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17.04.03
Funding injection helps new emploment agency to grow

A fast-growing new employment agency will be able to continue its expansion thanks to help from the Objective One funded Finance Cornwall, the £20 million investment fund for businesses in or locating to Cornwall.

AVA Temp UK Employment Services was set up by Lloyd Saunders in February 2002 and – through a philosophy of providing high levels of customer service – has successfully secured a number of contracts.

Lloyd literally started the business out of his bedroom but moved to offices in Grampound Road last August and took on two full-time consultants and an administrator as the company grew.

He said: "To begin with, we had a couple of small contracts but because of the service level we provided those have grown. We've increased our profile with local advertising and developed the company so that we are more effective by providing new contracts with a dedicated Contract Consultant."

However, because the company had no track record of trading and Lloyd was unable to invest further capital in the business, securing other sources of investment became essential in order to enable growth to continue.

Now, Finance Cornwall's Business Loan Fund is providing a loan matched funded by a loan from the HSBC – to give AVA Temp UK the working capital needed to provide permanent positions for its own staff and to have the flexibility to open and staff new contracts.

Lloyd said: "We needed an injection of cash to give us a safety net and to allow us to keep up with the fast growth of the company."

AVA Temp UK was introduced to Finance Cornwall by Andrew Allen from Winter Rule Chartered Accountants based in Truro.

Andrew said: "We have enjoyed working with Lloyd since he started the business, and guiding him through his dramatic first year. The main obstacle during this time has been a continuing need for additional finance to meet the growing demand from clients."

The traditional bank funding route was not available to AVA Temp due to a lack of track record and security. Finance Cornwall offered a mechanism to provide matched funding so the business was able to in turn obtain additional funding from the bank, that otherwise would not have been available.

Jeff Lenihan, Finance Cornwall's Business Loan Fund manager, said: "We are delighted that we have been able to provide AVA Temp UK with the necessary funding to enable the business to expand.

"The company has developed well since its creation only fourteen months ago, but an injection of additional capital was necessary for the company to continue to grow and take advantage of the momentum it had created. Being a relatively young company, it can be extremely difficult to secure funding, but this precisely where Finance Cornwall can help - by stepping in to offer a vital role in securing a package of funding."

The Finance Cornwall Business Loan Fund can provide between £5,000 and £50,000 to qualifying businesses over a period of up to five years, and because interest rates are fixed for the duration of the loan applicants have the security and peace of mind that rates won't change. They can also qualify for a 40% interest rebate subject to the conditions of the loan being met, and we can provide ongoing subsidised support with a mentor if appropriate.

Finance Cornwall operates three different funds providing loans and equity investments ranging from £5,000 up to £650,000 to viable small and medium-sized businesses that cannot source all the funding they need from elsewhere. 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.

Funding is available to businesses whose principal place of operation is, or will be, in Cornwall or the Isles of Scilly. The funds are managed by Alliance Fund Managers Ltd, which is regulated by the Financial Services Authority in the course of investment business.

To find out more visit www.financecornwall.co.uk

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Editor's notes:

Finance Cornwall background

Finance Cornwall is a £20 million investment fund backed by £9 million from the Objective One European Regional Development Fund, £10.12 million from Barclays Bank and £880,000 from Cornwall County Council.

The three Finance Cornwall 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.

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.

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.

Finance Cornwall funds are managed by Alliance Fund Managers Ltd, which is regulated by the Financial Services Authority in the course of investment business.

For more information contact:

Jeff Lenihan
Business Loan Fund Manager
Finance Cornwall
01872 272288
www.financecornwall.co.uk

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Jason Clark
Communications Manager
Objective One Partnership Office
Castle House
Pydar Street
Truro TR1 2UD
Tel: 01872 241379
Fax: 01872 241388
jason@dclark.co.uk

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