Support to get investment ready on the way as £400m fund highlighted to business

By Scunthorpe Telegraph | Posted: 13 Feb 2018

Support for small businesses to help get them investment-ready is to be rolled out by Humber Local Enterprise Partnership in the coming months.

A programme to aid those making vital pitches will be unveiled soon, after it was identified that there was a need to help those who may have little or no experience of the world of finance.

It was outlined as the £400 million Northern Powerhouse Investment Fund was highlighted at a special Funding for Growth business event in Scunthorpe.

While entrepreneurs keen to follow their dreams and ambitions were urged to talk to advisors to progress proposals, it was flagged up that many may not understand an often complex world, where venture capital, equity share and debt finance mix with mezzanine and seedcorn status, before percentages and performance even get introduced.

From tackling the terminology to having accounts in place to back up trading history, recent funding runs have unearthed some common issues that will now be addressed.

Laura Barley, business programme manager for Humber LEP, said: “People aren’t always in the right position to access finance as a key part of a business’s growth. It may be management team needs help with structure, or increasing confidence about how to present the business. There is a raft of support we will launch in May, where we can provide support to become investment ready.

“We have seen that when assessing grant applications through Growing the Humber, there are a number of businesses where there is a really good idea, but it needs to get to a position where it can access grants, and the same applies for bank finance. We have recognised there is a need and will address this. 

“We are trying to grow the economy of the Humber and supporting business is part of that. Having one-to-one conversations with our advisors, they can help navigate through all the complexities of the funding. Sometimes it can seem overwhelming, but our advisors can demystify things.”

FUNDING FOR GROWTH: Mark Wilcockson, Lord Haskins, Rob Waltham MBE, Laura Barley, Brian Gilliland, Sam Latus and Ash Lewis at The Baths Hall, Scunthorpe.

Three regional businesses where investment has been a feature of strong growth gave their take, with ad tech firm Ash TV, protein sachet supplier Whey Box and construction company Westlinks represented.

All at different cycles, they put finance into context for a strong breakfast gathering at The Baths Hall.

Mark Wilcockson, senior relationship manager at British Business Bank & Northern Powerhouse Investment Fund, hopes £50 million could be committed on the South Bank. He said: “We only step in where there is a gap in the market. Where primary banks are operating, we want them to continue operating – we are there to fill the gap where the risk profile is too high or there may be a lack of security.

“Do you need a full business plan? No. Just tell us what you are doing. The skill is understanding the business without reams of paper. We will ask you to back it up later, if you are not investment-ready, and we will direct you, but let’s start the discussing and use the skills of the guys to make sure you can access the funds.” 

With four years left to distribute, and a further spend window to take away the rush-effect, he was keen to highlight the opportunity with businesses and a range of intermediaries present.

All had been welcomed to the event by Rob Waltham MBE, leader of North Lincolnshire Council. He said: “It is tough getting into the world of finance, it is tough running a business and having to think about all the things finance is needed for. I hope in running events like these, people think about where they can get finance from for their business, and that there are other options, and it is not always about conventional lending. 

“Government is being quite imaginative about how it stimulates extra business,” he said, adding that while the resetting of the economy was a risk, it was also an opportunity to be more creative about the way we function.

“The picture is quite simple for me,” he added. “I want more people in employment and businesses flourishing.”

'The scenario was the same 60 years ago as it is today' - Lord Haskins on funding and his father-in-law's start-up

LORD Haskins welcomed efforts to ensure “businesses that need the oxygen to succeed can get that oxygen,” as he gave his address, flagging up post-Brexit opportunities and comparing the early days of the family business to the fledgling firms on display.

Chairman of Humber Local Enterprise Partnership, he reflected on his father-in-law’s start-up, Northern Foods.

“It started in very much the same way,” he said, having heard the impressive tales from panelists Ash Lewis, Sam Latus and Brian Gilliland of three Hull-based businesses that have taken advantage of available finance to aid rapid growth in ad tech, health and property respectively.

Telling the tale of Alec Horsley's business beginnings, Lord Haskins said: “My father-in-law was a sales man in Hull, selling condensed milk to confectioners initially, just before the war.” Reflecting on the hey days of Terry’s and Rowntree, and how “quite a lot of people were eating chocolate,” he said: “He was importing this from Holland and he saw that might be a problem. He built a little factory in Holme on Spalding Moor and the rest is history. When I took over from him it was making £300,000, when I left it was £1.5 billion.”

NORTHERN WAY: Alex Horsley's Northern Dairies (latterly Northern Foods) thrived on scaling up, with investment support on the way. 

While he accelerated the business, largely through becoming chief supplier to Marks and Spencer, he paid tribute to the man who gave him his daughter and the opportunity.

“I still say the first £300,000 was the hard part. He was an incredible risk taker and would go from bank to bank, not always popular, but he had capacity to have a fantastic amount of ideas, and plenty more good ones than bad ones. That’s the starting stage, having a good idea, thinking it out carefully and being strategic. He was in a mature market but his competitors were half-wits. I tried that in the milk industry too, where it was full of stupidity and fraudulent folk. Productivity was key. We would buy dairies and shut them, it was quite ruthless, but we would bring them together. The average site then produced 500 gallons a day, when I left it was 100,000 gallons.”

Of investment, he said: “The scenario was the same 60 years ago as it is today. We probably have many more opportunities now than there were then, but it is more competitive, with more people going for the business because of the opportunities.”

Rather than the British Business Bank, in 1945 it was the Industrial and Commercial Finance Corporation, founded after peace returned to provide finance for small and medium sized firms.

“He was prepared to give equity away. ICFC took a 10 per cent stake and made a lot of money, then sold it and said ‘you’re on your own’. It is about getting to a certain size and being prepared to move on,” he said.

Fast-forwarding seven decades, Lord Haskins looked at present day, both attitude and the external force of Brexit. “We have a good record in the Humber, it is entrepreneurial, and the food industry, particularly on the South Bank, has been really successful, but over the years some have been reluctant to let businesses grow,” he said. “Smaller businesses start up, set up quickly – some too quickly – then employ five or six people and get nervous. In Germany many businesses employ 50 to 100, we need to get to that middle, to put into place all of those plans. 

“We are in a difficult situation, there is uncertainty, but many won’t be affected as they are dealing with the domestic market, and will only be affected if the whole market starts wobbling, and it might, but it might not. 

“There is opportunity if we go in to a tough deal, and I hope we won’t, but there will be import substitution opportunities and there will be plenty of people working that out. Great entrepreneurial spirit is the person who sees opportunity out of potential disaster.

“We have been going pretty well over the last five years, we have been starting to narrow the gap with he rest of the country, there are huge opportunities all about, people taking risks and financiers prepared to take these risks. The sort of thing the Northern Powerhouse is doing is making sure the businesses that need the oxygen to succeed can get that oxygen.” 

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