Special report: Liverpool City Region – funding and business support
THE landscape for business support in the region changed in the former Chancellor’s last Autumn Statement when all government business support services were axed.
Nik Ellis, chief executive of Whitfield Business Support and Laird Assessors, an expert witness firm, spoke at the round table discussion of the difficulties SMEs face when trying to get funding.
He said: “The frustration with the businesses that we’ve dealt with is that there isn’t easy access to funding or people who’ll listen. They struggle with banks or government funding tick boxes, so a lot of them are self-funded or they speak to an organisation like MSIF.”
This story is part of a 16-page special report on the Liverpool City Region.
To download the full report for free, click here
MSIF chief operating officer Lisa Greenhalgh empathised and said: “I’ve been working with MSIF for 12 years and since I’ve been here there’s always been a lack of business support for SMEs in the region.
“Towards the back end of last year, funding did stop and it impacted on the number of businesses who were coming to us.
“There has been support in the last few months, with funding through the LEP and growth hubs. We’ve seen more impact from that and start-ups and more businesses are coming forward for those facilities.
“Again it’s letting everyone know where to go. This is why we work closely with the LEP in terms of making it less confusing – so there’s one place to go to.
“We originally started with European funding nearly 22 years ago and matched that with private sector funding.
“We’ve repaid all our private sector funding and we are recycling our ERDF funding. We’ve got about £30m, some of that’s RGF.
“But that’s our own money now, so we invest it. We don’t have ERDF restrictions on it. We provide loan and equity investments to SMEs in Liverpool City Region at commercial rates.
“It’s not comparable to a bank because we support people who can’t get funding from a bank.
“But it’s at commercial rates and it reflects the risk we’re taking. We’re a not-for-profit organisation but we need to make reasonable returns on investment so that we have money to reinvest in new businesses.
“One of the main objectives from the original funding through ERDF was that even though we would back higher risk businesses, we would make commercially astute investments so that once the ERDF funding ceased, there would be a legacy fund which would continue to provide alternative finance for many more years to come and that is exactly what we’ve done. But we do take a risk and we have a higher loss rate than a bank.
“One of our strengths is, it’s not just the funding. We’re not like a bank in terms of giving you the money and leaving you to get on with it and if it doesn’t work we’ll put you in special measures. We stay close to the businesses we invest in and provide advice and support if they do get into trouble which helps to minimise the risk of them failing.”
Former Liverpool City Region LEP chairman Robert Hough explained about a New Markets programme with ERDF funding, developed through the Local Growth Hub.
He went on: “Working with local public and private sector partners, the Local Growth Hub provides a single access point for businesses to discover the advice and support they need to flourish by creating a joined up approach to business support, engaging with companies and connecting them with advisors across the Liverpool City Region.
“Regional brokers also deliver face to face advice to businesses, tailored to local needs and help align local support with national programmes.
“We often hear from businesses that the business support landscape is a real challenge to negotiate; the Local Growth Hub provides a support network to deliver long-term economic growth across our city region. It has been developed to serve one function – to help businesses grow.
“Also, a £400m Investment Fund is to be launched pan-Northern Powerhouse in autumn 2016 for smaller companies. We had the North West Fund investing £60m into the Liverpool City Region up to last year, so there have been opportunities there, and MSIF continues to invest in our businesses.”
Ena shaw, a St Helens-based curtain and soft furnishings manufacturer has an annual turnover of £19m and employs around 280 staff.
Director Stuart Taylor said business support has to be about more than just money.
“We found that the funding that’s available, and we’re not talking about borrowing a couple of million, is not really transformational.
“But we’re in a situation where we are scrambling to keep up with 280 people with minimum wage increases and all these other things that are hitting us at the moment. If we could get support for a personnel expert to come into the company for 18 months to help us through these projects and get everything moving, that would be transformational.
“If we are just getting 20% of their salary, it doesn’t feel as if it makes that major difference. It’s like we will have to do it ourselves and government says we’ll give you a bit of help if we can.
John Cater, vice chancellor of Edge Hill University, added: “I’m very interested in producing students at my university who are employable. One of the ways we do that is giving them that kind of experience through internships and so on.
“If there are mechanisms whereby the universities and further education providers can help, we have students in terms of their capacity to use technology and design of websites and apps for example, they could be a useful injection to help SMEs.”
This story is part of a 16-page special report on the Liverpool City Region.
To download the full report for free, click here
