Capital Investment Introduction

Turnaround Finance should always be about new money. Beer & Young's core activity is the provision of new money, normally from private investors.

Most of our clients are owners of existing businesses who are experiencing serious cash pressures. The general pattern goes something like this:

• The business has traded well in the past.
• Events - too numerous to mention here - have resulted in poor cashflow.
• The overdraft sits at its limit for most of the time. The bank is unlikely to offer more funding at this point as they see their risk increase. The directors may be (& wisely one could argue) reluctant to offer more security to the bank.
• The company's balance sheet may be fully geared or the directors may not wish to over borrow against assets.
• There may be creditor pressure or just a need for more working capital to operate through a poor trading period. Or the problems may be more serious with solvency issues to address.

In any of these cases, an injection of capital can be the answer.

Business Angels- Otherwise known as "private investors", Business Angels often have the ability to invest capital at short notice where they believe there is a future for the business.

Venture Capital- These are managed funds with institutional backing. They will normally only consider projects in excess of 1 million (and usually 3 million) and only a handful will consider capital investment for recovery situations.

Company Investment Capital- Many companies in the SME sector are active in making capital investments. They will not necessarily be competitors, however it is likely that they operate in similar fields. Typical amount of investment is 100,000 to 1 million.