Review of year shows people seizing opportunities to do their own thing
‘Don’t stop believing’ is the message from Foundation East. The community finance organisation has money to lend to people starting up and expanding their businesses and a review of the year shows that many have taken this opportunity to change direction. However, there is a concern that ambitions are being stifled as people assume that they will have difficulties obtaining finance.
Bob Shimmon, Foundation East Business Loans Manager for Hertfordshire and Bedfordshire, says that businesses that rise out of adversity are often the strongest.
“Our aim is to support people with sound business plans when they face a tough patch. We work to get them to a stage where either they can trade their way to success or become eligible for mainstream banking.
“Our focus is therefore greater than loaning the money; we want to ensure the long term viability of the company. This includes helping people to be realistic about their plans, so they avoid cash-flow problems, while also making it possible for them to take the next step.”
This year Foundation East has loaned over £0.78m to small businesses. It is a membership organisation, with individuals and companies purchasing shares in Foundation East and having the opportunity to get involved in the organisation.
All start-up companies are given coaching and this has greatly increased their success rates. This is evidenced by the increasing proportion of loan capital that is recycled – being repaid and then made available for further investment.
Foundation East wants to encourage more loan applications and last year has been notable for the number of people that have seen an opportunity to take a new path. Bob says:
“Many of the people we have helped have radically changed their lives and made their ambitions a reality.”
Across the East of England this has included a sixty-year-old musician who thought ‘now or never’ and has opened a music shop; a young man who decided in his gap year not to go to university but set up as a tree surgeon with a friend; a professional pool player who has revitalised a rundown snooker hall; two mums who have set up a children’s nursery with a difference, and a former care worker who now gives rides in a horse and carriage from Cromer Pier.
Foundation East offers loans of up to £50,000 for businesses that have been refused bank finance. The money is borrowed on flexible terms allowing early repayment without penalty and can be used for a wide range of purposes including purchase of vehicles and equipment, covering shortfall before payment of orders, training and for new business start-ups.
To gain a loan a company needs a sound business plan which sets out the market opportunity and how the company is going to service it. This needs to be a working document in order for the business to be successful.
Bob says: “Setting yourself up in business is hard work and needs the support of family and friends, but you also need to be objective about the market opportunity and assess if there actually is one, how big it is and how it is served at the moment. This is a key purpose of the business plan; it is not just to help raise finance.
“It is no good putting your plan in a drawer and forgetting about it, you need to regularly review how you are doing against the plan, assess what is working and what needs to be changed.
“Talking to a business coach can be very helpful in the early days and with the demise of Business Link we are keen to signpost people to where they can access the support they need. This advice often makes all the difference to the success of a company.”
Bob provides some advice below for early-stage companies. For information about business loans or becoming a member of Foundation East please go to www.foundationeast.org.