects
• Reimbursement at claim /cashflow
• Match funding
• Forecasts
• Audit satisfaction /procurement
• Equality & Diversity strands
• Timescales

15. Eligible Expenditure
• Revenue spend
• Capital spend
• Statutory items
• Working capital
• ERDF no go areas

16. Compiling your Application
• Expression of Interest
• Business needs first grant second
• Urgency /solvency
• Round peg – round hole
• Checklists
• Claim

17. NEXT STEPS
• Check eligibility and download EOI (expression of
interest) at:
www.cornwalldevelopmentcompany.co.uk/big
Phone 01209 617006
• Fund open for applications until December 2014

18. Applying for grant
funds – The
principles (and a bit on
alternative sources)
David Bullen – Corporate
Finance Senior Associate

19. www.francisclark.co.uk
Funding Landscape
• https://www.gov.uk/business-finance-support-finder
• 742 schemes
• Main sources, include
• EU funds (ERDF and ESF) - http://www.francisclark.co.uk/news-views/blog/the-592-million-question-part-1/ &
http://www.francisclark.co.uk/news-views/blog/the-592-million-question-part-2/
• Regional Growth Fund
• British Business Bank - http://www.francisclark.co.uk/news-views/blog/the-british-business-bank/
• Enterprise Capital Funds
• Business Finance Partnership
• City Deals - http://www.francisclark.co.uk/news-views/blog/a-city-deal-of-300m-cutting-through-the-smoke-and-mirrors/

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External Funds – The Sources
Regional Growth Fund
• Monies left behind on dissolution of RDA’s
• £2.4bn
• 2011 to 2015
• Applications > £1m
• Competitive process
• Round 6 opens Summer 2016
• RGF funded schemes for SMEs
• Incl; PWGF1, PWGF 2, GGF+ and Assisted Asset Purchase
• Not sector specific, criteria different for individual
schemes

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External Funds – The Sources
EU
• Convergence: Cornwall 2007 to 2013
• EU (announced June 2013)
Cornwall: €592.9 million (£507 million) between 2014-2020
Devon and Somerset:118 million euros (£100 million).
• Eligibility
Location, Displacement, Quality Jobs, Sector exclusions

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“State aid”
Key phrases
• “De minimis” (< 200,000 euros over 3 fiscal years)
• Block exemption
• Assisted Area
Care
• Other grants
• R&D Tax Credits
• EIS/ SEIS
• Enterprise Finance Guarantee Scheme

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Grants
How to make a successful application…
1. Eligibility
2. Robust Business Case
3. Robust Business Plan (and Financial Projections)
4. Credibility
5. Dialogue with fund holders
6. Understanding their requirements: strategic and operational
7. Need for grant
8. Patience/ Completeness
9. Timeline
10. Understand terms of Offer Letter

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“Business Plan”
• Business case
• Tailor to audience
• Informing v giving away IP
• “Compelling narrative”

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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

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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

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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

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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’

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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%.

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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

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Discussion over
breakfast…
Now…
But
first…

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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…

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