Access to Finance: Advisers key to funding deal success

THE use of good advisers will pay dividends for businesses when hammering out a funding deal as it should maximise the chance of success and help signpost companies to the right finance stream.

That is the message delivered in our major Access to Finance supplement sponsored by Reward Capital and Finance Yorkshire.

Click here to read the free 18-page guide.

Mark Clephan, director in EY’s corporate finance team in Yorkshire and Humber, says that the first hurdle is finding the right funding deal that is a good fit.

“While advisers can be critical in helping a business to define its proposition and tell the right story to funders or investors, the first hurdle – identifying the right financing type and model – is often the most important.

“Whether it is venture capital, government backed grants, private equity, bank debt, asset-based lending or any other type of debt, advisers can work with the management team to help build a case to potential backers.”

Clephan says that, importantly, advisers are out in the market, speaking regularly to funders and investors, so they know the financiers who are the best fit for a business.

“When the right potential funders are found, it helps to have an experienced adviser in your corner to deliver the most competitive terms and the right structure. “

Keith Williams, the regional manager for UK Steel enterprise, says that before the banking crisis, a lot of referrals for funding would come from accountants with good corporate finance experience, with a full pack of information, providing a full advisory service.

However, through the recession, a lot of companies took the view that they didn’t want to pay for the service of professionals.

“We still get referrals from accountants but in the main, these are just signposting, rather than a company paying for a professional to put together a package of funding and advice. People just don’t want to pay the costs,” Williams says.

“A lot of the smaller firms don’t have the experience of dealing with this kind of transaction and therefore aren’t able to provide the right type of advice and that’s an issue for small businesses.”

David Belford, business angel and chairman of Sheffield-based Konnectiv Technology, adds: “If you’re worried about the cost of taking legal advice, think about the cost of not taking it.

“Professional advice on a deal is so important and it is important that the two sides are in line with each other.”