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Yorkshire SMEs receive new fund

November 24, 2010 Leave a comment Go to comments

A new multimillion-pound investment fund has been launched to help small and medium-sized businesses (SMEs) in Sheffield. The fund, offered by Reward Capital, is targeting Yorkshire for its first deals.

Small Enterprise in Sheffield is refurbishing its building

Small Enterprise in Sheffield is refurbishing its building

The amount of the funding is from £50,000 to £2 million. The asset backed and equity based funding will help SMEs that cannot get backing from their existing funders.

Reward Capital is led by Andrew Ward and Tim Vaughan. Mr. Ward, a former regional director at Credit Agricole Commercial Finance, said Reward Capital initially has ‘several million’ at its disposal as it looks to support short-term assets of the region’s SMEs.

He said: “Businesses may be experiencing considerable financial pressure and managements are being asked to offer further security by way of equity or personal guarantees. We can relieve this pressure and provide a solution which will underpin the success of a business going forward, securing jobs and adding value.”

Focusing on short term agreements, Reward Capital is expecting to complete six to 10 deals in its first year of the investment.

Mr. Ward also said: “What we do have is a committed funding line from a very wealthy backer, if we can demonstrate that we can make this business work over the first six to 12 months then those ‘several millions’ can turn into much larger lines of potentially tens of millions.”

High Street banks have been criticised

During this year, High Street banks have been criticised for failing to lend money to small businesses. Mr. Nezille Martin from the Federation of Small Businesses said: “It has been almost impossible for small businesses to borrow from the High Street Banks… Many businesses have been forced to close as the result of the lack of finance.”

Mr. Martin also said all sorts of input from available sources to help small businesses are welcomed. The fund from Reward Capital gave an alternative channel from being to the traditional banks that certainly hadn’t played along for the last 12 months.

He said: “The fund from Reward Capital will certainly ease the situation. Perhaps some of the banks will adopt more conciliatory policies towards small businesses and get them landing again.”

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