Obtaining Investment for Your Business.
There has arguably never been a better time for Welsh small and medium-sized businesses to find investment capital to drive their growth and take them to the next level.
For a long time, the reality seemed to be that, unless you were large enough to attract the “mid-market” private equity investors, Development Bank for Wales (formerly Finance Wales) was the only option for growing businesses to seek significant investment to finance ambitious growth plans.
However, many new funds have been established to help new start-ups as well as established SMEs who are looking to take their business to the next level.
These include:
Start-up support grants
In Swansea, the Local Authority is managing a range of grants and loans designed to help businesses in the city that include:
Pre-Start Grant.
Funded by the UK Government’s Levelling Up Fund, this is a grant to support start-up businesses. The grant is available to pre-start businesses only and can fund costs including but not limited to equipment, training, accreditation and marketing and the maximum grant available is £10,000.
Website Development Grant
This is a grant to adopt a new technology through online/website development. The grant can fund costs relating to the creation of a business website for the first time or enhancement to an existing site. The maximum grant available is £1,500
Business Growth Grant
This is a grant with the objective of supporting business growth through the introduction of a new product or service. The grant can fund costs including but not limited to equipment, IT systems and machinery.
The maximum grant available is £50,000 based on an upper limit of £5,000 per job created and/or safeguarded.
Carbon Reduction Grant
This is a grant with the objective of enabling businesses to work towards net zero carbon. The grant can fund costs including renewable energy generation, energy conservation measures and changes to manufacturing processes which result in carbon reduction; applicants must be able to calculate their forecast carbon savings. The maximum grant available is £10,000.
Supplier Development Grant
This is a grant with the objective of providing a new service upon undertaking training to gain a sector-recognised accreditation. This will aid businesses wishing to bid for public sector and/or larger-scale contracts. The maximum grant available is £1,000.
More information on these as well as other funding opportunities can be found here – https://swansea.gov.uk/businessfunding
SME Investment Funds
The Cardiff Capital Region fund (which, despite its name, is available to assist businesses from Bridgend to Newport) has established the Innovation Investment Capital (IIC) fund, managed on its behalf by PWC. IIC has already made investments, including, for example, in accountancy services firm Mazuma, based in Bridgend, and is keen to deploy further funds to help the right businesses in that region.
The IIC fund enables investments of between £2m and £7m and is “dedicated to accelerating the ambitions of innovative and responsible enterprises in a variety of services and industries and helping fund sustainable ideas, practices and entrepreneurial ambitions, for enterprises based in each of the ten unitary authorities of the Cardiff Capital Region”. For more information see https://www.cardiffcapitalregion.wales/project-hub/innovation-investment-capital/.
In November last year, the British Business Bank also established the £130m Investment Fund for Wales (IFW), of which £50m is a dedicated “equity fund” managed on its behalf by Foresight. The fund aims to drive sustainable economic growth by supporting innovation and creating local opportunities for new and growing businesses across Wales.
The IFW offers a range of commercial finance options with smaller loans from £25,000 to £100,000, debt finance from £100,000 to £2 million and equity investment up to £5 million. The fund covers the whole of Wales, including rural, coastal and urban areas.
The IFW has already generated substantial interest and enquiries. A Roadshow presentation is being held at the Swansea Arena on 22nd February. For more information and to register for the Roadshow presentation, see https://www.british-business-bank.co.uk/nations-and-regions-investment-funds/investment-fund-for-wales-ifw/.
Add to this the well-established British Growth Fund (www.bgf.co.uk), which has a dedicated team in Wales and (like the Development Bank for Wales) can look at management buyout and owner realisation/exit plans as part of an investment package and we in the Principality now have an excellent group of well managed institutional investors for ambitious and well-run SMEs to pitch to. All with the ability to invest serious sums of money to enable Welsh businesses to achieve “next-level” growth.
For ambitious and well-run businesses in Wales, now really is the time to go for it!
Peter Lynn and Partners’ dedicated corporate team can advise you on the best routes to finding and securing investment and help you negotiate the right investment deal for your business.
For preliminary advice and guidance please contact [email protected]