18/11/2013

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 bonds.

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 prospects.

“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