Raising Finance

Funding from an external source can provide a crucial launch pad to grow your business – but you need to know where to get the money from,  how to apply for it, and whether you meet all the criteria.

At Pierce we have have key relationships with banks, private investors and grant agencies to help find a loan and knowledge regarding public funding opportunities. With our expert advice we’ll support you from planning an investment forecast to meeting the bank manager.

We have been helping businesses for many years successfully apply for funding to kick start growth.

Bank Funding

Bank funding, or the lack of, is one of the most frequently debated and discussed subjects in the business world today. Banks are constantly criticised for reluctance to lend to small and medium sized enterprises.

The right approach to bank funding applications is however a robust financial model together with a narrative business plan which will provide the key to success. The business plan together with accurate and timely management accounts information will provide confidence to the banks and make them more likely to lend. In our experience, with the right approach, banks have still got the appetite for lending to the right businesses.

The Enterprise Finance Guarantee Scheme is still an important consideration when approaching banks. Pierce have been successful with such funding applications on behalf of clients in 2013.

The Funding for Lending Scheme has been widely publicised and promoted by the Government and the banks. The Scheme was extended in April 2013 for another year and provides cheaper lending by virtue of subsidised interest rates and arrangement fee free loans. Pierce have also had success in obtaining funding for clients in 2013 under FLS.

Asset Based Lending (ABL)

Traditional Asset Based Lending revolves around “Receivables”, i.e. invoice discounting or factoring. ABLs typically will lend against a debtor book and increasingly are providing other structured debt solutions by way of equipment, property and stock lending and unsecured loans (cash flow lending).

Asset Based Lending has become increasingly popular in recent years as an alternative to traditional overdraft. The working capital solution provided by ABL is more flexible than overdrafts for growing businesses and is also a preferred form of lending for the banks.

Businesses involved in contractual work are less suitable for invoice discounting due to the risk attached to part-fulfilled contracts however specialist ABLs such as Bibby can provide solutions in this area.

Some ABLs for example Lombard and Hitachi will provide standalone equipment finance, either for new purchases or as refinance of existing assets.

Development Capital

Development capital is equity funding for the expansion of established and profitable firms (those that have passed the start up phase) which is less risky and more rewarding than funding new ventures.

Providers of such capital include the Business Growth Fund, funded by the mainstream banks for investments between £2 and £10m, for which minority equity stakes are required (10% – 40%).

For smaller businesses, Enterprise Ventures (EV) have a mezzanine development capital fund. This fund provides finance from £750k to £2m to expanding trading businesses in which the fund manager will require an equity stake. Capital structures can include a combination of equity, quasi-equity or mezzanine capital. The mezzanine funding from EV provides a loan with a small equity option.

Private investors and investor “clubs” are also a good source of development capital.

Private Equity

Private equity is a funding source provided by a private equity firm, a venture capital firm or an angel investor, and consists of equity securities, either by way of ordinary shares or preference shares. Such equity is not operated on a stock exchange.

Private equity firms provide capital for leveraged buy-outs of companies or assets by way of introducing debt and equity into a target business.

YFM Private Equity provide up to £10m of equity into fast growing companies. Other providers of private equity solutions for expanding businesses include Gresham Private Equity and Maven Capital Partners.

Private equity firms also provide growth capital (expansion or Development Capital), and venture capital provided to early stage high potential, high growth start up companies.

Private equity firms that provide venture capital to start up and young growing companies in the UK include Enterprise Ventures (EV), Seneca Partners and PHD Equity Partners.

Angel investors will typically be high net worth (HNW) individuals, who look for investment opportunities, either acting alone or as part of a syndicate.

Funding Circle

Funding Circle is an online marketplace to help businesses find finance. The fund is backed by private equity and significant high net worth individuals and is open to individuals looking to invest modest sums for preferable returns compared to bank deposits. Loans to date since the scheme was founded in 2010 exceed £100m and returns to investors have averaged in excess of 6 percent. Average cost to businesses are quoted at between 7.1 and 9.4 percent.

Loans to businesses are available from £5k to £1m to provide for working capital, expansion capital, asset finance and one-off business expenses. Loan terms are between six months and five years.

In December 2012, the Government announced their intention to lend £20m to British small businesses through Funding Circle as part of the Government Business Finance Partnership Scheme (BFP). This became effective from 25 March 2013, and the Government has commenced lending as part of the scheme.

Lancashire County Council became the first local authority in the UK to invest in the Funding Circle, making an initial investment of £100k in November 2012, with potential for significant investment over the next five years.

Pierce business clients have made successful applications to Funding Circle where banks have been unable to lend thus filling a gap when conventional lending has not been available.

Grants And Government Funding

The North West Fund;  This fund provides debt and equity finance from £50k to £2m to SMEs based in or re-locating to the North West of England, to start, develop or grow. The new fund is a £155m investment fund financed by the European Regional Development Fund and the European Investment Bank. The fund comprises six specific funds, Venture Capital, Mezzanine (Development Capital), Loans Plus, Digital and Creative, Biomedical and Energy and Environmental. Five different fund managers operate these specific funds and Pierce regularly make applications to the funds on behalf of clients.

Accelerating Business Growth (ABG); This is a competitive grant scheme that funds business growth projects across Lancashire that commit to significant job creation, match funding and making an impact on the Lancashire economy. ABG is a result of a successful bid by Regenerate Pennine Lancashire to a national government programme called the Regional Growth Fund (RGF). The scheme is for capital investment that stimulates growth and creates jobs, and includes machinery acquisition, property improvement, building expansion and infrastructure improvement.

Minimum grant funding of £20,000 to a maximum of £150,000 is available dependant on the project cost and job creation.

The grant is allocated on a 1:4 ratio on 20 per cent of the project cost.  So on a total project cost of £750,000, the grant would be £150,000, the maximum available grant.

Eligible businesses must be based in Lancashire (including Blackburn with Darwen and Blackpool which are unitary authorities) or be moving to the area, must have plans for growth and jobs within 12 months of project start and be Small or Medium Sized Enterprises (SME).

Pierce have successfully applied for the RGF grant funding for clients. The process involves an Expression of Interest online form leading to a full application.

Rosebud Business Funding; This scheme is administered by Lancashire County Council (LCC) and is available to businesses located in LCC administrative areas and is designed to encourage growth and jobs.

Support is available through North West Access to Finance, providing free advice and support on a range of finance options for business in the North West.

Rosebud Micro provides loans up to £50k, Rosebud Business Finance provides loans and equity between £50k and £1m.

Sector specialisms are:

  • Aerospace
  • Advanced manufacturing
  • Creative and digital
  • Low carbon and environmental
  • Finance and professional

Rosebud Finance is not available in the unitary authorities of Blackburn with Darwen or Blackpool.

Other Government and Local Funding Schemes

Business Growth Fund (BGF); This is an equity investment scheme set up by the main banks and the Government for companies between £5m and £100m turnover, providing equity investment between £2m and £10m for development and growth.

Funding for Lending (FLS); This is a government subsidised scheme administered by RBS, Lloyds TSB, Santander, Barclays and Aldermore, and provides discounted interest rates and arrangement fee free loans for development capital.

The Lancashire Innovation Network;  This provides funding support for mentoring for IT, product development and process innovation.

Pennine Leap; This provides funding support to provide a start up programme, providing business coaching and international trade support in Blackburn with Darwen, Burnley, Hyndburn, Pendle and Rossendale.


  • John Green

    Director and Chairman
  • David Sharpe