There are lots of finance options available
Help is on hand
According to the British Printing Industries Federation (BPIF), the UK is the world’s fifth largest producer of printed products, with over 8,600 companies employing over 122,000 people and a gross turnover in excess of £13.5bn.
Despite this, the transition from start-up to scale-up can be a treacherous path and accessing the necessary finance to feed growth can be a minefield of obstacles, not least knowing where to look in the first place.
The transition from start-up to scale-up can be a treacherous path
As new technologies emerge, the scope that print-service-providers can reach is ever widening – notably the development of digital technologies. With a rise in accessible technologies and the ability to complete jobs quickly and cost effectively, more companies are now able to complete simple design, fabrication and installation jobs, with the addition of some forms of marketing now entering the mix.
In many cases, funding is needed to help catapult businesses into new markets purchase new sites, acquire other businesses and even start an entire business from scratch.
It takes time and money to grow into a large commercial print company able to offer a list of services, so it is often the case that new print start-ups will first set out in a specific area, or market – in line with the owners’ own experience and skills.
According to alternative business finance firm, Thin Cats, almost 3,000 bank branches have closed in the UK since 2015, equating to almost 60 closures each month. This statistic demonstrates the importance of searching further afield when accessing your options for funding. Government-backed schemes, crowdfunding and flexible finance providers are all on hand to provide other solutions.
Know the difference
If you want to purchase a shop independently, a secured loan may be needed. A secured loan is a way to borrow a large sum of money – often from £50,000 upwards. The benefit of secured loans is that they can be tailored to a business’ needs and designed to fit each company’s turnover.
The term ‘secured’ comes from the fact that the borrower agrees to dedicate an asset that the lender will take if the borrower is unable to make the agreed payments.
With UK highstreets struggling, looking for alternative funding can be a smart move
To purchase an office or studio, a commercial mortgage is a cost effective way to raise funds to use elsewhere in the business if you already own the building otherwise leasing a unit or site is the most common way to gain a base.
In order to move into new markets, you may need to acquire equipment and assets. Hire purchase is a simple way to buy an asset and spread the cost over a defined amount of time. A payment plan allows businesses to pay in instalments. When the plan is finished, the firm has full ownership of the item.
Another option is a finance lease. Similar to a rental agreement, the finance company buys the asset and rents it to the business over the duration of the lease contract. This means it can be accessed straight away and will only cost a fraction of the total amount up front.
At the end of the contract the business can continue renting, return or replace the equipment, sell the asset or return the asset and terminate the rental agreement. Through finance leases, businesses can protect working capital by accessing equipment quickly without any significant initial investment.
Venture off the trodden path
(L to R) David Bunker, Jamie Nelson and Mark Nelson, directors of Compass Business Finance
Obtaining finance can be an obstacle for some businesses, due to having none or insufficient security to meet a lender’s normal requirement. If you are met with challenges when seeking finance, there are always alternative routes. Compass Business Finance is also an accredited lender under the British Business Bank’s Enterprise Finance Guarantee (EFG) programme and is able to offer finance to businesses that previously would not have been able to access the finance they require.
If you are met with challenges when seeking finance, there are always alternative routes”
Close Brothers Asset Finance offers all of the traditional types of finance including hire purchase leasing, however, in conjunction with certain suppliers it is also able to offer Consumable Agreements, which – if structured properly – can help a customer match their equipment purchase repayments to cash flow and consumables they use with it.
Paul Philbrick of Close Brothers Asset Finance’s Print Division explains: “Most business owners are fully aware about the various financing sources available to them and our own research confirms that, but it’s not always about finding an alternative ‘way’ to access finance but instead an alternative ‘approach’. With the high cost of capital equipment, most companies tend to finance the equipment they purchase over its economic life. This protects their cashflow, which in turn gives a company more financial flexibility in the long term.
The truth is that sometimes a standard 10% deposit over 60 months isn’t always the best solution”
“Speaking from the Close Brothers Asset Finance perspective, we spend time engaging with our customers to find meaningful ways to help them. The truth is that sometimes a standard 10% deposit over 60 months isn’t always the best solution – by taking time to understand our customers and their business we try to take the pressure away from any transaction so that they can get on and run their business.”
Help to grow
When it comes to grants for business, the government has a long list of schemes and funding available if you know where to look. One example of funding available to the sign industry is the ‘Signage grant scheme’ for the South Somerset District Council. Launched last year, this funding provides successful applicants with up to £3,000 for a group of businesses or £500 for an individual and was created to encourage the manufacture and placement of new permanent signage in key locations.
The Seed Enterprise Investment Scheme (SEIS) is another form of government funding and was designed to help companies raise money when starting up. Individual investors are offered tax reliefs when buying new shares in the successful company. A company can receive a maximum of £150,000 through SEIS investments.
O Factoid: According to alternative business finance firm, Thin Cats, almost 3,000 bank branches have closed in the UK since 2015 O
Another grant designed to support and encourage the growth and expansion of the local economy is the Adur & Worthing Councils Small Business Growth Grant funding which was launched in partnership with Adur and Worthing Business Partnership.
This funding is available to local micro businesses of up to ten employees with grants of up to £2,500 available with a 50% match funding contribution required. An example of this is that if a business wanted to purchase equipment costing £1,500, a contribution of £750 is required and £750 can be applied for from the grant fund.
Another way to access funding is to have an innovative offering. Innovate UK (now called Smart), part of UK Research and Innovation invests up to £25m in “the best game-changing, innovative or disruptive” ideas with a view to commercialisation.
The proof is in the pudding
Having partnered with Soyang on a PVC banner recycling scheme, Blue Castle, a waste and utilities consultancy based near Newark recently received funding from Innovate UK. Marie Harley, chief executive officer at Blue Castle Group explains the process: “The way that the Innovate UK competition worked was that the proposals we and other entrants submitted were scored against criteria and funding was awarded to the highest scorer, with money reducing to other finalists down the list.
Blue Castle and Soyang have partnered in a new PVC recycling scheme
“In support of our PVC Banner Recycling project, we put a robust entry forward that demonstrated that Blue Castle had a substantially different idea that showed a solution with a significant improvement to what was out there.”
Blue Castle’s mechanical recycling plant is situated on a business park that includes the Technology Research Centre. Through word-of-mouth, staff at the centre heard about the companies’ recycling idea and informed them of the competition, as well as supporting their entry.
Harley continues: “The application process was relatively straightforward. We found a partner – the Green Chemistry Centre of Excellence at the University of York in order to develop the greenest chemical possible.
“Undoubtedly the process of finding the right partner was challenging but has proven hugely worthwhile. Once we’d applied, it was fairly simple working the process from thereon in.”
Following the successful funding process, Blue Castle has now employed three new team members, experienced an increase in income, and has been able to continue to disrupt the market whilst delivering a solution to a real challenge.
“The funding has also enabled us to step outside our normal market and have the confidence and resources to communicate to a captive audience,” Harley adds.
In terms of where to look when searching for possible funding opportunities, Harley advises looking locally first. “You’d be surprised at what might be available on your doorstep,” she says, adding: “We’re part of the Lincolnshire Growth Hub and our first funding for the mechanical recycling plant came through them.”
Looking forward, Blue Castle is working on various projects and is using its industry experience and the experience of its PVC recycling project and is seeking to replicate it onto other new projects. Harley concludes: “We have plans to build a pilot plant; now we have the solution to take the process from mechanical to chemical, we’re looking to take it out to the market, so additional funding will play an important part in that too.”
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