Blog: Dispelling the myths of equity finance
I recently attended a meeting of the Yorkshire and Humber Regional Board of the EEF in Sheffield and was pleasantly surprised by the positive discussions which took place.
It was very well attended with representatives from some of the ‘big hitters’ in the region, discussing a number of important areas to stimulate and support growth.
A topic of discussion was Finance Yorkshire’s Equity Linked Finance and I wanted to use this blog as a way of dispelling some misconceptions about the fund which may be putting off companies from applying.
I particularly wanted to stress that the Equity Linked Finance fund does not take a majority shareholding in any investee company. We take a minority shareholding only and do not look to control the business.
We invest in the team and the executives at the company and only wish to provide support in developing the business’s growth, not run it for you.
The Equity Linked Finance fund is flexible and does not only provide equity investment, but also offers a mixture of debt and mezzanine finance.
We can buy new shares in your company, and are repaid when you sell or refinance the business in a few years time. We can also buy some shares and make a loan which the company repays over a period of time.
Alternatively, Finance Yorkshire can make a loan to the company, which it repays at some future time with some interest rolled up. This is usually paid at the end together with a redemption premium based on the success of the business.
We look for applications from growth companies, from a wide range of sectors, but all with plans for development. The finance available ranges from £100,000 to £2million and includes growth capital for product development, capital expenditure through purchase of assets or working capital to support stock levels and work in progress. In other words, any key area of your business which will generate growth and profitability.
Millions of pounds have already been invested in successful companies and I would urge you to take a look in the case-studies section of our website at the type of equity linked deals we have already made.
Note: this news article is from Finance Yorkshire’s previous fund. Read more about Finance Yorkshire