Access to Finance
Following the coalition government’s decision to abolish regional development agencies by April 2012, the government has required the Regional Development Agencies to substantially reduce their expenditure. The North West Development Agency (NWDA) is working closely with partners in the region to manage the transition of its responsibilities. The Government’s plans include replacing RDAs with Local Economic Partnerships (LEPs).
Consequently the NWDA is currently not accepting any new grant applications, or processing ant existing ones at the present time. The grants affected by the current situation are:
· Grants for Research and Development (GRAND)
· Grants for Business Investment (GBI)
· Innovation Vouchers
In the interim period whilst the LEP's are formulated, there are still a wide range of both national and regional support schemes available to businesses particularly the small to medium business population (SME’s). However due to changes in policy and financial limitations on the funding streams, in this section we can only give a ‘snapshot’ of some of the funding initiatives currently available. We have also tried to highlight schemes that may be particularly relevant to Medilink North West Members.
It should be noted that most of the initiatives covered below are currently funded via the Northwest Development Agency (NWDA). Although they may be managed by other agencies particularly Business Link Northwest. Schemes can be broadly categorised into three areas.
1. GRANTS
GRAND
- Grants for research and development (GRAND previously called SMART). This fund is designed to help businesses develop technically innovative products and processes (including research trials and product testing) that have commercial potential. Members should note that within the GRAND scheme a new initiative has recently been introduced. The ‘Proof of Market Grant’ is available to help applicants investigate the commercial viability of the idea. Grants of 60% of the costs are available (£5,000 to £20,000)
Other parts of the GRAND scheme cover: - Micro Project Grants –Small scale developments and prototypes, project timescales 12 months duration, 45% of R&D costs (£5.000 to £20,000).
- Research Project Grants – To assess the technical and commercial viability of turning innovative technology into new products or services, project timescales between 6 and 18 months duration, 60% of costs (£20,000 to £100,000).
- Development Project Grants - To develop a pre-production prototype of a new product or process involving significant technological advancement including new carbon reduction technologies. Project timescales between 6 and 36 months duration, 35% to 40% of costs £20,000 to £250,000.
- Exceptional Research- to research new technology that is strategically important for the UK in one or more sectors. Project timescales between 6-36 months, 60% of eligible costs, £100,000 - £250,000.
- Exceptional Development - to develop new technology that is strategically important for the UK in one or more sectors. Timescales up to three years, grants are avaliable up to 35% for companies employing between 50-250 employees and 40% for companies employing up to 50 employees, covering 40% of costs - £200,000-£500,000.
INNOVATION VOUCHERS
Innovation vouchers are designed to help Northwest businesses to purchase a knowledge provider’s expertise in order to develop innovation and enhance business and make it easier for more companies to access the knowledge base.
The scheme provides two levels of voucher, £3,000 and £7,000. The £3,000 voucher is a 100% grant and the £7,000 voucher is a 70% grant, businesses paying 30%.
The next round of applications will be 5th April 2010 (closing 30th April 2010) when 200 £3,000 and 50 £7,000 vouchers will be available.
A further round will open on the 2th August 2010 (closing 27th August 2010) when a similar number of vouchers will be available.
i4i INVENTION FOR INNOVATION
This potential source of grant funding is managed via the NHS National Institute for Health Research. It offers a number of funding streams including:
• Commercial Viability Study - projects are typically of a maximum of one year’s duration and a cost of no more than £100,000 with a maximum of 75% funding available.
• Collaborative Product Development– projects are typically up to three years duration building on the results of previous assessments and in collaboration between at least one industry and one academic research partner. The scheme aims to help participants to provide evidence of improved healthcare and commercial and intellectual property exploitation. Funding to a maximum of 50% of the total of the project costs, and £100,000 to £300,000 per year is available. The next call for interest opens on the 1st April 2010.
2. LOANS
• SMALL BUSINESS LOANS – This scheme is designed to help small business owners and social enterprises to start up and develop their business. Loans range between £3,000 to £50,000.
• LOAN FUND– This Scheme provides £50,000 to £250,000 loan funding and is available for innovative, viable small to medium enterprises seeking debt finance.
• THE ENTERPRISE FINANCE GUARANTEE (EFG) – The EFG is open to businesses with an annual turnover of up to £25 million who are currently not able to access the finance they need. This will enable a company to secure loans between £1,000 and £1 million.
• CAPITAL FOR ENTERPRISE FUND (CEF) – CEF is a new £75 million equity, bringing together £50 million of government money with £25 million from major banks the aim of the fund is to provide longer term capital to companies who have exhausted their traditional borrowing capacity.
3. FUNDING
• BUSINESS ANGEL FINANCE – This scheme provides access to a network of private equity investors who invest in new or expanding businesses. Typical levels of individual investment ranges between £10,000 and £500,000.
• VENTURE CAPITAL– This flexible equity based package, which can include Mezzanine Finance (loan linked to equity), from £250K to £1 million. This type of funding is particularly helpful to fast growing innovative businesses which have been unable to attract growth capital from traditional sources.
The above list is by no means exhaustive and undoubtedly each scheme comes with a set of criteria that must be met before an application is considered. The Medilink North West Business Development Team will be delighted to assist members in investigating the best source of assistance for their specific needs and the current status of any particularly scheme.
Looking towards the future and the encumbent Governments plans for the replacement of the NWDA's.
LEP- Local Growth
(Local Growth White Paper was published on 28 October 2010.1 It set out three key priorities)
a. Shifting power to local communities and businesses - by establishing dynamic local enterprise partnerships of local business and civic leaders, operating within an area that makes economic sense, which can provide the vision, knowledge and strategic leadership to set local priorities and empower communities to fulfil their potential.
b. Increasing confidence to invest – by creating the right conditions for growth through a consistent and efficient framework for investment, an effective planning framework and new incentives to make sure local communities benefit from development.
c. Focused investment – by tackling barriers to growth that the market will not address itself and supporting investment that will have a long term impact on growth.
As part this agenda, the White Paper announced the first tranche of approved Local Enterprise Partnerships, the opening of the Regional Growth Fund and a range of measures designed to provide incentives for local authorities to promote business growth.
Useful Links
Department of Business (LEP White Paper) - http://www.parliament.uk/briefingpapers/commons/lib/research/briefings/SNEP-05651.pdf
Business Link Northwest - www.businesslinknw.co.uk
i4i (National Institute for Health Research (NIHR) - www.nihr-ccf.org.uk