1. Funding Inspiration
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2. Funding Inspiration Introduction A2FNW - Funding Options
NatWest - Bank Finance
The North West Fund Overview
The North West Fund for Business Loans
The North West Fund for Development Capital
Entrepreneur - film
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3. Access to Finance
Gaynor Dykes

4. Is finance really available?

5. 3 years accounts
Profitable trading record
Forecast steady growth
Regular, positive cash flow
Experienced owners/managers
Personal commitment
Good credit profile
Healthy order book
Demonstrable market demand
No/limited trading record
Past losses
Very high growth
Erratic cash flow
Unproven owners/managers
No personal risk
Blemished credit profile
Unconfirmed orders
New/unproven market

6. What can I do to improve my chances of success?

7. Preparation
& Information
& Knowledge

8. Preparation Purpose Amount Timescales Repayment Period Stake Security
Costs

9. Information Business Plan Up to date accounts Financial Forecasts
Supporting Information

10. Knowledge What type of finance product? Which provider?
Terms and conditions?
C O N F I D E N C E & C R E D I B I L I T Y

11. What are my options?

12. Debt or Equity? or both??

13. Debt Pros (typically) Cons No surrender of shares
Known repayments and repayment period
Quicker, simpler to arrange
Debts are tax deductible
Cons
Evidence of repayment ability
Personal and business security required
Can be inflexible
Terms, conditions and covenants
Risk of becoming over geared

14. Equity Pros (typically) Cons Equity is risk money.
Appropriate at start-up stage through to maturity
Equity investors can often provide valuable expertise and contacts
Allows flexibility to step change a business
Cons
High growth businesses only that can provide the investor with a return
Investors require a percentage shareholding in return for cash
Investors may require decision making authority
Lengthy process with extensive due diligence
Legal and professional fees
Mezzanine

15. Finance Options Banks Invoice Finance Asset Finance – HP/Lease
Trade Finance
Social Enterprise and specialist finance
Bridging Finance
Commercial Mortgages
Business Angels
Venture Capital
Private Equity
Peer Lending
Finance Options

16. Alternative Finance Options
Small Business Loans £3,000 to £50,000
Merseyside Special Investment Fund
The North West Fund
£50,000 - £250,00 loan
up to £2 million equity
The Social Enterprise Loan Fund - up to £250,000
NW Business Angels £10,000 to £500,000
Enterprise Finance Guarantee Scheme £1,000 to £1million
Regional Growth Fund
Local initiatives
Rural Development Programme
Coalfields Fund
Technology Strategy Board
etc, etc ...
Alternative Finance Options

17. North West Business Angels www.nwbusinessangels.co.uk

18. What help can I get?

19. Private Equity?
£ ?
Public Sector Finance?
Asset Finance?
Loan?
£ ?
Financial forecasts?
Invoice Discounting?
£ ?
Overdraft?
Cash flow £?
Business Plan?
Grant?
Venture Capital?
£ ?
£ ?
Enterprise Finance Guarantee?
Business Angel?
Management accounts?
Bridging finance?

20. Access To Finance – What We Do ‘Matching Businesses with Finance’
Ensure viable Northwest based SME’s are investment ready
Support the process of obtaining appropriate funding
UNIQUE SELLING PONTS:
Impartial
Independent
Credible/Experienced/Knowledgable Team
Complimentary
Free to use

21. Access To Finance – How We Do It
Review financial performance
Discuss business plan & forecasts
Research finance products & providers
Instigate introductions
Support investment process

22. Access To Finance – Contact Details

24. Cashflow & Accessing Finance

25. Turbulent Times ‘There is an increased emphasis on accurate cash
forecasting in a “cash burn”
environment, and encouragement
for imaginative solutions’
Cash Management Spring 2011
A supplement to The Treasurer
Principal Sponsor RBS Group

26. External Risks Raw Material Costs Risk of Bad debts Exchange Rate Risk
Increasing Overheads
New legislation

27. Are we funding Asset Purchases and Working Capital in the right way
Are we funding Asset Purchases and Working Capital in the right way? (at the right time?)

28. Funding Overdraft / Loan Invoice Finance (bad debt protection)
Enterprise Finance Guarantee Scheme (EFG)
NatWest Manufacturing Fund Scheme
Asset Finance
Capital Import Finance
National Loan Guarantee Scheme (NLGS)

29. EFG Scheme
Summary Initiative supported by the Government Businesses with turnover less than £25M Where there is no other security available to the bank and all other funding options have been explored Min loan £1K – 1M. Term max 10 years Purpose ~ funding expansion , working capital or equipment

30. NatWest Manufacturing Fund
Designed to support businesses in the manufacturing sector, this initiative is supported by up to £1bn of funds. 
The fund should be used alongside the existing options of traditional finance, including Lombard and Invoice Finance, to ensure that we provide the best funding structure for our customers which can be accessed on a variable rate or at specially agreed fixed rates.
Purpose of Loan
Loans can be used virtually any purpose and include :
Business acquisitions
General capital expenditure
Working Capital

31. Features Minimum Fixed Rate Loan amount £100,000, maximum £25m
Fixed Rates (3 or 5 year fixture periods) are available; terms must match the fixed rate periods
Fixed Rate Loans are provided on an interest-only basis during the 1st 2 years of a fixed rate period.
Regular capital repayments may be made from the 3rd year of the facility. Such repayment programmes must be agreed at the outset of the loan, & whilst payments may be amortised over longer periods, the commitment will only be for the initial 3 or 5 years.
Loans must be drawn as a single advance; it is not possible to draw the loan in stages.

32. Bringing Back the Cash ‘Trading Internationally brings
new sources of customers & revenues.
However, it also brings specific
Financial risks that need
To be controlled’
Cash Management Spring 2011
A supplement to The Treasurer
Principal Sponsor RBS Group

33. Letter of Credit
Can better use be made of Letters of credit to deliver better terms of supply and payment?

34. Capital Import Finance Scheme
Developed with support of Lombard and RBS Global Transaction Services to create a one stop funding package to acquire Plant and Machinery from abroad
Step 1 ~ After you have selected supplier of equipment Lombard issues a formal conditional offer to finance the equipment through an asset finance facility. Offer valid for 270 days to allow asset to be built , shipped and commissioned
Step 2 ~GTS tailor short term trade finance facility (LoC structure / Import Loan)
Step 3 ~ Once machinery imported Lombard uses agreed asset finance facility to repay GTS.

35. Benefits
Working with GTS the importer, be assured of supplier payment, may have opportunity to negotiate improved terms
GTS can help protect the interests of the importer ensuring payments are only released when contractual obligations are met
Asset Finance agreed upfront is bridged by a LC structure rather than cash being paid out upfront
Payment structure matched to customer needs and help manage budgets with some certainty
End to end solution

36. 546K Manufacturing Fund Loan 382K Capital Import Finance
Undisclosed
2.3M Funding Package
546K Manufacturing Fund Loan
Knowsley based Manufacturer became the first North West business to benefit from the Manufacturing Fund
The Specialist manufacturer needed the funding to help cover the costs of orders worth £2M
It secured 546K loan from the Manufacturing Fund as part of £2.3M finance package which also included finding via the EFG scheme and Invoice Finance
Undisclosed
382K Capital Import Finance
Lombard agreed to finance new manufacturing Line against irrevocable deferred import Letter of credit
Payment against agreed milestones and sight of commissioning certificate
At final maturity date Lombard draw agreed 288K under lease agreement. Balance 94K paid by bank customer

37. National Loan Guarantee Scheme
Access more affordable Business Finance with the National Loan Guarantee Scheme.
What is NLGS ?
The National Loan Guarantee Scheme (NLGS) was launched in the 2012 budget and is a Government backed bond guarantee scheme.
By participating in NLGS banks will offer an equivalent benefit of 100bp to customers who have turnover less than £50M and are within their State Aid limits.
Who is the NLGS for ?
NLGS is for UK Mid Corporate and SME customers who have a turnover of less than £50M and are seen to be making a material contribution to UK economic activity.
Eligibility can include branches of foreign companies with genuine businesses in the UK.
Who is participating ?
Scheme is available through NatWest Commercial and Business Banking and Lombard.

38. NatWest Funds Manufacturing Fund £1B UK Capital Expenditure Fund £1B
Funding for manufacturing sector
Loans 100K – 25M yrs interest only
Fixed rate loans 3 & 5 yrs. 1% arrangement fee
Option for variable rate. Standard fees to apply
UK Capital Expenditure Fund £1B
Lombard Scheme ~ fund acq of Business Assets
Includes joint initiative with GTS ~Capital Import Finance Scheme
Specialist support for import of plant and machinery
NatWest Funds
NatWest Regional Growth Fund £70M
Grant support for eligible Businesses
To support asset purchase where we cannot lend under
normal criteria
Linked to Job creation/ retention
Franchise Fund £100M
2 yrs Free Banking
12m crh
Discounted Arr fees
www,natwest.com/franchise tel
Renewable Energy Fund £50M
Fund targeted at renewable energy market
Managed through the Agricultural Teams
/ Dave Furnival BDD
Community Business Loan Fund £5m
Loans 30K – 500K ~
Eligible ~ Social enterprises, Charity & Community Interest Companies
200K # 1M
Eligible ~ Development Finance Institutions

39. The North West Fund Funding Inspiration Event 7th June
Julie Brook
Head of Marketing : North West Business Finance
Managers of The North West Fund

40. Background
The North West Fund – £185m investment fund from ERDF and EIB
“Gap funding” focused on growing North West SMEs.
Combines financial return with economic benefits.
Designed to create a lasting legacy fund for reinvestment.
Co-investment will increase fund fire power to c£400m.
Must be invested by end 2015

41. FEATURES
Supports funding requirements of growing SMEs through a range of debt and equity finance solutions.
Improve survival of new businesses, assist key sectors in NW
40% for Merseyside, otherwise a broad geographic mandate.
Wide investment range (£50k to £2m) and already matched.
Eligibility – B2B
Create/safeguard 14,000 jobs, generate £700m GVA (£250m by 2015) from investment into around 800 businesses.
Establish a major, single branded NW venture capital and loan fund.

42. Initial allocation (£m)
STRUCTURE
NWBF is a holding fund, managing six experienced Fund Managers, each targeting a discrete segment of the market.
Fund
Manager
Initial allocation (£m)
Development Capital
YFM Equity Partners 45
Venture Capital
Enterprise Ventures 30
Business Loans
FW Capital 35
Energy & Environmental
CT Investment Partners 20
Biomedical
Spark Impact 25
Digital & Creative
AXM Venture Capital 15

43. Equity and debt Funding
Equity funding means minority stakes in our invested businesses
Debt Funding – risk return approach
Investment Fund with a difference – job creation targets and GVA for the region.
Get more than just the money, we have expertise and networks
Rigorous investment process
ERDF and EIB support.
Minimum of £50k
Extended networks for next stage growth

44. Progress to date Dec 2010-April 2012
£23m has been invested into over 95 businesses (inc 18 follow-on)
Co-investment of over £17m has been secured in support of our own investment
Average investment is c£250k
£6.9m of investment in Merseyside into 29 businesses
Strong pipeline of applications currently being assessed or completed
“Out of area” applications account for 12% by number and, in our sector funds, account for as much as 35%
Demand for funding from established businesses being outstripped by early stage businesses
Entrepreneurs from their 20’s to 60+ have been backed so far.
Examples of Merseyside companies we have invested in:
Sentric Music Ltd (Chris Meehan)
Rapid Rhythm (Richard Deed)
Labelsneak (Ade Shannon)
The Liverpool Recruitment Company (Darren Fulton)
Castle Rock Recruitment Group (Ian Munro)
Scraperwiki Limited (Aidan McGuire)
Incanthera (Simon Ward)
Hammerkit (Mark Sorsa-Leslie)
Channel Intellect (Andrew Kitchen and John Shannon)
Med ePad Limited (Rob Connell)
Ambitious Minds (Sean McGuire)

45. Progress to date December 2010-April 2012
Examples of Merseyside companies we have invested in:
Sentric Music Ltd (Chris Meehan)
Rapid Rhythm (Richard Deed)
Labelsneak (Ade Shannon)
The Liverpool Recruitment Company (Darren Fulton)
Castle Rock Recruitment Group (Ian Munro)
Scraperwiki Limited (Aidan McGuire)
Incanthera (Simon Ward)
Hammerkit (Mark Sorsa-Leslie)
Channel Intellect (Andrew Kitchen and John Shannon)
Med ePad Limited (Rob Connell)
Ambitious Minds (Sean McGuire)

46. The Investment process
Visit
Apply online – eligibility check list and application form
Good business plan helps progress to next stage –format on website
The appropriate fund manager should be in touch within a week
From assessment to decision can take from 4 weeks to 6 months - depending on circumstances.

47. Debt Funding and The North West Fund for Business Loans
Funding Inspiration Event 7th June 2012

48. FW capital FW Capital is part of the Finance Wales Group
£387 million of funds under management
FW Capital manages:
£20 million North East Growth Plus Fund
£35 million North West Fund for Business Loans

49. lending criteria Businesses Funding requirement
Established, growing SMEs
Must be a limited company
More than 50% of TO from B2B
Ability to debt-service from day one
Funding requirement
Development/expansion capital
Examples:
Additional working capital
Stock purchases
Owner-occupier property purchases
Plant and machinery
Capital Expenditure

50. LENDING criteria Size of loans Security What do we need? £50k to £250k
Terms up to 5 years
Debenture
Personal guarantees
Realistic Business Plan
2 years Financial projections
Evidence of bank decline

51. case: control valve solutions
Situation
Fast growing company
Working capital required to meet planned and expected growth
No security available for bank to offer extra funding
Action
Company contacted The North West Fund for Business Loans managed by FW Capital
FW Capital undertook due diligence of customer base/sector and management team
Outcome
The North West Fund for Loans through FW Capital provided total funding package
Customer proceeded with its growth plans
Now to take on additional workforce

52. Property Purchase Situation Action Outcome
Purchase of owner-occupied business premises for £1.7m
Customer seeks 75% LTV
Bank’s credit department agrees 65%
Action
The North West Fund for Business Loans managed by FW Capital looking to provide £170k
(10% shortfall)
Outcome
Customer is still able to purchase property despite having an initial £170k cash shortfall

53. Working capital Situation Action Outcome
Growth business requires increased working capital
Bank provides increased ID line
Funding gap for up-front stock purchases
Action
The North West Fund for Business Loans through FW Capital provides £200k
Outcome
Company obtains funding to grow

54. asset purchase Situation Action Outcome
Business needs to purchase kit to fulfil new orders
Business has cash for usual deposit
Bank’s asset finance provider seeks larger deposit
Action
The North West Fund for Business Loans managed by FW Capital funds the increased deposit
Outcome
Customer fulfils orders thereby increasing turnover and profitability

55. Lack of trading history
Situation
New business with 12 months’ trading history
Secures contracts with major retail chain
Requires cash to fund working capital
Bank unable to lend without longer track record
Action
The North West Fund for Business Loans through FW Capital lends against management and contracts
Outcome
Customer is supported to get to the next level of their growth
Customer able to develop a stronger track record with the bank

56. THE Liverpool recruitment coMPANY
Situation
Demand for company’s services growing
Growth capital required to assist with expansion plans.
Action
Company contacted The North West Fund for Business Loans managed by FW Capital
Identified total funding requirement
Structured loan package to suit the needs of the primary funder, The North West Fund for Business Loans and the company
Outcome
£100k loan from The North West Fund for Business Loans through FW Capital invested alongside the primary lender
Company raised total expansion capital required

57. The FW capital team on Merseyside
Simon Berry
Senior Investment Executive
Mobile
Carol Bolland
Investment Executive
Mobile
Stephen Molyneux
Mobile

58. Equity Investment and The North West FUND for Development Capital
Funding inspiration event - 7th June 2012

59. YFM Equity Partners Founded in 1982
Over £350 million of funds under management
VCT of the year 2011
VCT deal of the year 2011
Offices in London, Leeds, Manchester, Bristol, Sheffield and Liverpool
Over 50 employees
Portfolio of over 200 companies
The UK’s most active equity investor in small businesses*
* Source: Private Equity Insight - based on the number of deals completed between £100k and £10m in the five years to May 2011

60. The case for TAKING Equity investment
Equity funding is the only way to “step change” a business.
Banks lend on certainty – assets, contracts and past performance - limiting appetite.
Equity invests on potential, ambition and future value - hence has “no limitation”.
Equity is more patient and more forgiving.
You get more than “just the money”.
Don’t think in terms of “giving up a slice of the cake”; rather think “how big can I make the cake?”
Equity investment should be seen as a “badge of honour” and not a sign of failure.

61. The development capital fund - The Approach
Looking to invest in growth
Investing in new equipment or innovation
Developing new markets or geographies
Expanding workforce
Working capital funding
Business characteristics
£1m to £20m turnover
At or near profitability
Sensible gearing levels
Capable and ambitious management teams
Two products – Mezz & Equity

62. The development capital fund – MEZZ
Investment £0.25m to £1.2m per round
12% interest, up to 10% equity option
Repayment up to 7 years
Simplified legal agreement
Company
Established businesses over 5 years trading history
Cash generative and generating at least £250k net profit

63. The development capital fund – Equity
Equity (minority stake) and loan stock
Bespoke to company’s individual funding requirement
Investment £0.1m to £1.2m per round
Company
Profitable
Fast growing business

64. Our last four investments

65. YFM Equity partners in the north west
Joseph Bergin
Deborah Heyes
Simon Cleaver
Paul Gower
Matthew Male
Jerry Scriven
Ian Waterfield
Sarah Riley
Manchester T Liverpool T E

66. Risks to consider
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 is addressed only to ‘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 Limited.
YFM Private Equity Limited (FRN :122120) and YFM Venture Finance Limited (FRN:224728) are authorised and regulated by the Financial Services Authority. They are wholly owned subsidiaries of YFM Equity Partners Limited which is part of the GLE Group of companies. YFM Equity Partners Limited is registered in England and Wales, Co No Registered office: Saint Martins House, Chapeltown Road, Leeds LS7 4HZ.

67. SUMMARY
Potentially £400m of investment capital targeted at SME growth.
Must be invested by end 2015.
Comprises six Fund Managers with extensive relevant experience.
Opportunity for North West SMEs to capitalise on this funding to generate prosperity and employment.
Can stimulate ambition to allow owners and managers the potential to step change their business.
Building on expertise that already exists to create an enduring legacy.
The North West Fund is inspiring entrepreneurs.
We are looking to inspire more.
Examples of Merseyside companies we have invested in:
Sentric Music Ltd (Chris Meehan)
Rapid Rhythm (Richard Deed)
Labelsneak (Ade Shannon)
The Liverpool Recruitment Company (Darren Fulton)
Castle Rock Recruitment Group (Ian Munro)
Scraperwiki Limited (Aidan McGuire)
Incanthera (Simon Ward)
Hammerkit (Mark Sorsa-Leslie)
Channel Intellect (Andrew Kitchen and John Shannon)
Med ePad Limited (Rob Connell)
Ambitious Minds (Sean McGuire)

69. Funding Inspiration Master Class
2nd July 2012
Liverpool Chamber
Through special application and assessment only through these taster events, please take an application form or apply on line at
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70. Funding Inspiration Master Class 2nd July – Liverpool Chamber of Commerce
How to attract a lender or an investor
How to make a strong case for funding
How to produce a credible and readable business plan
Preparing and presenting your financial information.
Understanding legal terms and conditions of funding.
Free
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71. Thank you for attending
Funding Inspiration
Thank you for attending
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