Newspaper article The Journal (Newcastle, England)

Trust Helps Firms to Thrive

Newspaper article The Journal (Newcastle, England)

Trust Helps Firms to Thrive

Article excerpt

Byline: By Barrie Hensby

Getting funding for business development can be a real challenge, especially at the lower end of the scale. Barrie Hensby, chief executive at North-East fund management firm NEL, looks at how some companies are able to fund relatively small projects and how successful fund management firms are helping them achieve their plans.

If a finance director were to ask "How can I raise the money that my business needs to expand?" the answer would almost always begin with the appointment of an experienced financial adviser, who can make an enormous difference to the quality of a smaller business proposal and advise on the best way to get together a package of funds from different sources.

This package could include personal funds (vital to show commitment to the project), funding from friends and families, and money (in the form of debt capital) from the bank. Increasing use is being made of the Small Firms Loan Guarantee Scheme to underwrite term loans of up to pounds 250,000, provided of course that the business plan shows that the company can service and repay the debt.

Asset financing could also be called upon as a funding source. A large array of products is now available, ranging from hire purchase to more complex, and generally more `racy', stock and debt financing.

The business angel network is also going through something of a revival, so for financial investment of up to about pounds 200,000, this would be an avenue to explore. Bear in mind however, that angels more often than not wish to be involved in the close management of the business.

Often as the final piece in the jigsaw, fund managers such as NEL can be approached. Our funds are specifically designed to provide equity and debt capital to smaller businesses with typical investments ranging from pounds 250,000-pounds 800,000. …

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