New fund is the catalyst Tees Valley firms need to win new contracts
With more and more companies insisting on performance and
warranty bonds when awarding contracts, the launch of the Tees
Valley Catalyst Fund at the end of June 2013 has been welcomed by
many Tees Valley businesses. The bonds, which can be a drain on a
supplier’s cash reserves, provide a financial guarantee that the
supplier will deliver on time and to an agreed specification.
Open to businesses in Darlington, Hartlepool, Middlesbrough,
Redcar and Cleveland and Stockton-on-Tees, the £10 million Catalyst
Fund can now provide short-term finance of between £100,000 and £2
million to fund the cash security often required for these
Tees Valley Unlimited, the Local Enterprise Partnership for Tees
Valley highlighted the need for the innovative fund in the region
and secured the capital from the Regional Growth Fund.
Managed by FW Capital, the leading UK SME investor, the Catalyst
Fund is the first of its kind anywhere in the UK and uniquely
available to Tees Valley businesses.
“The Tees Valley Catalyst Fund is an innovative fund focused on
providing ambitious local businesses with the backing they need to
win new contracts,” explained Joanne Pratt, FW Capital’s Fund
Manager in the North East. “Many established Tees Valley
businesses have the capacity and technical know-how to beat the
competition and win new contracts. Indeed, they’re often
shortlisted at tender stage, but lack the cash reserves to set up
any bond facilities required. We hope that the Catalyst Fund’s
backing will enable them to overcome this obstacle.”
Funding is often only required for a relatively short period
(typically 12 – 24 months) and FW Capital can adopt a flexible
approach that recognises businesses’ individual requirements.
Companies can also access the Catalyst Fund to extend existing
facilities, giving them the confidence to bid for further contracts
they may have struggled to fund.
Since launch, FW Capital has opened its Billingham office and
Pratt has recruited investment executives, Nicky Atkinson and Chris
Johnson to make investments from the fund.
“The Catalyst Fund has encouraged a lot of interest from local
businesses and our Tees Valley team is already working on an
interesting pipeline of proposals,” Pratt explained. “The Tees
Valley has a concentration of businesses supplying the energy
sector, for instance, particularly in the oil and gas and
renewables sectors. Many of them have opportunities to expand
in their domestic markets with the fund’s backing. I hope
they’ll also be looking to consider potential export opportunities
and continue to build the region’s reputation as a strong performer
when it comes to exports.”
The Catalyst Fund can back businesses in a wide range of sectors
to bid for new contracts. They must be investment-ready,
revenue-earning and have a clear business plan demonstrating a
strong case for investment.
Overall, the Catalyst Fund is aiming high – it hopes to
strengthen the local economy by helping the region’s businesses win
additional contacts valued at £700 million and to support around
1,440 jobs in Tees Valley over the next ten years. Added to
this, it’s set up to be an ‘evergreen’ fund with interest and
repayments ploughed back into future lending.
Pratt believes that the Catalyst Fund has the potential to boost
the confidence of businesses in the region and also transform their
“The Tees Valley Catalyst Fund has been created specifically for
ambitious Tees Valley businesses. It can make a significant
contribution to both their future prosperity as well as to the
region as a whole. Ultimately, I hope its impact will be much
greater than £700 million,” she concludes.
Businesses wishing to apply for funding should contact Chris
Johnson on 01642 343 495 or visit The
Tees Valley Catalyst Fund