debt, equity and rewards - pkf-francisclark.co.uk · • debt - lloyds bank ... for smaller...
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F I N A N C E I N 2 0 2 0
Debt, Equity and Rewards
DEBT, EQUITY AND REWARDS
• Investor Ready - PKF Francis Clark
• Rewards - Crowdfunder
• Debt - British Business Bank
• Debt - Boost
• Debt - Capitalise
• Debt - Lloyds Bank
• Debt - SWIG Finance
• Debt - Folk2Folk
• Debt - Ignition Credit
• Debt/ Equity - CIOSIF
• Equity - Mylor Ventures
• Equity - BGF
• UK Government support - PKF Francis Clark
PKF Francis Clark, Nick Tippett
INVESTOR READY - STEP 1
Understand the funding options AND look for a match with your requirements
Understand your
requirements
Understand funding
options and funders
requirements
INVESTOR READY - STEP 2
Be PREPARED
• Documents
• Business plan
• Financial projections
• Housekeeping
• Licences / contracts?
• IPR ownership in the company?
• Books and records in order?
• VAT, PAYE/NI
• Statutory Accounts/management accounts
• Other fund/funder specific requirements
• Dedicate time and resource to the process
• Take expert advice (if applicable)
• Understand deal breakers
Crowdfunder
June 2020
6
Meet the Crowdfunder team
Rob Love
Chief Executive
Officer
Phil Geraghty
Chief
Crowdfunding
Officer
Simon Deverell
Creative director
Dawn Bebe
Director of
communications and local
partnerships
Founding partners
Alex Hook
Non exec director,
Head of Investment
at Nesta
Caroline Norbury
Non exec director,
CEO Creative
England
Andy Medd
Co-founder of Broody
and Founder at Mother
On the board and Shareholders
Pippa Dunn
Co-founder of
Broody, Ex CMO at
EE
7
£87,095,603We’re the UK’s biggest rewards-based crowdfunding
platform, unlocking millions more from our partners
242795total projects added
50,000+visits daily
300projects added daily supporters have pledged money
Up t
o
1 million+
Over 70 partners
Our numbers
8
We recognise that government, charity and
philanthropy are not enough to tackle society’s
challenges on their own and that grant giving in the
UK is in need of radical transformation.
We believe passionately that business should be
good and that we can help lead the way by building a
new generation of social entrepreneurs.
We believe that everyone in the UK is a
philanthropist in the making and they should have the
power to make positive change in their communities.
We know crowdfunding makes ideas happen and
together we might just change the world!
We enable change
across the UK by
funding the projects
that matter
9
Crowdfunder exists to
tackle society’s challenges
by making ideas happen
Our purpose
| 9
www.british-business-bank.co.uk
@britishbbank
10
www.british-business-bank.co.uk
@britishbbank
11
Our 6 objectives (pre Covid-19)
* New objectives from April 2018
Increase the supply of finance
to smaller businesses where markets don’t work well
Help to create a more diverse finance market
for smaller businesses, with greater choice of options and providers
Identify and help reduce imbalances in access to
finance*
for smaller businesses across the UK
Encourage and enable SMEs
to seek the best finance suited to their needs
Be the centre of expertise on smaller business finance in the UK*
providing advice and support for Government
Achieve the Bank’s other objectives whilst
managing taxpayers’ money efficiently
within a robust risk management framework
1 2 3
4 5 6
www.british-business-bank.co.uk
@britishbbank
12
Our success – last 5 years (Pre- Covid)
Increase the supply of finance
Help to create a more diverse finance market
Encourage and enable SMEs to seek the best finance suited to their needs
Achieve this whilst managing taxpayers’ money efficiently
1 2 3 4
www.british-business-bank.co.uk
@britishbbank
13
Some of our partners active in the South West
www.british-business-bank.co.uk
@britishbbank
14
Regional fund in South West – (www.ciosif.co.uk)
£400m+
£250m+ £40m+
www.british-business-bank.co.uk
@britishbbank
15
Start Up Loans: www.startuploans.co.uk
www.british-business-bank.co.uk
@britishbbank
16
The Finance Hub
Our Finance Hub has been built to help businesses understand and discover the finance options that could enable them to grow.
www.british-business-bank.co.uk/finance-hub/
www.british-business-bank.co.uk
@britishbbank
17
The Finance Guide
Our Finance Guide has been developed with the ICAEW to help businesses access the right form of finance to push forward.
https://thebusinessfinanceguide.co.uk/business-finance/
www.british-business-bank.co.uk
@britishbbank
18
New Schemes & Future Fund
Source: British Business Bank December 2018
www.british-business-bank.co.uk
@britishbbank
19
Recent impact (April-June 2020)
Source: British Business Bank December 2018
We nowsupport more than
£35bnof finance to business
over
180partners
now delivering our programmes800,000
businesses supported
over
www.british-business-bank.co.uk
@britishbbank
No representation, express or implied, is made by British Business Bank plc and its subsidiaries as to the completeness or accuracy of any facts or opinions contained in this presentation and recipients should seek their own independent legal, financial, tax, accounting or regulatory advice before making any decision based on the information contained herein.
No part of this presentation should be published, reproduced, distributed or otherwise made available in whole or in part in any jurisdiction where to do so would be unlawful.
British Business Bank plc is a public limited company registered in England and Wales registration number 08616013, registered office at Steel City House, West Street, Sheffield, S1 2GQ. As the holding company of the group operating under the trading name of British Business Bank, it is a development bank wholly owned by HM Government which is not authorised or regulated by the Prudential Regulation Authority (PRA) or the Financial Conduct Authority (FCA).
It operates under its own trading name through a number of subsidiaries, one of which is authorised and regulated by the FCA. British Business Bank plc and its subsidiary entities are not banking institutions and do not operate as such.
A complete legal structure chart for British Business Bank plc and its subsidiaries can be found at www.british-business-bank.co.uk.
Finance in 2020: CBILS and BBLS
Products through and beyond
PRE-COVID CRISIS RECESSION RECOVERY
GRANTS, SSP, HMRC
JOB RETENTION
CBILS and BOUNCE BACK LOANS
LENDING COMMERCIAL LENDING
INCOME SUPPORT
GRANTS
BOOK A CONSULTATION AT CAPITALISE.COM
● What is is?
○ £50,001 -£5m
○ 25% of 2019 t/o
● Who is providing it?
○ 83 lenders
○ 48 accredited
○ 24 with Capitalise
○ Very limited marketplace
as most lenders are only
supporting existing clients
● What Information is required?
○ Banks - extensive
○ Alternatives - basics
● Is my business ‘viable’
○ 1.5-2x Retained Profit
CBILS Marketplace
20 lenders offering Bounce
Back Loans.
As a lending product without
an underwriter comes with lots
of declarations!
Applying for
Bounce Back
Loans
Engaged in trading or
commercial activity
Not part of a wider group which
has received a Bounce Back
Loan/ CBILS
Not a bank or building society,
insurance, public sector or
individual in a partnership
Not subject to a debt relief order
or IVA, an undischarged
bankrupt nor in liquidation
More than 50% of revenues
derived from my/our business'
trading activity
Use credit granted only to
provide economic benefit to
my/our business
Not a business in difficulty on 31
December 2019 (e.g. debt/equity
7.5 & serviceability)
Not have the benefit of the
protection and remedies that
would otherwise CCA 1974
@CAPITALISERS See capitalise.com/covid19/bounce-back-loans
We have had >£12m of offers across Banks
and Alternatives in the last 6 weeks - CBIL
We can access CBILS for Term Loans,
Invoice Finance and Asset Finance.
E.g Close Brothers - £500k
E.g Hitachi - £5m ID Line ‘top up’
What we’re seeing~14 days
Response time for a
decision
40%
Acceptance from
application to lender
Profitable
businesses
Must be viable
Loan types
Mostly £250k+ and
Term Loans only
CBILS
CONTACT
Sinead Johnson
07884 696637
https://growth-lending.com/
Lauren Couch
07784 237 245
https://growth-lending.com/
WHO ARE GROWTH LENDING?
Growth Lending are a group of specialist working capital providers, working with innovative and
high-growth SMEs, helping them to accelerate their growth by providing flexible credit solutions.
GapCap provide £100k-£3m invoice
finance and supply chain finance solutions
for innovative SMEs.
KX Media Capital are a global working
capital provider to the digital media,
marketing and technology sectors.
BOOST&Co provide £2m-£20m term loans
and working capital facilities for high tech,
high growth SMEs.
WHAT IS CBILS?
CBILS can help SMEs that have lost revenue and had cashflow disrupted as a result of the COVID-19 outbreak. Funding is not provided by the
government directly but from accredited lenders. This scheme was created to provide financial support for smaller businesses. The government
guarantees 80% of the loans covered by the scheme and covers the interest and fees of the facilities for the first 12 months. The borrower
remains fully liable for the debts.
• They’re a PLC, Limited company or LLP registered in the
UK.
• Has been adversely affected by the COVID-19 crisis.
• Turnover must not exceed £45m
• One or more of the company’s director’s lives in the UK.
• The business’ application would’ve been viable prior to the
pandemic.
Eligibility Criteria
• The business is not in one of the below sectors:• Banks, insurers and reinsurers (but not insurance brokers)
• Public-sector bodies
• State-funded primary and secondary schools.
• Construction
• As at 31st December 2019, the business wasn’t classified
as a “business in difficulty”: • A business is in difficulty if, it was more than 3 years old and had
accumulated losses of more than 50% (subscribed share capital),
had entered into administration or a CVA or had previously received
rescue or restructuring aid from the Government or European Union. A
business needs to fulfil only one of these criteria to be a business in
difficulty.
CBILS ACCREDITATIONG R O W T H L E N D I N G
Revolving Credit Facility Invoice Discounting Term Loan
Flexible line of credit, unlocking funds tied
up in your balance sheet, strengthening
working capital.
Invoice discounting facility allowing you to
leverage your sales ledger, boosting your
cashflow position.
Loans designed to extend the funding runway
& providing capital to achieve next level of
growth.
KEY TERMS KEY TERMSKEY TERMS
• Funding Limit: £100k-£5m
• Contract Length: 2-3 years
• Interest: 6-14%pa (plus fees)
• Security: first ranking debenture
• Funding Limit: £100k-£5m
• Contract Length: 2-3 years
• Interest: 6-14%pa (plus fees)
• Security: first ranking debenture
• Funding Limit: £750k-£5m
• Contract Length: 5 years
• Interest: 6-14%pa (plus fees)
• Security: first ranking debenture
We have been accredited by the British Business Bank for 3 products, to suit the
different needs of UK SMEs.
REVOLVING CREDIT FACILITY I N F O C U S
Growth Lending’s Revolving Credit Facility explained
The Revolving Credit Facility is a flexible credit line unlocking funds
tied up on the balance sheet, strengthening working capital. Whilst
this is not a "receivable" finance product, the size of the aged
receivable and stock balances, along with any other unencumbered
assets will be taken into account in the facility size decision.
How is the facility size determined?
The highest of 1) twice the annual wage bill in 2019 or the last
audited accounts available (including social charges and the cost of
subcontractors/consultants), 2) 25% of total turnover in 2019 or 3)
the liquidity needs of the company for the coming 18 months (its
liquidity plan can include both working capital and investment
costs). Internally, asset coverage will define our maximum limit.
What is the fee structure?
An interest rate on drawn funds of 6%-14%pa depending on the
size/risk of the facility. There are supplementary charges which
include a registration fee of up to 2.5% of the facility size and a 1%
annual facility fee. The government covers all fees for the first 12
months.
Are clients able to terminate their loans early?
Yes – clients can repay the loans whenever they wish during the first 12
months with no penalty. Thereafter there is a small repayment fee.
Is the RCF a fixed amount or is it a set % of aged receivable/stock?
The facility limit is fixed. We take into account the average level of
each company's AR and stock levels along with and other
unencumbered assets when reaching the facility limit.
TERM LOANI N F O C U S
Growth Lending’s Term Loan explained.
Loans designed to provide an extended funding runway & providing
capital to achieve next level of growth.
How is the facility size determined?
The highest of 1) twice the annual wage bill in 2019 or the last
audited accounts available (including social charges and the cost of
subcontractors/consultants), 2) 25% of total turnover in 2019 or 3)
the liquidity needs of the company for the coming 18 months (its
liquidity plan can include both working capital and investment
costs). Internally, asset coverage will define our maximum limit.
What is the term of the facility?
Our facility terms are up to 5 years however you are able to terminate
the agreement with no termination fees within the first 12 months.
What is the fee structure?
We have an interest rate on drawn funds of 6%-14%pa depending on
the size/risk of the facility. There are supplementary charges that
include a registration fee of 0.5%-2.5%. All fees within the first 12
months are covered by the government.
Is the loan released in tranches?
The loan is available in up to four tranches - the first drawdown is
available immediately and the rest available from 18 months
thereafter.
What is the amortization profile of the loans?
The loans amortize at 6% in year 1 and then on a straight line
amortization thereafter.
INVOICE DISCOUNTINGI N F O C U S
Growth Lending’s Invoice Discounting product explained.
Our CBILS invoice discounting facility releases funds tied up on your sales ledger, boosting your working capital position.
How is the facility size determined?
The facility limit will be agreed post due diligence and will range
between 70-90% of the aged debtor balance.
What is the term of the facility?
Our facility terms vary from 24 to 36 months however you are able to
terminate the agreement with no termination fees within the first 12
months.
What is the fee structure?
There are two ongoing fees for with our invoice discounting facility. A
service fee which is charged against the assigned turnover - this will
likely sit between 0.5-1% - and a discount rate which is charged
against the outstanding balance of the facility - this will be between 4-
8%pa. The APR of the facility to the borrower will be up to 14%. All fees
within the first 12 months are covered by the government.
Is this a full ledger facility?
This is a full ledger invoice discounting facility however we will be
flexible on excluding certain debtors depending on the circumstances.
Does the facility include export debtors?
Yes we are able to include export debtors within the facility however we
restrict certain countries.
Finance in 2020: Market update etc.
Products through and beyond
PRE-COVID CRISIS RECESSION RECOVERY
GRANTS, SSP, HMRC
JOB RETENTION
CBILS and BOUNCE BACK LOANS
LENDING COMMERCIAL LENDING
INCOME SUPPORT
GRANTS
BOOK A CONSULTATION AT CAPITALISE.COM
Important updates &
announcements
CBILS UPDATE
The marketplace is opening up and more
flexibility is being shown
Businesses with a BBL can now refinance this into a
CBILS. You can have multiple CBILS, both as loans,
AF and IF across any number of accredited lenders.
Surveyors can go back to value property, which means that
the property market has officially re-opened 🎉
Materiality clause, on the 19th May RICS members
discussed if it is now appropriate to remove - this means
valuations now carry full liability.
The Economic Secretary, John Glens announced a new
reinsurance scheme for credit insurance, which unlocks
traditional lending beyond government schemes 💚
Questions
MARKET UPDATE
● Clearly the lending landscape has changed dramatically and government back schemes
are now dominant - over £30bn lent so far.
● BBL, up to £50k, 100% government backed guarantee - just a declaration from the
directors - really important that the declaration is fully understood. No underwriting from
Lenders - money in 48 hours.
● CBILS - 80% gty - full underwriting required -
● Can only have one scheme at anytime - so important to fully understand cashflow
requirement and also that it is not free money - it will need to be repaid.
● Beyond government support we have secured lending, valuations are now back with
standard LTV returning and people are spotting opportunities in the marketplace.
● Invoice Finance - a really fundamental product to allow clients to trade back up to pre-
covid levels as this will take significant working capital.
● Merchant Cash advance for retail now all non-essential shops are open. Allows clients to
borrow based on card turnover.
● Asset finance - people need new equipment - delayed purchases and orders due to initial
uncertainty and manufacturers being closed or having very limited output.
An overview of recent
developments and how we will
be looking to provide funding to
support businesses during the
post covid-19 recovery
Questions
MARKET UPDATE
● Ensure they understand exactly what their funding gap and requirement is. Is a £50k BBL
enough or does the business require longer term ongoing support such as that which can
be provided through IF.
● Have all the documentation and information available from the outset - especially if they
are looking for a CBIL from their Bank lender.
● Have a clear expectation of what debt the business can actually service. Businesses do
have a tendency to overestimate what they can borrow.
● If the client is looking for a property purchase, be it a commercial mortgage, BTL or
development they need to ensure they have the appropriate cash stake. Usually around
30% as well as taking into account associated costs and timescales.
● If there is affordability it is always better to borrow slightly more than slightly less, as
there are no early repayment figures on the loans.
● Plan in advance. Depending on the complexity of the deal it can take a significant
amount of time for deals to complete. Most transactions where tangible security is
required take 3 months to draw.
● You are 4x more likely to secure the right funding through using your accountant than
trying to go direct.
Top Tips for potential
applications looking to
secure funding to support
their recovery
Questions
MARKET UPDATE
Important for businesses and advisors to realise that BBL/CBILS has
just been designed to ensure clients have enough cash to survive
this period, not as free money that will last forever.
“Seems almost half of UK businesses will run out of cash within 6
months despite all government schemes, according to ONS survey
results.
It showed that 44% of the 18,506 responding firms said their
reserves would last for less than 6 months, with 24% unsure how
long they would last and 4% reporting no spare cash.
Only 27% said their reserves would last beyond six months.” FT
The importance of funding
for SME’s post covid.
Classification: Public
Data as of 3rd June 2020
• Bounce Back Loans – 162K+ Approved, to the value if £4.9bn
• Coronavirus Business Interruption Loans - 7,492 approved, to the value of over £1.3bn
• Supported our business customers by agreeing agreed more than 47,000 fee free overdrafts, capital repayment holidays and deferred payments.
Lloyds Bank Coronavirus Support Page, Click Here
Classification: Public
Information required when applying for finance: *not limited to
• Amount required – A cash flow forecast will help establish the amount needed for working capital
• Three years Full Trading Accounts
• YTD Management Accounts, Profit & Loss and Balance Sheet
• Details of existing finance commitments – monthly payments, balances and maturity dates. i.e. HP Schedule
• Personal Statement of Assets and Liabilities
• What actions has the business taken to ease cashflow during the pandemic i.e. secure grants, furlough staff or cut back on expenditure
Classification: Public
Solutions Available: web links (right click and select open link)
• Bounce Back Loan (BBL) • Lloyds Bank• British Business Bank
• Coronavirus Business Interruption Loan (CBIL) • Lloyds Bank• British Business bank
• Asset Finance • Lloyds Bank AF
• Invoice Finance/Discounting • Lloyds Bank ID IF
We are:
• A not-for-profit company• Established 1989• FCA Regulated• A Responsible Finance Provider• Offices in Truro, Exeter and Bristol• Trustees from Cornwall Council, Cornwall
Chamber of Commerce, Devon County Council, Gloucestershire First LEP, Barclays and Lloyds banks.
SWIG Finance – Who are we?
SWIG Finance provides loans from £500 – £250,000 to viable start-ups and established SMEs based in Cornwall, Devon, Somerset,
Bristol, Dorset, Wiltshire & Gloucestershire.
SWIG Finance – Why are we different?
• Our decisions are made by people not computers
• We can often lend when the bank can’t
• We treat each business individually
• We lend to startups and established businesses
• We are the largest SUL provider in the South West
• We are an accredited CBILS lender
SWIG Finance – Facts & Figures
2019>>2020 Lending Breakdown
Businesses
Supported
403
Amount
Invested
£6.5m
Social Impact
£12m
Jobs Created
& Safeguarded
561
Female Lending
39%
Avg Loan Size
SWIG £44k
SUL £12k
CIOSIF £37k
Under 45’s
Lending
77%
SWIG Finance – Case Studies
Little Kitchen
Investment amount: £60,000
Sector: Food Production
Use of funds: support business continuity during COVID-19
“We were really happy with the service provided by SWIG
Finance. Our dedicated Business Manager, Nicola Mapp,
was supportive throughout. The application process was
straight forward, and the funds were released quickly”.
Green Cow Dairy
Investment amount: £40,000 (£20k each)
Sector: Dairy Farm
Use of funds: to buy a milk bottling plant
“The Start Up Loans we received with the help of SWIG
Finance has enabled us to spend more time on the business
and accelerate business growth. Sarah was very supportive
throughout the process”.
Business Loans Start Up Loans
SWIG Finance – Our Partners
SWIG Finance – Contact
To speak with one of our friendly and professional business managers please contact:
01872 227 930
• We are a local lending company,
facilitating secured loans for business
purposes
• A secured loan is when you borrow
money which is secured against an asset
you own.
• FOLK2FOLK loans are secured against
your land or property
WHAT
WE
DO
WHO
WE
HELP
1. Businesses that want to grow and develop
2. Businesses that want to diversify
3. Borrowers that need to bridge a gap
4. Borrowers with unusual/diverse income streams
5. Business owners looking to release equity
6. Those deemed ‘too old’ by the bank
7. Those who don’t meet standard lending criteria
8. Property development, purchase & construction
9. To facilitate partnership break-ups
10. To refinance
WHY
CHOOSE
US?
• We have injected over £360m into
businesses (£17.3m during lockdown)
• We take an holistic approach to assessing
borrowers
• We only offer interest-only loans
• We lend for almost any business purpose
• Loans in weeks not months
Loans for almost any business purpose
• AMOUNT: From £50k
• TERM: 6 months - 5 years
• RATES: Typically 0.54% p.m.
• LTV: Max 60% LTV (Market Value)
Fees and conditions apply. The property against which your loan is secured could be at risk if you do not meet payments.
WHAT
WE
OFFER
Ignition & STAR Asset Finance
• Founded in 2005, Ignition Credit have helped arrange over £450 million forbusinesses, either through our own funds or via joint trading relationshipswith a panel of major finance houses.
• Customer service is the key to our success with c.80% of our customersreturning for additional funding support.
• 1st April 2015 Ignition was acquired by STAR Asset Finance. STAR AssetFinance are owned by STAR Capital Partners a leading European FundManager, with offices in London, Coleshill (Midlands), Norwich,Bournemouth and Truro.
• 2019 Ignition were awarded ‘7th Fastest growing Company in the SouthWest’
• 2020 have been shortlisted for ‘Deal of the Year’ by NACFB
• 2020 Approved Broker for British Business Bank CBILS products
Asset Finance
Hire Purchase
Leasing
Supporting Investment
Small Business
Medium Size
Enterprises
Large Companies
Public Sector
What is Asset Finance?
A market solution to a market failure in
the SME market
“British Business Bank”
Helps Cashflow
Update Obsolete
Equipment
Security taken on the asset
Frees up capital
Benefits of Asset Finance
What Can We Finance?
Asset Finance can assist in financing any moveable asset. The main types of assets we finance are:
• Cars and Classic/Prestige Cars• Motorbikes• Vans, LCV’s, HGV’s, Bus & Coach• Construction • Agricultural• Engineering • Technology• Catering Equipment • Refurbishment & Fit-Out Finance• Refinance of existing assets • The list is endless
Asset finance statistics
The latest report from The British Business Bank (BBB), 2018 SME Business Finance Survey, showed that asset finance new business of £18.9 billion went to SMEs in 2018, 3% higher than in 2017. Highlights from the 2018 report include:
• Leasing / hire purchase was the most common type of finance sought by SMEs.
• Awareness of leasing / hire purchase is high among SMEs surveyed reaching 89%.
• Awareness of providers of asset finance also increased to 53%.
• A third of SMEs sought finance to purchase fixed assets.
• Avoiding additional debt and fear of rejection are the main reasons for SME’s not applying for finance.
Ignition’s Product offering
• CBILS Approved Broker
• Leasing
• Lease Purchase
• Hire Purchase – Regulated and Non regulated
• Loans
• Invoice Discounting
• Merchant Loans – via your credit card machine
• An excavating Contractor based in Cornwall“as the business has grown, we’ve needed to invest in more equipment vehicles, andcan always rely on Ignition to provide us a good deal and great service. The team are Fantastic. The make the whole process easy!”
• A survey equipment supplier based in Dorset and Devon“Fortunately, the Ignition team is always available to help us. All it takes is a simple phone call, and we know a decision will be made and finances arranged swiftly.”
• A professional marine and land based civil engineering business based in Devon“Ignition offer excellent all-round service but what really stands out is their speed and efficiency. Dealing with them is effortless and seamless. I wouldn’t bother tryingany other finance provider now, as I can always trust ignition to give me agood deal and get the job done quickly”.
What do our customers say?
• Asset Finance can assist in financing any moveable asset (hard or soft) from Cattle to Cars.
• Dealer or Customer routes to market.
• Finance agreements can be tailored to business needs, with flexibility of terms & repayment schedule.
• Typical finance amounts range from £1k to £1m+
• Security generally taken on the asset alone, depending on the asset & covenant of borrower.
• Quick & easy to put asset finance in place.
In Summary
For more information please contact:
Paul Caunter01872 272900
www.ignitioncredit.co.uk
Cornwall & Isles of Scilly
Investment Fund (CIOSIF)
Loan Funding
CIoS Investment Fund
Mission: to invest £40million into high growth Cornish
businesses in order to enable sustainable economic growth
Supporting ambitious and growing SMEs
Creating jobs across the CIoS region
Promoting new product development and innovation
Leveraging private investment (match funding)
Working with the wider finance community and partners
Loan Funding Available
Loans from £25k up to £1m
Loan term up to 5 years
Capital Repayment Holiday Available
Security: typically debenture & personal guarantee (partial)
Dedicated Fund Manager
Forward looking assessment
New flexibility around investment into the tourism, hospitality, and
leisure sectors, looking to assist business in these important sectors
within Cornwall & IOS that are seeking to grow
Use of Funds
Example of Debt Deals
IsoSpaces
Investment amount: £450,000
Sector: Off Site Modular Spaces
Use of funds: new staff, infrastructure, equipment and
marketing
Caterbook
Investment amount: £131,250 (2 tranches)
Sector: Property management software
Use of funds: testing & Marketing
Contact
Brent Treloar
Or
www.ciosif.co.uk
Raising Equity Finance:
What’s the reality?
CIoS Investment Fund
Ralph Singleton
Head of Funds , Cornwall
CIoS Investment Fund
Mission: to invest £40million into high growth Cornish
businesses in order to enable sustainable economic growth
Supporting ambitious and growing SMEs
Creating jobs across the CIoS region
Promoting new product development and innovation
Leveraging private investment (match funding)
Working with the wider finance community and partners
CIOSIF Equity Investments
Amount: £50,000 – £2million (excluding
matched private investment)
Co-finance required
Security: generally none
Arrangement fees, monitoring fees and legal
costs apply
Board observer, right to appoint a NED and
various consent rights
High growth potential SMEs
Credible business strategy with view of exit
Viable product/service; compelling market
opportunity
For activities that deliver substantial growth
impact including:
Sales & marketing activity
Hiring new staff
New product development
5 year exit strategy (longer for earlier invs?)
KEY FEATURES ELIGIBILITY
Why Equity and what we look for…
Early stage businesses where debt funding is not
suitable.
Great team – ideally with prior experience and
clear strategy to realise vision.
Scalable business model
In a sizeable market and/or niche “addressable”
market with early revenue promising but not yet
established.
Need for Growth Capital, typically used for
product development, key hires and international
expansion.
Obvious early identifiable exit route.
… and what is less interesting
A virtual business – that is unproven but looking for cash to get started.
Technology which is difficult to understand (Buffet) - and claims to have no
competition
Consultancy businesses that want to become product companies - can often
take longer than expected to deliver product and growth
Hobbyist solutions - often have limited commercial growth opportunities (narrow
markets)
Over optimistic forecasts (the J curve or hockey stick) - that lead to
underperformance during early phase of growth
Excessive valuations - making it difficult to raise equity in subsequent rounds
Pre revenue and excluded ERDF sectors – Most pre revenue investments fail
Co – Investors & Exit strategy
Co-Investors
Need independent matched investment
Can accept 20% of total raise from existing or connected parties
Can introduce like minded institutional investors
FSE Angel Network see all CIOSIF investments – free to join
Happy to work with other angel networks
Will work with Crowdfunders as cornerstone investor (but on our terms) or with corporate investors – must
have same investment criteria
Exit Strategy
Investors won’t come in until the way out is clear.
Want to buy an asset that someone else wants to buy
Good companies with good cash flow will be easier to exit either via buy back or trade sale
The best reason for an exit strategy is to plan how to optimise a good situation – peak of hope!
Clarifying growth trajectory and exit point is key.
Summary - 5 key Criteria for investment
1. Market – growing, desirable, right time & high barriers
to entry(IPR, exclusivity, niche)
2. Offering – compelling market proposition &
differentiated
3. Business model – viable & scalable
4. Co-finance – is all co-finance in place?
5. Team – risk/reward, capability & composition
Angel Network: MyVAN
Introduction
• Mylor Ventures Angel Network (MyVAN)
– Business Angels with a SW focus, members of the UKBAA
– Active Experienced investors with added value:
• Networks and sales connections
• Technical
• Bring their own disciplines
– Invest their own cash
– Will often take a board or NED position
An integrated Approach
• Mylor Ventures Angel Network (MyVAN)and/or….
Your own cashFamily and FriendsCrowd (Crowdcube, Seedrs, Funding Circle)
and/or….GrantsCornwall Fund[VCs – EBITDA>£0.5m]
What Angels Look For:
• Businesses with– Strong Value propositions– Large markets– Intellectual Property– Credible Management
• Capital Efficiency • Gross margin must cover HR asap• EIS/SEIS• Willingness to let Angels participate• [NED Register]
MyVAN ref Crowd & Grants
• Crowd (Fixed timeline)
– Pump priming (MyVAN)
– Detailed preparation
– Alongside corporate/VC/PE
• Grants (Non dilutive)
– When available
– Reduce overall risk
What Angels Look for - Preparation
• Investment Readiness Toolkit
– Templates
• IMs, Models, Presentations
– Documents
• NDAs, Contracts, SH Agreements
– Policies
• Procurement, Ethical, Environmental
• Its always a buyers market but good companies well prepared always get funded
Process - Delivery
• MyVAN– Apply at www.mylorventures.co.uk/angel-network/– Investment Readiness (1 – 2 months)– Due Diligence (Stephens Scown template)– Summary Document– ‘yes/no’– Meetings/Skype– Agreement/Participation– Execution
• Crowd – note timeline benefits• Grants – non dilutive but ensure focus is maintained
Introduction to BGFInvestment as it should be
A £2.5bn investment company
Investment as it should be 84
About BGF
Long-term, minority equity investmentsof £1m - £15m
Investments acrossall sectors and all regions of the UK& Ireland
A well-capitalisedand evergreenbalance sheet
Proud to be #1 active growthinvestor globally
A minority investorOur equity share is typically between 10-40%. The company remains in control with BGF acting as a junior partner alongside management teamsand shareholders.
Long-term partnerWe initially invest between £1m and £15m, with significant follow-on funding to support new growth opportunities. There are no exit deadlines or drag rights - exits are driven by the shareholders not BGF.
Flexible fundingWe provide a mix of equity and loan notes into businesses for growth, strengthening your balance sheet, and/or cash out to existing shareholders. We can invest alongside bank debt and co-invest with other partners.
Investment in all stages of growthWe invest in a range of companies from earlier stage ventures to more established SMEs (including those listed on the AIM market) and those with £100m+ revenues across all sectors.
Valuable business networkWe provide companies with access to a global network of business leaders, sector specialists, other investors and our other portfolio companies.
Skills and expertise of our peopleWe have the combined expertise of over 100 investment professionals across 16 offices in the UK and Ireland. Alongside our network of business leaders, BGF can help with strengthening boards, succession planning, exit strategies & exit processes.
Our approach to investment
Investment as it should be 85
Typical uses of BGF funding
Investment as it should be 86
Investment in systems & infrastructure
Strengthening balance sheets and refinancing existing debt
Working capital
Site roll-outs
Marketing & brand development
De-risking management shareholders
Succession planning
Capex
Acquisitions
Investment in people
Product developmentRestructuring the shareholder base
Established trading operations, generating revenues of £2m+
Clear strategy and detailed plan to grow profits
A high-calibre management team with a track record of delivering growth
Resilient sectors with higher barriers to entry and a growing addressable market
Businesses with a strong brand/ concept or unique proposition that is hard to replicate
A good indicator of management and sector performance
Alignment with shareholders and confidence an exit will occur to deliver our return
Growth investments
What do we look for?
ESTABLISHEDBUSINESS
GROWTHPLAN
MANAGEMENTTEAM
EXIT/ ALIGNMENT
SECTOR/ MARKET
USP / IP
HISTORICALPERFORMANCE
The benefits of partnering with BGF
Investment as it should be 88
Follow-on funding capabilityWe can provide multiple rounds of further funding to support additional growth opportunities
Access to our Talent NetworkIn particular through the appointment of a non-executive chair
Time and experienceFrom one of our own investors or portfolio managers joining the Board, as well as a wealth of specialised skills across our infrastructure teams
Professionalisation and rigourThis can lead to immediate efficiencies and help to prepare a business for an exit
M&A experience and exit planningIn BGF and through its advisory network, we can fast track growth strategies as well as ensure their success
Sector expertiseHaving invested in over 300 companies, we are able to share our vast experience of the challenges and opportunities across all sectors
RecapitalisationStrengthens the balance sheet, particularly for those companies with existing debt. This gives companies the headroom and headspace to move forward with their growth plans
Founders and CEOs from across the portfolio are on hand to speak to you about their experiences of partnering with BGF and how they’ve tapped into the benefits detailed here.
UK GOVERNMENT SUPPORT FOR BUSINESS
https://www.pkf-francisclark.co.uk/coronavirus-updates/
https://www.pkf-francisclark.co.uk/insights/
Includes:
• Bounce Back Loan Scheme
• CBILS
• CLBILS
• Future Fund
• Business Grants (rates)
• Local Authority Discretionary Fund
• Fisheries Response Fund
• Dairy Response Fund
• Coronavirus Job Retention Scheme/ Flexible Furlough Scheme
• Self Employed Income Support Scheme
• VAT and Self Assessment deferral
UK GOVERNMENT SUPPORT FOR BUSINESS: LOAN SCHEMES
Loans by value as at 28 June 2020: Total £43.23bn
BBLS
CBILS
CLBILS
Future Fund
UK GOVERNMENT SUPPORT FOR BUSINESS: PKF FRANCIS CLARK CLIENT CBILS STATS (APPROX.)
Circa 60 clients assisted
Circa £30m offered to
our clients through CBILS and non-CBILS
Over 80 templates sent out to
clients and non-clients
UK GOVERNMENT SUPPORT FOR BUSINESS: CORONAVIRUS JOB RETENTION SCHEME
Coronavirus Job Retention Scheme Official Statistics (11 June 2020)
CORONAVIRUS JOB RETENTION
SCHEME /
FLEXIBLE FURLOUGH SCHEME
PKF Francis Clark, Scott Campbell
CORONAVIRUS JOB RETENTION SCHEME/ FLEXIBLE FURLOUGH SCHEME
WEBINAR – CORONAVIRUS JOB RETENTION
SCHEME: CHANGES AND FLEXIBLE FURLOUGH
https://www.pkf-francisclark.co.uk/coronavirus-updates/
Crowdfunder
British Business Bank
Capitalise
Boost
Lloyds Bank
SWIG Finance
Folk2Folk
Ignition Credit
CIOSIF
Mylor Ventures
BGF
London Stock Exchange
THANK YOU…
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