Alternative funding for print businesses

Alternative finance is an umbrella term for commercial lending from a source other than a bank, and there are several options, a few of which I have listed below.

Peer-to-peer business lending:  This is a method of debt financing that enables individuals to borrow and lend money, without the use of an official financial institution as an intermediary.

Crowdfunding: This is the practice of funding a project or venture by raising monetary contributions from a large number of people, typically via the internet.

Business angels: This is when an investor uses their personal disposable finance and business or professional experience to invest in the growth of a small business.

Invoice finance: This is when an invoice finance company lends on a business’ unpaid invoices to help them manage cash flow; they can also offer additional credit control services.

Asset finance: This is the practice of leveraging the value of assets on your balance sheet to obtain a loan without tying up your working capital.

It is the latter option that our business unit offers, and we are pleased to say that asset finance lending volumes are consistently rising. As a sustainable funding method that allows a business to purchase equipment and machinery with a low capital outlay, it offers a range of benefits including tax breaks and flexible repayment schedules.

Why is it important?

The alternative finance industry has become a seriously important part of the UK economy, rising to the fore during the recession when banks were not lending. Alternative lenders often have a more innovative, flexible, and technology-led approach that offers not only increased access to finance for SMEs, but also access to a type of finance that is often better tailored to the exact needs of a business at any given time in its life cycle.


Perhaps one of the most important reasons you should consider alternative funding options is that niche markets are often better understood. For example, our print division comprises people with extensive industry experience, meaning they are able to apply their understanding of the sector to agree and structure deals that more mainstream funders just would not consider.

Non-traditional lending has really come of age, it is a properly regulated industry whose advantages are really being taken note of amongst business leaders and government alike.

Is the Regional Growth Fund applicable to print firms?

Very definitely, yes. The Regional Growth Fund (RGF)?is a £3.2bn fund from the government for SMEs granted via intermediaries. It aims to support private sector investment to create economic growth and sustainable employment across the English regions.

The size of the grant available is based on the level of proposed investment, the size and location of the business, and finally the number of sustainable full time posts being created or retained. For every one job created or retained, a grant of up to £10,000 is awarded—up to a maximum of 20 percent of the proposed investment and is paid into a Hire Purchase agreement as a deposit.

Close Brothers Asset Finance has been awarded a total of £70m from the RGF, and so far, we have allocated over £50m to SMEs across a range of sectors.
 
To be more specific to the print sector, 38 percent of those funds (or over £19m) have been awarded to print firms, creating 890 jobs and safeguarding a further 1203 positions. We assessed each of those businesses for their eligibility and guided them through the application process.

That £19m has all been used to contribute to deposits on important asset purchases. It is a particularly significant boost for the print industry given the high level of under investment in new machinery and equipment through-out the recession.


To find out more about the issues discussed in this article you can contact Close Brothers Asset Finance on 020 80030744 or visit www.closeasset.co.uk/print

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