Miles Robinson & Co

New business loan schemes for SMEs announced

Miles Robinson — Wed, 14 Jan 2009 18:23:41 +0000

Of the three we feel the most interesting is the Enterprise Finance Guarantee Scheme. This scheme replaces the SFLGS of which we have long been a fan. The principal feaures of the new scheme are:-

It is designed to enable businesses to secure loans of between £1,000 and £1m, repayable over 10 years.
Most businesses in most sectors are eligible for the scheme, but those in the agriculture, coal and steel sectors are not eligible.
It is open to businesses with a turnover of up to £25m.
The government guarantees 75% of the loan, with the banks covering the remaining 25%.
At moment there seems to be some confusion as what the premium will cost, with some saying as little as 1% pa, others 1.5% pa & another saying it will remain the same as the SFLGS at 2% pa.
The guarantees will be available through Barclays, Clydesdale/Yorkshire Bank, HBOS, HSBC, Lloyds TSB, RBS/Natwest and Northern Bank. It will be available from other lenders if they apply.
The scheme will operate until March 2010.

The scheme has been designed to support up to £1.3bn of new lending to the SME sector and is an extension of the £1bn Small Business Finance Scheme outlined in the pre-Budget report.

In our view the principal attraction is that the new lending is fixed term, from 3 months up to 10 years, and therefore offers SMEs much greater funding security.

It is also available to used to substitute for other borrowing, eg overdrafts repayable on demand, & the borrower does not have to prove that he has no unencumbered assets, which is a welcome new development.

SOME GOOD ADVICE IN UNCERTAIN TIMES, from Jon Moulton

Miles Robinson — Tue, 23 Sep 2008 10:39:59 +0000

Jon Moulton (founder of Alchemy Partners, private equity investors) is reported in the Torygraph (23/09/08) as urging business people to use some tried & tested disciplines to survive the coming recession. In his view,” things are going to get worse at a pace nobody has ever seen”.

The essence of his SURVIVAL advice is CASH PRESERVATION, before sales. So what does the mean in practice? It means, examine each business decision for its EFFECT ON CASH, eg
·         Capital expenditure – can we make do?
·         Stock – how can we reduce it?
·         Debtors – how can we make our customers pay us more quickly?
·         Creditors – can we squeeze more advantageous terms, without damaging our relationship?
·         Bank facilities – how can we keep our bank happy?

He goes on:
· Credit checking, together with a ruthless policy of switching off supply in the face of failure to pay within 7 days of agreed terms, backed up by “vigorous” debt chasing, must be the norm.
· “ … That means really good sales & cash forecasting, and a really good understanding of your cost base”.

All this is about YOU being in CONTROL of YOUR business, and you can’t do this without INFORMATION.

Staff motivation & behaviour is also a factor. “A year ago it was ‘Where is my bonus?’. Now it is ‘job’”. And on the sales side, there now needs to be a fundamental change of emphasis. “Rather than a sale at any price, you have to think ‘Can they pay? Can they pay?’”.

Helping owner/managers to control their growing businesses – by ensuring that they have the right up-to-date information at their finger tips – is what we do. Contact Us for a free consultation.

Boost for Small Firms Loan Scheme - but …

Miles Robinson — Wed, 20 Aug 2008 11:52:49 +0000

The government announced recently an increase of 20% in its £300m capped commitment to the SFLGS, but since the take-up actually declined to £207m (for FYE 03/08) this is meaningless. Instead, what is needed is for them to give the banks a good kick up the backside.

We have long been a fan of this scheme, which was originally set up in 1981. However, the banks have consistently done their best to hide its existence ever since as is shown by the latest, miniscule, figures for the amounts lent by the big 4 banks: viz RBS/NatWest £80.7m, Lloyds TSB £39.3m, HSBC £31.1m, Barclays £22.8m. One bank reported that only 61% of its business teams used the scheme at all last year - down from 70% the year before.

Quite simply, they don’t like it because they have to take some unsecured risk, albeit only 25% after the 75% government guarantee. They would rather insist on full security of bricks & mortar or push the customer towards their expensive factoring subsidiary; or say that the customer must find the money as equity elsewhere.

HOWEVER, whilst this depressing scenario may represent the national picture it does not mean that a sensible lending proposal locally has no chance of success.

Our advice is, if at first you don’t succeed, learn from the turn down, amend the proposal if necessry & try again; & again … - with different banks/branches.

If you want some help, Contact Us

Capital for Enterprise launches today

Miles Robinson — Tue, 01 Apr 2008 18:58:22 +0000

This new body is in charge of delivering all the Government’s small company financing initiatives on behalf of BERR.

These now include:-

Grants for Research & Development
Early Growth Funds
Enterprise Capital Funds
Regional Venture Capital Funds
Small Firms Loan Guarantee

etc!

Grants are great, if you can get them. Loans guaranteed by the government are pretty good too. But you can part with a share of your business, however small, only once; so our advice is only do so once you have established its true worth, and make the greedy capitalist pay top dollar!

If you want some help, Contact us .

New IT guide for SMEs

Miles Robinson — Mon, 31 Mar 2008 11:27:07 +0000

SMEs could save millions with the right IT infrastructure! So says a recent report by Adroit Economics commissioned by SEEDA. So their sponsoring of the new Business IT Guide would seem to be helpful.

It has been developed explicitly for small businesses by many of the usual suspects (Microsoft, et al) and in tests it is claimed that more than 87% of recipients said the advice given was easy to understand, relevant & could improve their profitability.

Topics for advice include: Using e-mail, Getting on-line, Choosing a website, Setting up Home/Office, etc, and it seems relatively easy to navigate.

So it is probably worth checking out before buying off the shelf from PC World or other friendly retailer, designer or consultant.

ISAs - FT Deal of Week

Miles Robinson — Mon, 10 Mar 2008 11:49:31 +0000

In Saturday’s FT they cited Leeds Building Society’s Inflation Buster ISA, paying RPI plus 2.5% as its deal of the week and I rather agree.

The government tries to distract us from cottoning on to the fact that most items in the family budget are rising a lot faster that their own measures are allowed to track. And does anyone think that these increases are going to reverse?

Current RPI is 4.1%, + 2.5% = 6.6%, ie a good bit better than most others; though Barclays Tax Haven ISA, just launched last week, runs it close.

Whilst the stock market looks so uncertain these tax free rates look attractive.

Small businesses ask accountants for advice before Business Link

Miles Robinson — Mon, 10 Mar 2008 11:02:07 +0000

A government survey of more than 10,000 small businesses found that only 5% had sought help from Business Link when setting up, compared with 16% who spoke to their bank & 12% to their accountant; which concurs with surveys by Federation of Small Businesses, which placed BL 9th, behind suppliers, trade association, family & customers!

The wonder is, why should the “friendly” bank “manager” rank so high, when the accountant’s advice is impartial & mostly free if given by way of a short phone call!

For further info Contact us.

Capital Gains Tax rules change wef 6th April, 2008

Miles Robinson — Thu, 06 Mar 2008 17:32:10 +0000

After much dithering the Government published its draft legislation on 28th February. The main features of the changes are:-

assets held on 31st March, 1982 will be re-based to their value on that date;
indexation allowance will be abolished;
taper relief will be abolished;
a flat rate of 18% will apply to all gains (in excess of the annual exemption - £9,200 for 07/08), regardless of the type of asset disposed of;
a new entrepreneurs’s relief will be introduced for business owners & shareholder who are employees or office holders.

Whilst the new rules will generally be favourable to investors in property & quoted shares, there are a number of categories of taxpayer who potentially face a higher tax bill.

If you need advice or further info please Contact us.

Husband/wife companies - BEWARE Anti-Income shifting legislation to come

Miles Robinson — Thu, 06 Mar 2008 17:06:41 +0000

Current rules permit a flexible strategy for distribution of corporate profits but the Government has announced its intention to legislate to block what it sees as an unjustifiable loophole wef 6th April, 2008.

All those affected should therefore consider implementing a full distribution of available profits, properly authorised & documented, prior to 5th April, 2008.

Also, recently announced changes to Capital Gains Tax also come into force wef 6th April, 2008. As a consequence it may be materially beneficial to consider liquidating the company in advance of the deadline if the accumulated profits which cannot be paid out as either dividend or salary exceed £40,000.

If you need further info or advice Contact us.

New equity fund investing in SMEs in South East launched

Miles Robinson — Tue, 04 Mar 2008 11:35:01 +0000

Finance South East has announced the launch The South East Seed Fund. This is a £5m equity fund that invests up to £250,000 in small and medium-sized enterprises, which may include university spin-outs/spin-ins.

Launched in January 2008, the Fund operates on a commercial investment return basis and seeks to invest only in opportunities that it believes have the highest potential for success.

This is a welcome addition to what is now a very comprehensive package of enterprise funding facilities in FSE’s portfolio, which now comprises:-
* PoCKeT Fund: Awards range from £5,000 to £30,000, specifically for “proof of concept” development where the knowledge and expertise of a Higher Education Institution (HEI) or Public Sector Research Establishment (PRSE) can assist to make them a commercial reality.
* Commercialisation Catalyst Fund: loans between £20,000 and £30,000 to SE companies looking to commercialise their technologies, products or services that are close to market.
* CommercialiSE PoC Fund: provides up to £50,000 to university staff undertaking work to prove a technology for commercial exploitation.
* Acelerator Fund: is a £10M mezzanine loan fund providing an innovative source of finance for growth companies in the South East region.

For further info or help in drafting an application please Contact us