Loan scheme places emphasis on future potential rather than past performance
Hertfordshire companies that have a credible growth strategy and need finance are being encouraged by Finance East (part of The FSE Group) to apply for a loan via the Regional Growth Loan Scheme (RGLS). By focusing more on future potential than past performance, the RGLS plugs a gap for established companies that have a credible growth strategy but have not managed to raise finance to implement their plans.Raising finance can be particularly difficult for established companies whose balance sheets have been weakened by tough trading conditions and those that operate in sectors that are typically less appealing to business angels and venture capitalists, such as manufacturing or business services.
Anecdotal evidence indicates that banks tend to take a historic view of businesses, which precludes them funding a business without a healthy balance sheet, irrespective of its growth potential. Equity investment may be an option but many investors focus on innovation and not all companies fit this mould. In addition, securing equity investment takes time - something many companies don’t have - and it requires an obvious exit route; not all business owners are growing their business for sale.
The Regional Growth Loan Scheme, managed by Finance East offers a solution for the owners of businesses that have been unable to raise finance elsewhere. It is aimed at companies with turnover of £500,000 or more and growth forecasts of 20% - 50% per annum. Importantly the team’s decision to fund a business is more focused on its potential than its performance to date.
Stuart Ager of Finance East explains:
“If a company’s past performance is less than resoundingly positive or they are experiencing cash flow problems, most funders will walk the other way. However, when assessing companies for a Regional Growth Loan, we will scrutinise their growth strategy for the future rather than raking over the past. If we have confidence in the product, sector and team and the company has a robust plan for the future, we are likely to say ‘yes’ where others have said ‘no’.”
A loan via The Scheme can be used for capital expenditure, sales and marketing, personnel recruitment and/or project expenses. Loans of between £50,000 and £200,000 are available on 2 – 7 year terms.
Stuart Ager adds:
“When clients come to us they have sometimes been offered a percentage of their total requirement and then need to find the rest. Our openness to funding 100% leaves the company free to focus on its growth strategy rather than having to divert time to chase match funding.”
For examples of companies that have received loans, see notes to editors.
For more information on the Regional Growth Loan Scheme please go to www.thefsegroup.com/funding/sme/regional-growth-loan-scheme
or contact Stuart Ager on 01473 722910