Finance in Cornwall 2014 Segment 3

Scott Bentley - Partner
Finance in
Cornwall 2014
Confidence returns…

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)

Of general interest
• Banks
• “Alternatives”, inc Crowdcube
• Asset Finance
• Business Support x 4
• Business planning and projections
• Company presentation
• Networking

Richard Wadman –
Corporate Finance Director
Banks… and
alternatives

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

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)

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

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

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/

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

Asset Finance
Ian Hughes
Corporate Manager

Asset Based Lending
What?
• Debt secured on asset/ assets
Assets?

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

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

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

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

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

 “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

 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

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

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%

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

Michael Wilkinson
Investment Manager
Michael@crowdcube.com
@MW_Crowdcube
www.crowdcube.com

Grow Cornwall Programme
Alan Street

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

Cornwall
Wales
Northumberland
UK wide via Growth Accelerator
Middle East & Africa
Current Operations

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

Grow Cornwall - Offer
Up to 30 days of fully funded coaching / mentoring

Strategy
Exit Planning
Coaching
Sales and
Marketing
Grow Cornwall
Finance
Leadership
Vision & Values
Operations

Grow Cornwall – Compelling Differences
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

Grow Cornwall – Key Benefits
Critical friend
Challenge to achieve more
Speed
Avoid costly mistakes
** Learning **

Who is eligible?
Key sectors
Existing and Start-Ups
Robust Business Model
Ambition and Potential for growth
Generate graduate calibre employment
Enrich the Cornish economy

Some examples
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

Ignite 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

Summary
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

Learn More:
www.growcornwall.co.uk
www.ignitecornwall.com
Thank you for your time

41 Presentation title - edit in the Master slide
Exporting for Growth
Colin Piper – International Trade Advisor

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
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)
43

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
44

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

MANUFACTURING ADVISORY SERVICE (MAS)
Clive Turner
Finance Cornwall event
Newquay
13th May 2014

CONTENTS
• MAS Core Services. Funded support
• Product Development Centre. Funded support
• Offshore Wind. Funded Support

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)

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

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

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

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

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/

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

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

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

Plymouth University
Supporting businesses to grow
Mark Smith

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.

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

Creating Business Environments
Innovation Centres:
spaces to accelerate growth
Formation Zones:
where great ideas start

Driving Innovation
Knowledge Transfer Partnerships & graduate internships

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

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

Business Plans
and Financial
Projections
Richard Wadman –
Corporate Finance
Director

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

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

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

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

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’

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/

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

Background
UKNetWeb – 15yrs Websites through to Ambitious technical Cloud Apps
Headforwards – 3yrs Currently contracted to NTT, 38 staff
#FCFinanceCornwall

Cornwall’s Geographical Location
3-5hrs from London
Or
16 milliseconds
#FCFinanceCornwall

Tech Futures
Tech Start Ups – fast growing, dynamic, extremely high growth
Transformational projects for existing companies
#FCFinanceCornwall

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

Thank you
Toby Parkins
@tobyparkins

F
Finance in the
Cornwall 2014
As business confidence
returns…
Scott Bentley- Partner

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

Presenters and other participants
…and more

But before you go…

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

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Finance in Cornwall 2014 Segment 3

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