Investment levels continue to rise

invest bulletin: issue 1, 2010

Finance Wales has invested over £24 million so far in 2009 – 2010 and more than £10 million in the last quarter alone - a significant increase on the same period last year.

See our latest investment figures.

We’ve been encouraged by the number of businesses seeking to secure investment and are working with more and more business owners, managers and their advisors to structure deals to grow their businesses.

“Finance Wales has the funds to invest in growing businesses, even if others are reluctant to do so,” explains investment director, Peter Wright.

“We believe it’s an excellent time for Welsh business owners and managers to think about investing for future growth to achieve their businesses’ true potential.”

Read Peter Wright's viewpoint on business planning for 2010.

Structured investment is crucial

As uncertainty is making businesses refocus their priorities, many are improving efficiency, reducing costs and some even considering expansion or acquisition. Others are investing to develop new products and expand into new markets, or perhaps move premises; while others are investing in staff training to develop their businesses’ skill base.

Finance Wales is keen to invest in its existing as well as new clients, and to work with their advisors to structure deals. The right structure (equity, debt or a mixture of both) is crucial to make the most of the investment.

“We can look at your clients’ needs and create an investment package of equity or debt investment, or perhaps a mixture of both to give them the best chance to achieve their goals,” Wright explains.

Contact us to discuss the benefits of structured investment for your clients.

Cash-flow is key

A debt investment or an investment combining debt and equity is likely to suit businesses with cash-flow and can help expanding businesses with capital costs, for instance.

For pre-revenue, early-stage businesses forecasting strong growth, an equity-based structure is likely to be more sensible. Subsequent investment can then help growing businesses commercialise products and develop channels to market.

“We consider a range of factors when structuring a deal,” Wright continues.

“Cash-flow is an overriding consideration because we structure deals based on a business’s ability to service debt.”

Planning for growth in 2010

Whether your client is starting out or growing it must have a robust business plan and a real understanding of how it will achieve its goals.

“More and more owners and managers are looking outwards and want to grow their businesses beyond the £2 million turnover ‘glass ceiling’,” Wright concludes. “Right now we’re seeing more businesses with a turnover of £10m plus seeking investment funding. So, encourage your clients to be courageous and embark on a growth path in 2010 – work with them to write that new business plan.”

With the right business plan Finance Wales can invest in your client’s business in 2010. We’ll also be there for the long-term to invest further rounds.

Contact us to discuss your clients' investment opportunities.