East Anglia: Loans scheme backs growth

FAST-growing firms in the region are being encouraged to apply for loans of up to �200,000 to help them to expand further.

Suffolk companies with a credible growth strategy which need finance are being encouraged by Finance East to bid for a loan through the Regional Growth Loan Scheme (RGLS), which it manages.

The scheme is aimed at plugging the gap for established companies which have not managed to raise finance to implement their plans.

Finance East points out that raising finance can be particularly difficult for established companies whose balance sheets have been weakened by tough trading conditions and those which operate in sectors that are typically less appealing to business angels and venture capitalists, such as manufacturing or business services.

Anecdotal evidence indicates that banks tend to take a historic view of businesses, which precludes them funding a business without a healthy balance sheet, irrespective of its growth potential, it says.

The scheme, which hands out loans of between �50,000 and �200,000 to be repaid with interest at 5 to 9% above the base rate depending on the level of risk, is aimed at companies with turnover of �500,000 or more and growth forecasts of 20% to 50% per annum.

Finance East’s senior fund manager, Stuart Ager, said: “If a company’s past performance is less than resoundingly positive or they are experiencing cash flow problems, most funders will walk the other way. “However, when assessing companies for a Regional Growth Loan, we will scrutinise their growth strategy for the future rather than raking over the past. If we have confidence in the product, sector and team and the company has a robust plan for the future, we are likely to say ‘yes’ where others have said ‘no’.”

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Among the firms which have benefited from the scheme are Jacob Bailey (Ipswich), Omega Ingredients (Ipswich), Screens at Work (Haverhill) and Stokes Sauces (Rendlesham).