New dawn for business in Cornwall and Scilly
Sir Edward George, Governor of the Bank of England, has today officially launched Finance Cornwall, a new £20 million investment fund hailed as a new dawn for business in Cornwall and the Isles of Scilly.
Finance Cornwall provides loans and equity investments ranging from just £5,000 up to £750,000 to small and medium-sized businesses that find it difficult to find funding from other sources.
This so-called “funding gap” has been identified as a major inhibitor to the growth of small and medium sized companies in Cornwall. By filling that gap, Finance Cornwall expects to create more than 2,000 jobs and assist some 400 businesses in Cornwall and the Isles of Scilly in the next five years.
Speaking at today’s official launch, Sir Edward said: “Finance Cornwall will fill a funding gap and help to promote entrepreneurship and the growth of local businesses. It will offer flexible finance to businesses looking to establish themselves in Cornwall and that’s good news not just for this area but for the UK economy as a whole.
“Finance Cornwall will take its place alongside other initiatives contributing to what is an economic renaissance in Cornwall, including the huge success of the Eden Project and the proposed Combined Universities in Cornwall and the Peninsular Medical School.”
Finance Cornwall chairman Tim Jones said: “Today’s launch marks the culmination of three years’ hard work by a variety of organisations and individuals, and is something in which I have been personally involved since day one. We expect Finance Cornwall to be a cornerstone of Cornwall’s economic development now and into the future, offering businesses the funds they need to grow and prosper. It is gratifying to have established a landmark financial institution dedicated to Cornwall.”
Finance Cornwall is funded with £11 million from the Objective One European funding programme for Cornwall and Scilly; £10.12 million from Barclays and £880,000 from Cornwall County Council.
Robin Teverson, chief executive of Finance Cornwall, said: “All our research has shown that there is a desperate need for the types of funding packages Finance Cornwall is able to offer. Today’s launch really does represent a new dawn for business in Cornwall and Scilly and we’re delighted with the early demand we have seen, with £12.6 million worth of deals already under negotiation.
“Finance Cornwall will become a key player in the financial infrastructure of Cornwall and Scilly, not just for the duration of the Objective One programme but for the long term.”
Bill Bawden, Objective One programme director, said: “A key remit of the Objective One funding programme is to create a prosperous Cornwall and Scilly and an equality of opportunity. By creating these new sources of funding and providing businesses with access to the financial support they need, Finance Cornwall is helping to achieve just that.”
Julian Jenkins, area corporate manager in Devon and Cornwall for Barclays Bank, which is investing £84 million across the four Objective One regions of the UK through the Objective One Alliance, said: “These new funds will meet a clearly defined need in Cornwall for debt finance for growing small and medium-sized businesses which would otherwise have difficulty in securing funding. Working with the European Commission and the members of the Objective One Alliance makes it possible for us to provide finance on a commercial basis which will enable these businesses to fulfil their potential.”
John Lobb, leader of Cornwall County Council said: “The County Council welcomes the start of operations by Finance Cornwall and hopes that it will provide another important step in regenerating Cornwall's economy. The County Council fully supports the work of Finance Cornwall and has agreed an £880,000 contribution towards the investments in companies that will be made over the next five years."
Finance Cornwall offers funding to businesses with commercially viable projects where the normal providers of finance, such as banks, cannot provide all the money that is needed. This might be because the business is too small, it does not have a sufficient track record of trading, the balance sheet is weak or the business does not have enough collateral.
Finance Cornwall offers three main products, available to businesses whose principal place of operation is, or will be, in the Objective One area of Cornwall and Scilly. The funds are managed by Alliance Fund Managers Ltd, which is regulated by the Financial Services Authority in the course of investment business.
The three funds are:
Business Loan Fund: loans from £5,000 up to £50,000 for viable, privately owned small and medium sized enterprises in Cornwall and Scilly whose funding needs cannot be fully met from other sources.
Terms: maximum five years at fixed rates of interest for duration of loan.
Contact: Darren Gowling or David Furse
Telephone: 01872 247278
Email: firstname.lastname@example.org or email@example.com
Mezzanine Loan Fund: loans from £50,000 to £250,000 with equity options for viable, privately owned small and medium sized enterprises in Cornwall and Scilly whose funding needs cannot be fully met from other sources.
Terms: includes the option of an equity shareholding in the company once the loan has been repaid. Enterprises will be entitled to an annual rebate of 40% of the interest charged provided the conditions of the loan have been fully satisfied. Capital holidays are available to suit the cash flow needs of the applicants.
Contact: David Furse, Investment Director Mezzanine Fund
Telephone: 01872 247278
Equity Fund: equity investment of between £50,000 and £500,000 for viable, privately owned small and medium sized enterprises in Cornwall and Scilly whose funding needs cannot be fully met from other sources. Attractive to businesses that have exhausted alternative loan or private resources but still need additional funds for growth.
Terms: although a long term and supportive shareholder in the companies in which it invests, the fund has a limited life of ten years (which expires in 2011) and any shareholding must be realised within this period.
Contact: Darren Gowling, Investment Director Equity Fund
Telephone: 01872 247277
In addition to the funds, Finance Cornwall is setting up a Money with Management business mentoring programme to support the growth of local businesses and increase their management capacity.
Free photography from today’s launch will be available this afternoon by contacting the Apex Photographic agency on 01392 824024.
More information and FAQs can be found in the 'Grants & Loans' section. Click on 'Project Lists' for a link to the Finance Cornwall website.
Objective One Partnership Office
Truro TR1 2UD