FW Capital ‘actively investing in established SMEs in the North
East’
With October’s Agents’ summary of business
conditions from the
Bank of England reporting that ‘fear of re-pricing or
withdrawal of existing facilities continued to discourage many
small businesses from approaching lenders altogether’, FW Capital’s
investment director, Peter Wright assesses the current
availability of business finance for small and
medium-sized businesses or SMEs and the outlook for 2012 - 13.
“Small and medium-sized businesses still have a tough job on
their hands securing finance and deals are taking a long time to
complete when they do. I see limited signs of encouragement
for 2012 -13,” comments Wright.
“Despite all the talk, what’s on offer from the
banks and through asset-based lending is
limited. Private equity and venture capital houses are
active, but selectively so in terms of the deals they’re
completing.
"The Business Growth Fund may prove to be a
useful addition at the larger corporate end of the market, but with
a turnover threshold of £10m, many smaller businesses may not find
it easy to get onto the BGF’s radar.”
“Business angels are moving away from
technology investments to more mainstream investments and
turnarounds. Many are also keen to be involved in syndicated deals,
but this is all about individual chemistry and cultural fit,”
Wright continues.
For Wright, despite their relatively limited ‘firepower’ and
sector restrictions, the regional public/private funds are one of
the few real sources of new term lending and equity investment
currently available for SMEs.
“FW Capital is actively investing the North East Growth
Plus Fund in established SMEs in the North East and we’re
keen to talk to even more. In fact, FW Capital’s parent company,
the Finance Wales Group invested over £40
million in 2010 -11. Times are tough, but we have capital
to invest. We also understand SMEs’ needs and can adopt a
flexible approach to structure investments that really suit their
plans.”
With a ‘bumpy ride’ and few encouraging signs in prospect for
2012 – 13, Wright doesn’t anticipate any imminent interest rate
rises.
“Business finance is still available from investors like FW
Capital for the right business plans. 2013 -14 will be much more
positive, so I’d urge businesses to hold on tight in 2012 – 13,” he
concludes.
FW Capital’s investment director, Peter Wright was speaking at
the recent senior finance dinner hosted by FW Capital and Hays in
Newcastle.