Investment leap of faith needed to secure growth

Alex McWhirter Chief Executive of Finance Yorkshire

Alex McWhirter, Chief Executive of Finance Yorkshire reviews the financial landscape for small and medium sized enterprises and looks at how the sector will progress during 2013.

The success of this summer’s London 2012 Olympic and Paralympic Games demonstrated that planning and investing in the future is a massively worthwhile exercise. I think that all businesses – ours included – can learn from the Olympic achievement.

Looking back over the last 12 months, we have had a very busy and constructive year. By the end of September, we had provided investment to our 200th SME. By November we had invested more than £30m in SMEs in Yorkshire and Humber. And we’ve now taken the amount of funding provided to businesses to more than £32.5m. We’ve achieved all of this in just over two years, which is rewarding and demonstrates that we are making a difference.

We said at the beginning of this year that the key for us was to increase our investment rate and I am pleased to say we have managed to do that despite the difficult economic conditions.

A total of 280 investments have been completed, creating and safeguarding more than 5,190 jobs and generated a private sector leverage of more than £56m.

Some of the highlights during the last 12 months include our £1.29m Equity Linked investment in Turbine Efficiency Group, which specialises in the supply and maintenance of gas turbines around the world

This is our largest deal to date and has enabled the company to open a new 4,000sqft facility in Doncaster to expand its services and global operations.

Also, we completed a £400,000 Seedcorn investment in Carlton Manufacturing, a developer and manufacturer of sustainable construction materials. Carlton moved to its new 17,000 sq ft premises on Newmillerdam Business Park, Wakefield in April and has since expanded its workforce as a direct result of our investment.

Meanwhile, The Beautiful Meme in York is building its brand design portfolio of clients thanks to a £40,000 Business Loan from Finance Yorkshire. The funding has enabled the firm to employ a new designer and copywriter, meet additional overhead costs and freed up time for senior staff to concentrate on pitching for new clients.

All three are great examples of the diverse nature of investments we have made across the county in a variety of sectors, but we cannot rest on our laurels as 2013 will be a vitally important year for Finance Yorkshire. We need to increase the investment levels completed by the Fund across all sectors of interest.

We have already put in place a significant level of groundwork to ensure our activity leads to increased momentum in providing investment for SMEs. We will continue to provide the most appropriate investment package to companies that we work with and this will be our mantra for 2013.

However, confidence in the market is the key element for success. If this is lacking, owner managers will be reluctant to develop and expand their businesses, reducing the possibility of further growth in the long-term.

My encouragement to business owners and managers is to be confident and implement business plans that can help them take advantage of market opportunities. Whatever you plan to invest in, believe you will reap the rewards. The impact created from such investments will increase competitive edge, improve margins and enable businesses to stay ahead of their competitors.

There are numerous sources of finance available to owner managers, but this landscape of funding lacks cohesion, and faced with such confusion, they tend to approach the likes of banks and friends to secure finance.

This must change in order for the UK economy to grow. Hundreds of small and medium-sized businesses have found additional gap funding with support from organisations such as Finance Yorkshire, but more needs to be done to enable thousands to access all forms of finance in a simple and efficient way.

Therefore, the key priorities for the year ahead should be developing greater cohesion, untangling the financial landscape and taking a leap of faith by making more investments.

If we achieve these I am certain it will lead to one thing – sustainable economic growth and prosperity across Yorkshire and Humber.

Note: this news article is from Finance Yorkshire’s previous fund. Read more about Finance Yorkshire