Look After the Pennies
Walking the aisles of The Print Show just a couple of months ago, one thing was abundantly clear: people are buying new kit. Whether this is a new wide-format printer to support their expansion into a new market or taking on additional finishing technology to offer new effects to customers, new machines are being snapped up across all areas.
This can only be good news for a sector that was hit hard during the pandemic as demand for certain work dried up, with many manufacturers and suppliers supporting companies with their investments by offering certain funding and financing arrangements.
Add in third-party options from specialist financing businesses and this can help open doors to new purchases for print companies of all kinds. Here, we highlight recent examples of funding and financing in practice and present some of the options available to those in the UK industry.
A Tough Market
Compass Business Finance is an independent finance company specialising in asset-based lending to the print sector. Director Jamie Nelson explains that asset-based finance having increased by 6% in October reflects an overall rise in confidence across the UK market. However, he says the situation is not quite the same in the print sector.
Compass Business Finance specialises in asset-based lending to the print and packaging sector
“For the print market, investment has slowed, perhaps in part because we have Drupa on the horizon,” Nelson says, adding: “However, the market is tough. We’ve been working with customers on various projects, including debt restructuring, MBOs and acquisitions, as well as direct investments.
We’ve been working with customers on various projects, including debt restructuring, MBOs and acquisitions, as well as direct investments”
“During the past year, we’ve seen a lot more investment decisions being driven by potential energy savings and workflow efficiencies. Sustainability is high on the agenda for many businesses, especially where it has the ability to help them win more contracts. The majority of investment we’ve seen has been in sustainable large-format and packaging applications.”
So, what can Compass offer to help print companies overcome the financial stumbling block with new investment? Nelson says Compass is passionate about the success of customers and will work with them whether times are buoyant or tough.
Compass is able to support customers through a range of funding solutions, whether they are making investments or looking to improve their own cash position.
“We take a relational rather than transactional approach to doing business, valuing our team, our customers, and our partners so that we can provide the best possible products, service, and experience now and into the future,” Nelson says.
In addition to what Compass does, Nelson says there are tax incentives in place to encourage continued investment. Such schemes run alongside the Recovery Loan Scheme (RLS) and help to support lending to businesses that may otherwise not be able to attain the funding they need. However, it is worth noting that the pandemic-linked RLS is currently due to end on June 30th, with those interested advised to move sooner rather than later to avoid missing out on this type of funding.
Support from Manufacturers
So, we have established that funding and financing is readily available, but what about how this works out for PSPs? The proof is very much in the pudding with plenty of businesses having made use of financing in recent months to support their growth plans.
Designs Signage Solutions has invested its £100K funding into sustainable and 3D scanning solutions
In the summer of last year it was revealed that signage solution company Designs Signage Solutions had received £100,000 in research and development tax relief.
R&D tax relief has been a growing form of investment for businesses in print and signage, two areas which are seeing significant innovations regarding green products and automation.
The scheme was introduced in 2000 to incentivise innovation resulting in either reduction in a corporation tax or a cash lump sum.
The Hull-based company used the funding to develop its 3D scanning technology and invest in new sustainable solutions. The 3D imaging technology is able to map a surface to help in the planning and application of signage designs. Previously, this required hand drawings and mask taping.
Designs worked with innovation funding specialist Catax to secure the funding and Claire Robinson, key account manager at Catax, says: “The tax relief they have received will go back into the business and even more R&D projects.
“The company keeps coming up with new challenges it wants to overcome, which not only helps their business to grow but also produces great results for its customers.”
At the end of 2023, Imageco received £45,000 in funding from Leeds City Council to invest in business growth. The grant was provided by Leeds City Region Enterprise Partnership (LEP) as a result of the company’s hard work in the community.
O Factoid: The Recovery Loan Scheme (RLS) is due to conclude on June 30th 2024 O
Imageco has been involved in many large projects over the past year including working with Dr. Martens stores across Europe.
The business was also a key player in helping with the rejuvenation of Leeds City Centre in 2020 as well as the Leeds United Centenary Collection.
According to Imageco managing director Nathan Swinson-Bullough, the funding will allow the company to invest in staff and enter new markets in order to expand the creative potential of print and signage.
Imageco has used a large part of the funding to invest in a new swissQprint Nyala 4 flatbed printer.
Alternative Routes
In terms of thinking outside the box and looking at other financing options, an excellent example comes in the form of print-on-demand merchandise platform Merchr. The company was founded by an experienced team backed by Martin Varley, a well-known executive in the personalised products industry. The business swung into production earlier this year after securing £350,000 in an oversubscribed pre-seed fundraising round, allowing it to get off the ground.
Less than a year after opening, the company installed a raft of new, custom-built machinery as part of a £250,000 investment for its production facility in Middleton, Greater Manchester.
The new equipment includes a flatbed printer which can print up to 60 notebooks at a time with a varnish finish, and a 360-degree cylinder printer machine for water bottles and flasks, with capacity to produce 250 an hour.
Merchr has also installed a GraphTec cutting plotter which produces raised printing with a vinyl finish, along with a laser-guided dual heat pressing printer for glitter, neon, and textured printing on T-shirts, hats, toiletry bags, and other items.
Jack Fox, head of operations at Merchr, comments: “Advancements in technology have opened doors to a new era of sustainable merchandise printing. The ability to print retail quality items on demand, without having to order in bulk, not only enhances our commitment to sustainability but also empowers our store owners with more choice and customisation options.”
The bottom line is that financing and funding is available to print companies of all shapes and sizes. Of course, any sort of venture or arrangement in this area should be properly planned out and thought through before diving into anything. Analysing your business and speaking with finance experts can give you a clear idea of exactly what you need and what the best solution is for your company.
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