Scottish companies set sights on £96 million finance

Scottish companies have secured £9.6 million from banks, private investors and other funding sources in the last seven months, after tapping into support from Scottish Enterprise’s Scottish Investment Bank (SIB).

Working closely with a team of financial readiness experts, 232 companies of various sizes have secured funding since April and are now setting their sights on securing ten times the initial amount, aiming to raise £96.2 million over the next few years.

With lack of access to finance recognised as a major barrier to economic growth for businesses across Scotland, Scottish Enterprise has introduced five additional Financial Readiness specialists to support the existing team, in a pilot project designed to provide companies with the opportunity to engage earlier with specialists to extend the reach of support available to assist businesses, ensuring they’re in the best possible shape to take full advantage of funding opportunities.

Kerry Sharp, acting head of the Scottish Investment Bank, said: “Access to finance remains a significant challenge for Scottish businesses, but a range of funding options are available for ambitious Scottish companies with the desire and capacity to grow. Our financial readiness specialists are working hard to help companies prepare for new investment and tell a more compelling story that makes it easier to access finance. These investment figures are very encouraging and hopefully give confidence to other companies seeking to grow their business.”

Scottish Enterprise aims to provide independent financial readiness advice and assistance to around 450 companies during 2012/13, offering not only a guide available finance; but also helping to identify the steps businesses need to take to draw that finance in.

“Our aim is to make sure all the necessary support systems are in place before investors are approached,” explained Pat McHugh, investment director in the Scottish Investment Bank.

“We’ll work with companies to make sure their business plans are in good shape; their management teams effective and they are in the strongest position they can be. Then we’ll look at the various forms of finance that might be available.”

In some cases funding might come from Scottish Enterprise. The Regional Selective Assistance (RSA) initiative, for example, provides funding for viable investment projects to encourage growth and safeguard jobs; new projects may qualify for innovation or research and development funding; and, the Scottish Investment Bank offers a range of equity funds providing growth capital designed to support, through working with the private sector, Scottish businesses at different stages of growth.

One of the companies that has already benefited from such assistance is Marble Fashion Design Ltd, a company of 20 employees based in Hillington. In the last two years with the support from SIB’s financial readiness specialists, it has raised £600k in funding and increased turnover to more than £3m.

Jenier Ltd (World of Teas), based in Bridge of Weir with 10 employees, had a request for £50k refused by a high street bank. Since then it has been working with SIB financial readiness expert, Graham Stevenson and has successfully secured funding from another bank.

"Our company was just beginning the process to try and obtain bank funding when Graham was introduced to us,” said MD Anita Clark. “He immediately understood our business and the financial challenges we were facing.

“Graham’s industry expertise enabled us to understand how we should present these issues to the bank and highlight what they were looking for and gave us the confidence to know that our financial assumptions were relevant to the business.

“The financial readiness service has been invaluable - I believe we would not have been able to secure the funds we needed without it and I thank them for making the difference."

Despite a challenging economic climate, finance options are still available to motivated and determined Scottish companies. And in the coming months a new, online resource will be launched, designed to help Scottish businesses navigate the range of finance options available.

The Scottish Business Portal will make it easier for businesses to find such information from government and the public sector, and will include information on both grants and finance. An early beta version of the Portal, which will continue to undergo further testing and development, will be available to try from November 2012.