Last week, I read with interest some new research from the Institute of Directors' start-up network (the IoD99) which revealed that UK entrepreneurs are feeling confident about growing and developing their businesses in 2018, despite challenges posed by Brexit and new regulatory requirements.
While uncertainty around our trading status with the EU topped the list of perceived challenges to growth, access to finance was identified as the second biggest hindrance. This isn't that surprising – we know that access to finance is a challenge faced by many businesses, which is what led us to start OakNorth in the first place. However, what did catch my eye was the fact that when provided with a list of government-backed schemes designed specifically to help SMEs get more access to finance – the Enterprise Investment Scheme, Start-Up Loans and the
British Business Bank's 'Help to Grow' loan programme – none of them were recognised by more than half of those surveyed. In fact, knowledge of the British Business Bank stood at just 17%, which is painfully low when I think about the important work they're doing to support UK businesses.
The British Business Bank's Help to Grow programme launched in May 2016 with the aim of plugging the £1bn gap in scale-up lending by providing debt finance of up to £2m to fast-growth businesses. The finance is available to businesses across all sectors, but is particularly focused on those that have strong growth ambitions or invest heavily in research and development – such as manufacturing, creative industries and the technology sector.
We joined the programme in January, recognising that it was a perfect fit for us given that we focus on lending to fast-growth businesses and provide debt finance of £500,000-£25m. We joined the scheme in January this year and closed the first deal under it two months later – a £600,000 loan to Notes, the London coffee chain and wine bar concept.
Launched in 2010, the business has managed to set itself apart from other coffee chains in the capital through its unique dual concept of being a café by day and wine bar by night. At the time, the business had six sites: Trafalgar Square, Moorgate, Kings Cross, Canary Wharf underground station, Canary Wharf Crossrail station and the Gherkin. It used the loan from us to open two new locations: one in Angel Court and one in Nova – the new commercial development in Victoria – and has since opened an additional site in Bond Street Station.
It also has its own roastery, which supplies over one tonne of coffee per month to independent coffee shops around the UK and Europe.
It is a brilliant example of a fast-growing and ambitious business that is coming up with new and innovative ways to stand-out in an increasingly competitive sector.
However, it is also a business that had it not been for the programme, may not have been able to secure the debt finance it needs to grow. This is why it is essential that more is done to raise awareness of these government-backed programmes and help scale-ups realise their growth potential.
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