Business angels play an increasingly important role in financing small businesses and offering struggling companies their skills and expertise to aid in future growth and development. The Government have recognised the potential in the industry and as such have made it a priority to stimulate an active and supportive market for angel investment.

The purpose of the meeting was to discuss the Government’s commitment to supporting Business Angels through helping to raise awareness as well as finding out what more can be done to promote and improve the conditions for SME’s to flourish.

The Prime Minister opened with a ten minute speech; this was followed by a number of successful investors and entrepreneurs who were invited to tell their experiences of Business Angel Funding. Other key speakers included The Rt Hon David Willets (MP) and Lord Young of Graffham.

This was then followed by an open panel session where the relationship between early stage Business Angel funding, the tax regime surrounding the market and governments plans to further encourage the UK Business Angel market were discussed. We were also given the opportunity to share views affecting the Angel sector.

Other attendees include Peter Jones and Doug Richards from Dragon’s Den.

Nick comments that not only was it a fascinating experience to see the workings of Number 10, but it also offered an up to date insight into how our government intend to promote and develop the Business Angel market in the coming years.

Beer & Young specialise in raising capital urgently for SME’s requiring our help. We have an unrivaled network of private investors looking to invest funds, taking the stress off you and enabling your company to focus on the more important things like growth and future profits.

Our client’s business has a history that extends to over 100 years with its origins in ironmongery and latterly as a retailer to the local agricultural community. It now specialises in sales of the leading brands of cookers and stoves, and a full range of horticultural equipment.

Turnover has been steady at around £1.8 million for several years, but increased costs & other internal factors have resulted in losses in the last two years. Cashflow and creditor pressures have built up, particularly with HMRC.

Beer & Young were introduced to locate urgent funding and look to negotiate terms with the Crown over their historic debt. We moved into action and swiftly generated a good level of interest. One investor stood out amongst the rest, met with our client and offered terms almost straight away. A loan by the investor was put in place to provide urgent working capital to be followed by a longer term investment to allow the company to re-build its former position as a solid profitable business.

Our client is delighted with this outcome; without which he would have had to shut the doors of the business for good.

Our client can now look forward with renewed optimism and is already seeing signs of recovery in his order book.

We wish both client and investor well for the future.

With well over a decade of experience in a range of insolvency, recovery and turnaround work, Nick also accepted the “Business Rescue Funder of the Year” award for the second year running at the Insolvency & Rescue Awards held in October.

The Insolvency & Rescue Awards is the biggest annual event in the turnaround industry. 550 people attended the gala, hosted at London’s Lancaster Hotel. Entertainment was provided by comedian Stephen K Amos who enlivened proceedings with a great set prior to the winners’ announcements.

Nick Young commented; “Winning the key Business Rescue Funder award two years on the bounce is great news and testament to the quality of the entire team at Beer & Young.  I am grateful for their efforts and look forward to continuing this excellent work through 2012.”

Whilst equity funding is our core business the recent example below demonstrates that the most appropriate funding solution isn’t always equity/investment. We deliver the full range of financial solutions, using the most appropriate one that meets the clients’ needs.

£450,000 raised for Precision Engineering Company

The Managing Director approached us with an urgent funding requirement. This family owned specialist business of 40 years standing had peaked in 2008 with turnover reaching £10 million, with an operating profit near £750,000 with net assets of £2.5million.

Various factors – recession and a poor acquisition among them – had led to a serious cash problem. Whilst the order book for 2012 looked very healthy, the business needed additional working capital essentially to cover trading losses for the current and next quarter. Thereafter the business would be generating cash again.

Whilst turnover and profitability had taken a big hit, the asset base had stood firm and we were able to recommend a re-financing package that could be achieved quickly and deliver on the key requirements.

From start to finish we, together with our asset finance partners, completed a fund raise that generated new money of £450,000 for the business. The whole process took less than four weeks.

Most importantly, the MD is now able to plan comfortably for 2012 and is no longer under pressure and fire fighting every working day.

1. Unique features of the machinery are:
2.  Machines are designed to be simple to operate and maintain
3. Highly competitive in their vertical market
4. Incorporate Diesel Electric drive systems
5. Can be run off their own engine generator set or by plugging into the mains power
6. More fuel efficient
7. Simple design and electric drive motors means that any electrician can fix a function problem. They do not require any proprietary mechanical tools or knowledge 

The Key financial points of this opportunity: 

• Current orders £750,000 with a further recent win of £375,000 plus an additional pipeline of circa £300,000
• Gross margins of over 50%
• Low overhead structure
• Return of capital possible within 12 to 18 months
• Management to supplement investment with £25,000 capital
• Orders to be backed by letter of credit and/or cash
• Production only against confirmed orders
• Investment required to fund sub-contracted manufacture

The directors are flexible as to the structure of the investment.  The opportunity is urgent as there is considerable pressure to complete the initial orders before the customers opt for alternatives.

Reference: 6825

They have recently agreed Heads of Terms to acquire a competitive company in North Africa which trades at a slightly lower turnover but realizes £1.7 million net profit.  With the blessing of the host government, the company is registered in the tax-haven of Dubai from where it charges significant management fees.  The purchase price, for which the investment is required, is agreed at £3.4 million – broken into three payment tranches: the first of these affects total sale of the company for down payment of £2 million and the remainder of the price of acquisition is budgeted as part of profits generated in the next two years.

The deal has been negotiated by a former senior manager of the North African company who is now a Director in the takeover company (our client).  He is thus fully familiar with both companies and there appear to be no hidden surprises, therefore.  The company is owned by two individuals who have good reasons for selling the business in terms of family commitments and health.

Initial appraisals of the target company reveal several areas to improve efficiencies and scale up the profits in excess of £2 million annually.  Moreover, whereas the presence of oil rigs in sub-Sahara Africa is limited to about 20 in total – in the country where the acquisition company operates there are more than a thousand serviceable sites, with the acquisition company contracted to 9.

The opportunity for our investor is therefore to become involved on a compelling equity level.  Exit may take place within three years by a sale of the company or not, as the option may be. This deal will appeal to those investors who are familiar with the oil and gas industry, ‘catering hospitality’ and/or doing business in Africa.  This is a continent of great distress when things go wrong, but also where great fortunes have been made when they are played right.

Reference: 6823

Our client is a young and talented British designer of bridal and evening wear. In less than two years she has established a known brand, sold in numerous retail outlets, enjoyed global magazine exposure and her designs have been worn by celebrities and on national television.

Earlier this year however, the factory that produced the bridal collection closed down, leaving hundreds of dresses unproduced. Whilst these orders were fulfilled, working capital resources were seriously depleted leaving little room for error.

Beer & Young were introduced, quickly set to work and generated interest from eight private investors. Several meetings were held; one investor stood out and quickly offered terms. Within a further ten days shareholder agreements were signed and capital invested into the company account.

Our client was naturally delighted and offered the following comment:

“My business has been developing well for some time, but due to unforeseen circumstances, I found myself needing urgent funding support. My bank wouldn’t support me so I turned to B&Y. Not only did they resolve my funding issues, they helped me through the process and made it all simple. I am truly grateful for their efforts and recommend any business owner to contact them”.

TH, Entrepreneur

Earlier this year however, the factory that produced the bridal collection closed down, leaving hundreds of dresses unproduced. Whilst these orders were fulfilled, working capital resources were seriously depleted leaving little room for error.

Beer & Young were introduced, quickly set to work and generated interest from eight private investors. Several meetings were held; one investor stood out and quickly offered terms. Within a further ten days shareholder agreements were signed and capital invested into the company account.

Our client was naturally delighted and offered the following comment:

 “My business has been developing well for some time, but due to unforeseen circumstances, I found myself needing urgent funding support. My bank wouldn’t support me so I turned to B&Y. Not only did they resolve my funding issues, they helped me through the process and made it all simple. I am truly grateful for their efforts and recommend any business owner to contact them”.

TH, Entrepreneur  

A record number of entries were submitted and the judges will soon be deciding the winners for the profession’s most prestigious awards scheme.

Beer & Young are delighted to announce that we are once again finalists in two categories.  We will be defending their title as ‘Business Rescue Funder of the Year’ and we’re also contenders for ‘Business Rescue of the Year – sub £20 million turnover.’

The awards will be held at the Lancaster London hotel on October 5^th, which will feature Edward Davey, the minister with responsibility for insolvency, as keynote speaker.

Let’s keep our fingers crossed!