There didn’t have to be a Recession

If the Office for National Statistics had used a wider measure of growth to measure their statistics then there would not have been a recession.

The GDP was at its peak in 2008 and since such time has dropped by 4%, however employment figures are still as high as they were before the financial crisis.

A senior economist at Goldman Sachs has stated that there has been no double dip recession, although he will admit that UK growth has been slow over the last year.  However, Ernst & Young have been linked to saying that within the second half of the year the high street will be making a come-back.

If your business is going through a hard time financially with the recession hitting funds dramatically then speak to Beer & Young about investment options available for you.

Small Firms Are Essential For the Stability/ Rise in the Job Market

A  recent report produced by the Federation Of Small Businesses highlighted that small firms are essential in strengthening the economy and sorting out levels of unemployment. SME’s give jobs to aproximately 1.3 million disadvantaged and unemployed inividuals whereas large firms with more than 250 employess will only take on approximately £130,000.

Students, disabled people and those who have been sick long term are more likely to be offered work by a small business. 95% of this group that find a job in the private sector  will work for an SME or start up company. 88% of actively job seeking unemployed people will also find work in one of the aformentioned type of companies too.

However the market is still volatile, costs are rising and demand is falling so company finances for many are stretched to the limits. Beer & Young have many investors who understand the importance in SME’s and soley invest in them. Don’t wait until it’s too late call today. Here's a testomonial: http://www.beerandyoung.com/workplace-training-establishment/

Innovation and Skills in Business

There is a year on year rise of 4% in business lending nationally. More patents are registered by SME’s than by all the big companies combined. Many companies that think they need money in fact just require experienced members of staff and a high level of team work from like-minded individuals.

During The Olympics companies were pulling together and striving to achieve standards of excellence. This shows the importance of a positive attitude as well as sharing knowledge and mentoring.

Success in business is largely driven by having the right attitude. This is important at all levels of business. It is important to be passionate about what you do and realise that the more you put into it the more you can get out of it.

However, that being said sometimes it does all come down to not having enough working capital in the business and requiring a cash injection. If this is the case then Beer & Young are the people to speak to, being that they are market leaders in the field.

Rise In Alternative Finance

500 New UK companies have tapped the abl market between January and the end of March 2012. There are also currently 42,000 SME’s who regularly raise capital using this kind of funding. In the first quarter of 2012 lenders advanced £15.4bn against assets and invoices, a rise by 4% on the same period in 2011.

The rise in ABL could be due to the fact that banks are less likely to lend to companies than they have been in previous years. The Bank of England has dramatically dropped their amount of lending this year, with figures dropping £9.6bn in quarter 1 (the biggest quarterly drop since 2009) and £1bn in quarter 2.

Beer & Young know all of the lenders and can work with them in securing you the best deal possible. Why not check out Beer & Young’s awards and then make that all important phone call.

Reasons Why a Business May Fail

There are many reasons why a business project or a business in general might fail; this can either be one major factor or a culmination of a few.

Below are some examples:

• Not finding out why consumers aren’t buying from you

Perhaps your marketing message or call to action is not clear enough

Your website/ advert may not be easy to find

It may be unclear how to place an order with you

• Be aware of your corner of the market

Know who your customers are and what they want and need and stick to that

• You may not have received the right advice, or enough of it

You shouldn’t base company decisions on the first piece of advice you get, it could be a very blinkered view or one based solely on opinion and not fact, who’s to say they are even correct?

Try to obtain advice from a number of different sources.

• You may not know how to break down your ideas and goals into small and achievable targets

You must set daily, weekly and monthly goals and ensure you keep abreast of them

• Ensure you focus on one thing at a time

Don’t bite off more than you can chew

Prioritise and work systematically and try not to get too ahead of yourself, multi-tasking and taking on too many projects at once

If you are complying with all of the above and your business is still in a bad way financially then it may be time to talk to Beer & Young about the options available to you. Never wait until it is too late. Call Beer & Young today!

Businesses struggling to pay quarterly rent charges

The majority of companies must pay 3 months’ rent in advance for commercial properties.

Due to poor economic conditions and a rise in sales on the internet, more than 21,000 jobs have been lost on high streets since the beginning of the year. In terms of likelihood of company failures within the next annum the retail sector is looking at expected figures of 26%.

Some business owners are trying to agree new lease terms or arrange to pay monthly instead of quarterly; however this decision will be made by each landlord individually. Some businesses have to adapt their business just to survive.

If the current economic climate has hit your company hard, or you are struggling financially, speak to Beer & Young. They may be able to help you with funding in the form of a business angel.

Top Ten Reasons why your SME may be struggling with cash flow

Directors of SME’s all over the UK have recently been questioned for a survey to highlight the cause of the largest cash flow problems within their company.

Below is a list of the top ten:

·         Late customer payments

·         Overdrafts being frozen by banks

·         Unexpected tax bills

·         Requirement for new IT equipment and/ or machinery

·         Delayed insurance pay-outs

·         Slow decisions by banks for funding

·         Slow invoicing

·         Suppliers and/ or staff contracted bonuses

·         Redundancy costs

·         Legal bills

Many companies are unable to distinguish and address the threats before they turn into problems. Due to the state of the current economy, it is harder for businesses to come back from difficult financial times and more and more companies are struggling. Due to a lack of funds, many directors are focussing on just surviving, rather than looking at ways to grow the business.  If your company is struggling financially, contact Beer & Young to discuss the options available to you. Help may just be at hand!

Top 10 Tips for Investing

·         Invest in the sectors that you understand/ have experience in

·         Research the company and the company directors before investing

·         Determine what you want out of the deal, short and long term

·         Decide what you can bring to the table to support the business

·         Work out how much time you have available and what the company requires of you

·         Don’t invest just because the deal sounds good

·         Know from the beginning when to cut your losses

·         If it doesn’t feel right, don’t do it

·         Follow investors who make money

·         Build a network of quality investors who might share deals with you

If you are looking for a new investment opportunity contact Beer & Young to discuss signing up to our registered investors list to receive regular updates on the investment opportunities we have available.

Almost half of SME owners have thought about selling up in the last 5 years

A recent report shows that 46 present of small business owners have seriously considered selling up or downsizing their business within the last 5 years. It also states that when thinking about the future, more especially the forthcoming 5 years 21 percent revealed they are likely to either close the business down or sell their shares in their company and 26 percent say they are likely to exit. 47 percent of SME owners who used a loan to start up their business say that they would be unlikely to start the same business in the current market; this number lessens to 40 percent of business owners who started up their company without funding.

With the current climate being the way it is, times are hard for SME owners. If your company is struggling financially, contact Beer & Young for some free advice on private investment.

New Bank Launching Which Will Help Fund SME’s

A new bank has just been launch which will be targeting established SME’s and issuing them loans, secured against the company’s commercial property. It also has intentions of launching professional firm financing and competitive savings accounts.

This is a perfect time to launch, due to how difficult SME’s are finding it to secure finance. In the second half of 2011 alone, analysis show that banks rejected over 60,000 loan and overdraft applications from SME’s.

The average loan that will be available will be circa £50,000 to £1 million and will be available to businesses that typically have an annual turnover of less than £25 million including assets valued under the amount.

Currently the bank will be focussing on companies based in Cambridgeshire, Leicestershire and Northamptonshire, although they will have a national broker coverage model.

This is a very exciting prospect for SME’s, however if you are not fortunate enough to be able to secure some of the new bank funding, then, as an alternative contact Beer & Young. Beer & Young have a large network of private investors that may be able to help you!

Financial Hardship Caused By Salary Cuts and Mounting Debt

Loss of income is still the main catalyst for individuals becoming in debt, this includes loss of a job, a pay cut or hours being reduced. This is followed by the spiral of debt and then bad financial management. It has become apparent that when an individual goes into debt it is difficult for them to find a way out.

This can then impede on their health and can lead to anxiety and worrying, health problems and even divorce and separation.

Many SME’s are struggling financially, with many new businesses ceasing to exist. Finding funding can be very difficult in recent climate, with bank loans being hard to source. That is where Beer & Young come in. We have a large network of investors who are actively looking to invest equity into businesses such as yours. Call today and find out how Beer & Young can help you and you may find that your business can turn around and that you can save the jobs of all your staff.

Soaring loses for travel operator Thomas Cook

Thomas Cook has experienced a very challenging 6 months in which the company reported a pre-tax loss of £712.9 million, a rise of £384.6 million on the same period of the previous year.

In order to rectify this and have any hope of rebuilding profitability, the company has secured shareholder approval for the sale and leaseback of its aircraft fleet and also its Spanish hotel arm as well as agreeing to sell its Indian business for £94 million.

A refinancing package has also been organised earlier this month with its lenders until 2015.

If you are an SME looking for finance and don’t have the financial means available to you that a larger company like Thomas Cook has, then speak to Beer & Young about private investment.

Pay Day Loans

Pay day loans, although being a solution to short term debt problems are clearly a quick fix and can do more harm than good in the long run. With these loans interest rates incurred can be very high and if not managed correctly can make the situation worse long term, with many taking out further loans to cover the initial loan.  This can spiral out of control and you can find yourself in worse debt then when you started.

If a pay day loan seems like too big a risk for you or the bank won’t give your company finance then contact Beer & young for a chat about private investment, how it works and how it could work for you.

Small businesses are the way forward

We have recently been informed that we are in a double dip recession. If we would like this to change then we need to find a solution and a way out of the slump the economy has been in for the last few years.

The governments priority is about reducing debt, so can’t afford to invest in public infrastructure, thus growth is stagnant. The same worry about debt has had an impact on consumer spending. 

Outside of the public sector, 97% of all UK workers are employed by small businesses; however, they are currently being very cautious, not taking risks or moving forward with growth and development. We therefore require these companies to keep people in jobs and boost the economy

Part of the worry for small businesses is funding. Banks are not as prepared to lend as they used to be. You have always needed to be in a very strong position to get a bank interested and now this has become even more difficult.

If your company is struggling financially and could do with a cash injection, call Beer & Young today and discuss business angel investments.

Approximately 3,000 jobs lost as Clinton Cards goes into administration

Having been in business since 1968 and trading as the largest UK retailer across its two retail brands, (Clinton Cards and Birthdays) it has come as a huge blow for almost 3000 employees to lose their jobs as the company goes into administration. The group has suffered due to bad trading conditions causing significant cash flow problems.

Half of Clinton Cards retail estate will close, taking the number of stores from 784 to 350 Nationwide. The closures include 200 Clinton Card stores with the remainder being all of the Birthdays stores.

With Moonpig doing so well it may be fair to say that Clintons and Birthdays need to reconnect with the great British card buying public.

The key to business survival, particularly when running a small business is to stay in control and to talk to a professional within the industry. Call Beer and Young today for a free, no obligation chat.

Beer & Young MD Visits 10 Downing Street for the Second Time This Year

For the second time this year Beer & Young managing Director, Nick Young will be attending a breakfast meeting at 10 Downing Street to discuss the role and expansion of business angels.

The topics due to be covered in the meeting are attracting potential angels, how existing angels can act as figureheads to encourage others to consider angel investing, which groups should be involved and which focus to take. Other material covered will be the Business Angel Co-Investment Fund, the Enterprise Investment Scheme and Venture Capital Trusts, the Seed Enterprise Investment Scheme, the Business Coaching for Growth Campaign and the Get Mentoring Initiative.

Nick is a key player within the industry and has many years’ experience and a vast knowledge in the field. If you are considering the Business Angel route for your business then call Beer & Young today.

SME Bank Lending Crisis

Banks are the main finance source for SME’s in the UK. Recent reports show negative growth for SME’s which has not been helped by banks not lending so freely, thus making it harder to acquire traditional sources of working capital.

It appears that banks were over £1 billion short of the agreed target to lend to SME’s when the government scheme was launched over a year ago.

Due to the global framework governing the regulation of bank capital in the current financial crisis also known as Basel III, which encourages and promotes banks to lend to fewer high risk businesses and instead hold onto the capital. SME’s are considered high risk ventures which will ultimately hinder their growth and expansion.

If your business in struggling financially and can’t get backing from your bank, why not talk to Beer & Young. Beer & Young offer free, no obligation advice as well as having the largest network of active business angels in the UK. Call today- help could be at hand.

Rising Business Failures

Recent figures show that over 5000 businesses have gone bust so far this year. There has been a 4.3% rise on liquidations during the first quarter of 2012 on the same period in 2011.4,303 liquidations have occurred during the time period.

There has also been a 1.8% rise on the period Q1 2011 to Q1 2012. 1,290 other forms of insolvencies have also taken place. These include administrations, receiverships and CVA’s.

It is believed by professionals in the industry that the situation will get worse before it gets better, with many more businesses failing in 2012.

Many companies are only currently surviving due to creditors propping them up. An increase of pressure from creditors could push companies over the edge and bring to light the number of companies that are truly struggling with debt.

Don’t let your company fail. Contact Beer & Young to discuss business angel investment and see if you can save your business!

More than 1860 businesses failed a month in Q1 of 2012

Figures released this week show that over 60 businesses a day went bust in the first quarter of this year, the highest number recorded since 2009. There was a 5% rise from the same quarter of 2011. Failures in the business services sector contributed to 25% of the total company insolvencies.

The biggest sufferers were reported as design agencies, PR agencies, IT consultancies and equipment and manufacturer suppliers with hospitality, tourism and construction not far behind. The construction sector made up for 10% of al insolvencies and the property services sector for 7%.

If your business is having financial difficulties, don’t wait until you are insolvent before dealing with the problem… call Beer & Young today!

Britain’s double- dip recession?

Wednesday 25^th April’s shock revelation showed that Britain is experiencing its first double- dip recession since 1975.

A recession is defined as two consecutive quarters of contraction (negative growth). The economy shrank by 0.3% in the fourth quarter of 2011.

The industrial and construction output are responsible for the most recent decline as the sector barely grew.

There is now a worry that this data will dent already lacking confidence and push the recovery back, with a likelihood that the economy could weaken further.

The shock revelation piles further pressure on the government to increase their efforts to boost the economy and overcome challenges to ease Britain’s debt.

However, these figures are only preliminary and are only based on about 40% of available information, which will be reviewed to reach further statistics in the near future.

If your business is suffering due to the state of the economy and lack of consumer confidence then call Beer & Young today for some free advice on ways to save your company!

Majority of company owners are not aware of the capital, sales and revenue in the business

The majority of business owners are able to write a business plan and put together credible financial forecasts either alone or with the help of an accountant. However most struggle to systematically report progress and analyse what is going on within their company. Figures show that only about 10% are able to do this without financial assistance. So it is no surprise that there is a correlation between this and the number of businesses that survive over three years of trading also being at 10%.

Business failure rates are also high as most company owners can’t spot warning signs, let alone deal with them. You need to ensure that you are realistic about the company’s performance, rather than being overly optimistic and blinkered when it comes to evaluation.

Systematically monitored financial progress and analysis of results is the key, however only the minority of business owners have this under control. It is essential to be aware of the company’s costs, sales and revenue both current and future and work out how much capital the business will require going forward.

If this is something that you have done and have figured out that your company will require some additional funding, contact Beer & Young for a free no obligation chat to discuss potential investment.

R3 defend themselves against BPF’s criticism of pre-packs

The British Property Federation (BPF) have claimed that the insolvency system is underhand when it comes to the retail sector and have released a statement saying that pre-pack administrations are a means of reinforcing failure. Securing the best results for the creditors is meant to be the main role of the IP, however they are becoming concerned that their biggest concern is becoming the interests of the buyers.

However a representative of R3 (the biggest insolvency body) have expelled the assertions regarding underhand dealings and accusations that the insolvency system is unfair.

A pre-pack is in place to allow a potential sale once other options have been exhausted. It is in everyone’s best interest as it maintains some value in the ailing business.

A purchaser is given a license to occupy a company’s premises by an administrator in a pre-pack. This would provide the landlord with a temporary tenant, allowing the landlord the opportunity to negotiate terms of a tenancy with a new tenant whilst still being paid rent.

For a turnaround investment specialist like Beer & Young it is always interesting to hear the views of trade bodies regarding the state of the economy. Contact us if you would like some real help.

Business Failure Rates Set To Rise in the Next 2 Years By 10%

In 2011 approx 23,600 businesses collapsed. This number is expected to rise in 2012 to 25,600 and increase again in 2013 to 26,800. The pessimistic forecast has been blamed on low levels of consumer consumption fuelled rising unemployment and lower earnings.

The three sectors likely to fail most in 2012 are construction and real estate, businesses services and retail and wholesale. The sectors looking set to enjoy positive growth are manufacturing, media, technology and telecoms. This goes to show that companies that are developing innovative products are more likely to succeed, whereas businesses that do not respond to new “norms” are at greater risk of struggling.

However, by 2013 there will be a decline in the rates of failure, with figures falling to 23,700 by 2015.

If 2013 seems like an eternity away and you require financial help now, contact Beer & Young to discuss business angel investment for your company. Don’t let your business be on the list of ones that fail!

Beer & Young- Only Intermediary Amongst 9 Specialist Turnaround Funds

Beer & Young (B&Y) were invited to speak at a major regional event and out of 10 speakers were the only intermediary amongst nine specialist turnaround funds.

Within the industry, the minimum deal size for most investment companies is £2 million whereas Beer & Young’s maximum deal size is £3 million, putting B&Y in a unique position in the sector. B&Y have a distinct focus on the SME sector, particularly those SME’s that require turnaround funding that can’t find funding through traditional sources for example banks and ABL and would value the input of an investor with prior experience.

B&Y have in excess of £1,000 high net worth investors the majority of who on an individual basis want to become involved with the business. Fund investors are driven by the rational objective assessment of the financial outcome and risk, whether the existing management are efficient or need changing and to work to a substantial exit multiple, whereas the angel investor is typified by B&Y’s type of turnover, individuals, fast decision makers with an affinity to the business and a deep desire to use their hands on skills to protect and grow their investment. 

Beer & Young are the only company in the market who combine angel investors with smaller than average investment amounts and only in the SME sector, which makes them very niche.

Consequently at the end of the meeting a large amount of visitors to their syndicate room wanted to talk to them and they fully expect to engage in dialogue and commitments with a number of individuals and firms on all levels on an on-going basis.

If you require angel investment contact Beer & Young today on 0207 329 6886.

SME’s have a higher than average debt

It has appeared in recent research that small business owners are more in debt than the average person. It was revealed that the average personal debt of a small business owner is circa £30,500 compared to the Consumer Credit Counselling Service clients who have approximately £20,000 of debt.

Small business owners also have an average of 10-20% higher level of arrears in council tax and utility bills compared to the norm.

The majority of small business debt is held in personal loans and short term credit cards.

If your business is in financial trouble and you could benefit from a cash injection speak to Beer & Young, they may be the answer to your problems.

Rent owed during administration must still be paid by the company

The high court have recently ruled that rent which falls due before a company goers into administration must still be paid and will not be classed as an administration expense. It was ruled that is should rank equally alongside the other unsecured creditors’ claims, even if the property is used by the administrators during the rent period. It was ruled that if rent falls due during an administration the administrator would have to pay the entire quarter’s rent even if the property was vacated after a few days.

Going into administration is bad enough without the aforementioned added worry. Don’t let things get that bad for your company, contact Beer & Young early on to discuss the options available to you, including investment from one of our business angels.

Bosses re-mortgaging homes and taking pay cuts to avoid making staff redundant

Research has shown that small businesses are going to great lengths to protect the jobs of their employees during these hard economic times. One in ten small business owners have even gone as far as to re-mortgage their own home to free up money to pay wages rather than making their staff redundant.

35 per cent of business owners have admitted to taking significant wage decreases in the last 5 years to avoid laying off staff and not just as a short term measure. 60 per cent of them have taken a salary cut for over a year with 17 per cent saying it could continue indefinitely. 70 per cent have cut them by as much as a half, while one in 20 have admitted to scrapping their salaries completely.

Don’t wait for things to get worse, contact Beer & Young today to talk about investment.

Crowdfunding

One of our online colleagues based in the states hosted this discussion which we find fascinating. Most of the comment relates to funding in the US however, the content is relevant to the UK market. One could argue this is just someone’s opinion but Beer & Young’s MD, Nick Young, sees a lot of similarities in terms of the anticipated future of UK crowd funding.

For established trading businesses the crowd funding model is unlikely to work very often and it is best to talk to experienced advisors (for example Beer & Young) if your business needs urgent capital.

I've posted many Discussions on several Groups and my comments have morphed into an "almost" White Paper on the status of private investors shifting to from Wall Street and start-ups to SMEs. I hope you find it informative and by all means please add your opinion to the discussion and by all means agree or disagree with my findings.

Crowdfunding was and still is illegal in the US, but CrowdFinancing has always been legal, just unknown.

I've spent 5 years researching the subject of financing and funding private-sector businesses and it's never been so bad. I've been on both sides of all sorts of deals in 40 years, but Crowdfunding does not attack the #1 problem which is entrepreneurs/CEOs trying raise funds being woefully ill-prepared. Investors talk about this all the time behind closed doors, but it's never disclosed. Would it help if they explained it? Probably not.

I had a long call last week with someone who was a serious angel investor in an earlier life that now mentors start-ups, he commented that 90% of the college-grad entrepreneurs that he sees can't be "coached"! They are either so in love with their idea that they refuse to consider that the investor is taking any risk, or lack the experience to know what they don't know. Crowdfunding makes this situation far worse resulting of a new business being successful highly unlikely.

A really interesting comment I overheard regarded the inability to acquire follow-on funding with the stock owned by a "naive crowd". It's bad enough when it's friends and family money.

Most savvy investors right now won't invest in any business unless there's revenue and that's pushing them towards existing small to mid-caps doing deals banks can't or won't do that produce a collateralized, verses equity, 10-25% ROI. Before an irate angel investor climbs on me, less than 1% of accredited investor are angels according to published data. Think about that, 99% of private investor don't invest in the private sector, at least as angels. I can't find on the 99%, but I know it's huge compared to start-ups.

I see 100 start-ups a day and I tell them a select few they can try raising money, but most to use their own money to buy a business, use private investor money to bridge the sale, use private money to grow the business, then if your start-up idea still looks good then go for it using only your money. You'd be amazed how "coachable" they become when they have skin in the game.

SME’s are missing out on Government growth initiatives

Only approximately 5 percent of SME’s are taking advantage of government support available. These schemes were established to help to improve environmental performance and ultimately save money. Entrepreneurial or research and development tax relief and capital allowances are among some of the incentive opportunities not being taken advantage of. Only 34 percent of UK SME’s are even aware of the schemes existence let alone how to access them.

Turn to Beer & Young for some free advice on what help is available for business owners.

NLGS Scheme not designed to help small businesses

It has been claimed by the British Chambers of Commerce that small firms, as well as younger and high-growth firms (who already have trouble getting credit) may not be supported by the National Loan Guarantee Scheme (NLGS). The NLGS is a scheme designed to help businesses acquire cheaper bank loans. It appears that the help will be more forthcoming to medium sized firms.

Although many of the major banks have signed up to the scheme, HSBC has not as they believe it to not be commercially viable.

If you are a small business in need of help contact Beer & Young. They have a large network of  business angels looking for the right investments.

Hard Times Ahead

The number of company failures in the England and Wales increased by 4.5% from 20,901 in 2010 to 21,843 in 2011. In the South East, South West and London 1 in 70 businesses became insolvent .

Despite interest rates remaining low the economy is still expected to worsen over the forthcoming year. There will be a rise in fuel food and travel; however wages are expected to remain stagnant.

Formal company insolvencies are predicted to rise in 2012 due to the higher levels of distress. The lack of creditor and supplier leniency will play a part in this, as when consumer confidence falters companies who rely on consumer spending will suffer when they start to tighten their wallets.

If your company gets hit hard and is struggling financially then contact Beer & Young for some advice on the best way to move forward.

Improvements to EIS Scheme

The Seed Enterprise Investment Scheme was confirmed by the chancellor in the recent budget. This enables investors to inject up to £100,000 per year in qualifying seed businesses.

The EIS scheme (a tax break for people who invest in qualifying companies, releasing their income tax liability by 30% of the amount invested) has also increased to £1 million, with the qualifying companies extended to £5 million per annum.

With these new incentives put in place it gives greater flexibility to make investments in clients businesses. Please contact Beer & Young for more information.

Will tomorrow’s budget help financially struggling SME’s

In the budget tomorrow there is expected to be a 30 percent tax relief on £500,000 within the enterprise investment’s scheme, with an increase to £1 million from 6^th April.

Companies are also entitled to write off the cost of acquiring qualifying assets (up to an annual limit of £100,000) against their taxable profits, including commercial vehicles, computers and other equipment.

This is excellent news for investors and business owners; as if the investors are receiving a higher tax relief then they will be more inclined to invest. Please call Beer & Young today to discuss your investment requirements.

Will this scheme be a success

The government have launched a national loan scheme, whereby small businesses will have billions of pounds of state backed loans available to them.

The aim is to create a lending scheme that will unclog the flow of credit to businesses. The scheme has been unveiled today by the Treasury and has been backed by 4 of the biggest banks, Barclays, Royal Bank of Scotland, Lloyds and Santander. The national loan guarantee scheme (NLGS) will see up to £20 billion of guarantees on unsecured borrowing from the banks aforementioned.

The entire benefit that the banks receive from the guarantees will be passed on to the businesses with a turnover of less than £50 million through cheaper loans.

There will be a discount of 1% for SME’s that take out NLGS, compared to the interest rate that would have been offered outside of the scheme. Factors including market share, gross and net lending track record of lending to small businesses and capacity to lend under the scheme will affect the Treasury’s decision on the allocation of guarantees that each participating bank will receive.

Will this new announcement have a real impact on the funding of SME’s or will it be damp squid like the enterprise finance guarantee scheme which has failed to deliver the much needed capital to business owners.

Beer & Young have continued to raise capital from investors where banks are unable to lend money.

Care home operator in Yorkshire collapses

A care home operator in Yorkshire (which runs 6 care homes) has suffered cash flow difficulties and has recently gone into administration after 9 years of trading.

This has thrown into doubt the future of 80 pensioners as well as having the potential to make 80 members of staff unemployed. Five of the workforce have already been made redundant.

This company will not be the last; many nursing homes are going bust or are coming under threat, particularly as banks look to reduce exposure to the sector.

However, there is no need to panic as investors are still active within the sector. Beer & Young are here to help and presently have one group already working through investment terms

The number of SME’s seeking loans has decreased

In the final quarter of last year 17% of all those who applied for overdrafts were rejected and 33% of those applying for loans got turned down. The number of smaller enterprises looking for finance has dropped, with most of them being classified as “happy non seekers”.  The figure of “happy non seekers” has risen from 68% last year to 78% this year.

It appears that the general public are so convinced that the banks won’t lend money that they have given up even trying to find out. However if your business is in trouble and does require investor funding, Beer & Young can help.

UK economy- worse than we thought

It has been reported that travel companies have a record low cash reserve. Due to a 49% increase between the third quarters in 2010 to 2011 in companies facing critical distress, it is inevitable that there will be further insolvencies in the near future. This rise of the levels of critical distress also stretches to other sectors, including the construction sector which has seen an increase of 41%, 63% in the property sector and 92% in the support services sector.

The British Retail Consortium have released data showing a decline in online spending in the third quarter of last year compared with 2010. Growth in online spending has slowed by 10%, a direct result of bargain hunting.

If your business is struggling financially and needs a cash injection contact Beer & Young. They have an unrivalled network of active private investors looking for the opportunity to help.

Royal Bank of Scotland increase the staff in their recovery department

The Royal Bank of Scotland has had its fourth consecutive pre-tax loss since being bailed out by the tax payer in 2008. The loss for the year comes to a total of £2 billion, an increase of £900 million on last year.

Within the last year loan defaults on all sectors within the group’s core business has increased by
£1.4 billion. Loans and advances classified as core were down year on year (excluding 3 sectors). Net loans made have decreased in the last year by £18.5 billion.

There has been a year on year increase of 800 staff in their Integration and Restructuring division. December of 2010 saw 300 team employees whereas in December 2011 the number was up to 1100.

Senior associate of Beer & Young comments: The fact that RBS have had to increase their recovery staff so significantly shows how many more clients must be at risk. If your company is struggling from financial difficulties please give Beer & Young a call today

Turnaround Investment Funding

The ongoing economic uncertainty is not aiding in inspiring investor confidence in most areas. The industry figures reaffirm this by showing a decline in turnaround private equity investments between 2007 and 2011. It would therefore be fair to say that companies in the current climate would assume that turnaround investing is not something that private equity is interested in.

However, over the past 2 years things are changing. Banks have accumulated large portfolios of assets resulting in them seeking funding partners to help them exit positions in assets. Funding has also taken a more alternative path, with the individuals investing directly into the business, rather than following regulated fund structures.

Although many companies have closed between 2010 and present day, Beer & Young are still a thriving business. With the UK’s unrivalled number of active turnaround investors, where better to turn if your business is in trouble? Beer & Young are testament to the fact that there is still a market for turnaround funding.

SME Growth Encouraged by Chancellor

The Chancellor has made plans to help with funding issues and stimulate growth in the SME community. They will be given the opportunity to focus on running their businesses, rather than facing the hurdles of the red tape surrounding issues like planning laws, employment laws and health and safety, which will all be relaxed.

The pressure will also be reduced, as plans to put in place auto-enrolment pensions have been postponed as well as extending the business rates holiday by 6 months.

The opportunity for SME’s to attract cash investments to assist with their growth has increased, due to the relaxation of the rules governing the main Enterprise Investment Scheme.

Our initial reaction to this is that it sounds all very interesting and positive but the proof as ever is in the delivery rather than the sound bites. Beer & Young have a 14 year track record of delivering what business owners really need, which is new money.

Beer & Young came to the rescue at the 11th hour

Nick Young, managing director of Beer & Young is featured in an article in the ICAEW magazine (Institute of Chartered Accountants) this month.

The article was centred on the world of turnaround and funding. Its lead feature was a case study where Beer & Young successfully raised 2.5million.

The company had exhausted its funds and the bank was unable to provide the funding it required. At this point Beer and Young stepped up, introducing 7 qualified investors, from which 2 firm offers were materialised and one was accepted.

This saved the jobs of all the employees and prevented the company from having to close its doors 2 months later as predicted would have been the case without the help of Beer & Young.

Keep your business in existence… contact Beer and Young today!