1. 1 Supporting South Tyneside Manufacturers Craig McNaughton Area Director

2. Supporting the North East economy LBG employs 2700 staff in the North East generating £70m+ pa for the local economy LBG employs 2700 staff in the North East generating £70m+ pa for the local economy 115 colleagues locally based & customer facing - dedicated to Supporting 14,000 businesses in the North East 115 colleagues locally based & customer facing - dedicated to Supporting 14,000 businesses in the North East Funding for Lending Scheme supporting plans to achieve over £500m new lending to SME’s in the North East – 4% net lending growth.

3. The Funding Landscape I’ll be covering :  Manufacturing Proposition  Funding for lending – what does it cost?

4. Our Vision  To be the first choice for manufacturers who want a trusted relationship-based banking partner who can offer a one stop shop to professional sector support and business solutions. Our Offer  A trained and accredited relationship manager and local administration team to support day-to-day needs.  Banking services for manufacturer’s long-term financial requirements. Innovative, flexible funding packages to suit each individual business.  Access to specialist teams for asset and export finance solutions.  Access to external professional advice and support to assist business growth.

5. Lloyds Banking Group supporting manufacturers We have extensively consulted with the sector We were told:  No banks were excelling in their support of manufacturers  Banks do not understand manufacturing or the supply chains within which manufacturers operate  There is a need for knowledgeable Relationship Managers and well informed credit sanctioners  The main finance challenges were around access to export and asset backed finance  The bank’s risk appetite should reflect a deeper understanding of sector economic cycles within Manufacturing and the main drivers of successful businesses

6. Our Proposition  Training programme for our Relationship Managers & Credit Sanctioners  Developed with support of the Engineering Employers Association & Manufacturing Technologies Association and delivered by Warwick Manufacturing Group & sector professionals  5 days residential training with site visit and Post module assignment to achieve accreditation  So far 70 RMs trained with a further 30 accredited by the end of this year  North East & Cumbria team of 5 accredited manufacturing Relationship Managers  Our Relationships Managers now have a better understanding and appreciation of the Manufacturing sector, Lean, supply chains and economic cycles  Revised manufacturing credit policy focusing on key growth sub sectors

7. Sources of Finance > £100m Listing £10m - £100m Private Equity £2m - £10m Business Growth Fund £500k - £2m Venture Capital £50k - £500k Business Angels < £50k Friends & Family Traditional finance Banks (overdrafts; loans) Government schemes Specialist Finance Asset Backed Finance Export Finance Invoice Finance Seed and growth capital Business Angels CDFI specialist finance Venture capital Business Growth Fund Private Equity Mezzanine Finance

8. Our Manufacturing Proposition?  Vanilla it’s all “sold out” – solutions will mix term loan, overdraft, Invoice Finance, Asset Finance, Letters of Credit, Export Finance, EFG, EIB money, R&D allowances, Patent Box and Business Growth Funds……  We look harder, for longer, ask more questions, stress test We really like:  Cash generation  Great management  Track record  Security  …to be involved

9. A Lloyds customer Issue: Foreign owned / split banked / cash issues / declining market / extended stock / extended debtors Solutions: Overdraft v ID line Medium term debt (NLGS) R&D allowances “Patent Box” Second cr line from parent company Asset Finance 340k euro

10. Another Lloyds customer Issue: Significant growth planned / new to exporting Solutions: R&D allowances - £55k Export Finance Mezzanine Finance Equity investment UKTI  18months free day to day banking for all start-ups and 6months free for all switchers  261,000 start-ups supported since 2010 – a commitment to 100,000 more in 2013.

11. Are bank’s really lending?  4% net growth (industry down 4%)  Lending to manufacturers up 20%  £13bn lending commitment in 2013 - £1bn to manufacturers.  EFG loans - 28% most active lender (5,000 cases / £375m)  Local decision making up to £500k  >80% of deals agreed - manufacturing trained and accredited credit sanctioners …we ARE!

12. EFG Until the end of March 2013 all EFG pricing will be as per the standard ‘secured’ Funding for Lending pricing. Arrangement fees will also be waived for all EFG loans sanctioned before 31st March 2013

13. Funding for Lending – How much does it really cost? Fully secured term loan borrowing £100k+ from 2.0% over base and 1.6% OB on a fixed rate. 13

14. 14 North East manufacturing team John Curtis Relationship Director Darlington Mobile: 07540818440 John.curtis@lloydstsb.co.uk Andrew Goldsburgh Relationship Manager Teesside Mobile: 07725426427 Andrew.Goldsburgh@lloydstsb.co.uk Stephen Farrelly Relationship Manager Newcastle Mobile: 07725 426417 Stephen.farrelly@lloydstsb.co.uk John McLoughlin Relationship Manager Sunderland & Durham Mobile: 07725426429 John.mcloughlin@lloydstsb.co.uk Manufacturing Awareness Accredited by the Warwick Manufacturing Group Michael Hindhaugh Relationship Director North East Mobile: 07919 301590 Michael.Hindhaugh@lloydstsb.co.uk

15. Ernst & Young Manufacturers’ League 2012

16. Ernst & Young Manufacturers’ LeaguePage 16 What is it?  Setup in 1995 in conjunction with Newcastle Journal and ran for seven years  Re-launched in 2012  Forum for manufacturers in the North East to publicly celebrate all that is good about the industry  Headline sponsors are Lloyds Banking Group and NRG Recruitment  Supported by EEF and Newcastle Journal  Members (companies turning over £1m plus) submit quarterly figures on turnover, exports, apprentices and employment  Top performers published in league table supplement with commentary from the industry on 22 November 2012  Accompanied by preview launch event to celebrate success on 21 November 2012 “The Manufacturers’ League is a really great opportunity to showcase the best of manufacturing in the North East and show the rest of the economy just how strong our manufacturing base is,” Andy Tuscher, Regional Director, EEF.

17. Ernst & Young Manufacturers’ LeaguePage 17 Why should you join?  Competition is crucial to success of the industry  You will join a group of NE manufacturers’ to share success, experience, strategies and knowledge  Build your network of contacts  Strong profile helps support investment attractiveness for North East  Excellent opportunity for your company’s public profile  Size of operations will not affect results as data analysed in relative terms  Data submission process online and easy  No cost to join How to join or find out more?  Speak to the Lloyds Banking Team  Email eymanleague@uk.ey.comeymanleague@uk.ey.com  Or call Simon Whiteside, E&Y Newcastle - 0191 247 2778