UNLOCKING FINANCE:

FUNDING FORCE

The Government's announcement of its £20 billion 'Real Help for Business' package will help businesses in the South East  through the downturn.  SEEDA through Business Link and Finance South East will also continue to offer other financial support and advice.

Included in the support funding announced by Lord Mandelson is a £10bn Working Capital Scheme, which will secure up to £20bn of short term bank lending to companies with a turnover of up to £500m.  Next is an Enterprise Finance Guarantee Scheme, securing up to £1.3bn of additional bank loans to small firms with a turnover of up to £25m, while a £75m Capital for Enterprise Fund (£50m from Government, augmented by £25m from the banks) will  invest in small businesses which need equity.

The many other schemes in place include:

Bridging Mezzanine Debt Fund
Through Finance South East, SEEDA is providing up to £3m in the Bridging Mezzanine Debt Fund. It will be directed at fully established, viable and growing businesses currently facing difficulties obtaining credit through banks or other traditional routes.  Funding is provided at commercial rates for these unsecured loans, and interest is rolled up and paid at maturity, thereby making the Fund attractive to some businesses urgently needing to address liquidity problems.

Commercialisation Fund: A new fund of up to £3 million will support businesses with high growth potential to bring new products and services to market.  It forms part of the £20 million South East Funding Escalator.

Government Equity Scheme: SEEDA, along with all other RDAs, is contributing to this scheme, which amounts to £50 million nationally and is used to convert businesses' debts into equity. The scheme is targeted at small businesses unable to service their borrowing.  It can sustain equity to enable them to restructure their balance sheets so that they can access more credit if needed. 

Business Payment Support Service:  The Government also announced a scheme for companies worried about meeting tax, NI or other payments owed to HM Revenue & Customs (HMRC).  For details go to www.businesslink.gov.uk

Grant for Business Investment (GBI): Capital grants under the GBI scheme have been extended to the entire South East for eligible SMEs with long-term viability whose investment plans are being held up by current economic conditions.

Business Link also reports that other means of finance can be explored -
Capitalise business support: Unsecured, high interest loans up to £20k are available from organisations such as www.capitalise.org. Application is via a website, and requires a business plan.  Businesses with viable projects are invited to present to a panel. 

Energy saving loans:  The Carbon Trust offers interest free loans from £5,000 upwards for to help SMEs invest in carbon saving equipment. These are unsecured and repayable over four years. 

Equity funding: Obtain funding from venture capitalists or Business Angels through Finance South East (www.financesoutheast.com) which runs the South East Capital Alliance fund, supported by Business Link.  Companies can also apply to the South East Growth Fund. (www.segrowthfund.co.uk)

Rural Businesses: Support for rural businesses comes through the Leader Grant scheme (www.seeda.co.uk/rdpe).  SEEDA is making £27 million in grant funding available across the region.

Business Link is the first port of call for all enquiries relating from businesses looking for financial support.  For more information, go to ww.businesslink.gov.uk/southeast, or phone 0845 600 9 006