£1.5 million of investments in last month
Published: 26th March 2004
LEFT TO RIGHT - Tony Goulbourn, Chief Executive of SYIF, Clive Downward, Investment Manager who led the deal and Managing Director of IFA Martin Burnham.
South Yorkshire Investment Fund has just completed three of its biggest deals to date in the space of just one month.
Independent Forgings and Alloys, based at Victoria Forge, Livesey Street in Sheffield, has secured a £500,000 mezzanine loan.
The loan, part of a £2 million total finance package, will be used to purchase a GFM forging machine to help the business to develop new products and penetrate new markets. The Fund had previously provided the company with two unsecured £50,000 loans.
Managing Director, Martin Burnham, said: "SYIF has been very supportive throughout. What impressed me was the speed at which they were able to respond to the tight timetable that we were working to. This new machine represents a strategic step forward for us and we are confident that we can use it to develop new markets."
Clive Downward, Investment Manager who led the deal, said: "This is an exciting time for the company which is going from strength to strength."
Another company to benefit from a £500,000 investment is advanced engineering firm Springer Rapid Industries Limited - a new, Rotherham-based, company which expects to start production in May this year.
Based on Teesside for 17 years, Managing Director Gordon Styles sold his previous business in April 2000. After three years of extensive, worldwide market research, and encouraged by the help and assistance he and his new management team received from SYIF, they took the decision to develop their next business in South Yorkshire.
The debt and equity investments from SYIF form part of an overall investment of £3.2 million spread over three years. It will assist in the acquisition of state-of-the-art engineering equipment and the initial and ongoing working capital requirements of this start up venture. One of the machines being acquired will be the most advanced machining centre of its type anywhere in the world, and will be the first of its kind to be introduced to the UK SME sector, operating up to four times faster than any other machine in its class.
Managing Director, Gordon Styles, said: "SYIF has been extremely helpful in providing this investment. We worked hard on our business plan and expect to provide skilled employment to 45 people within a three year period."
Nigel Feirn, the Investment Manager who led the deal, said: "We were very impressed with the drive and ambition of this successful and experienced management team. The business brings advanced manufacturing facilities to South Yorkshire and we expect the Company to become a market leader in its field."
And Rotherham firm RMF Engineering Ltd has received a £500,000 mezzanine loan. One of Europe's leading manufacturers of corrosion resistant chemical plants, the investment will be used specifically to provide additional bonding facilities for advance payment guarantees which are often demanded by overseas customers engaged on long term contracts.
RMF Finance Director, Brian Taylor, said: "This loan is crucial to our export drive and SYIF has been extremely helpful and innovative in devising this solution to our problem. We are now in a strong position to take the company forward and to be able to service the rapid increase in activity we have seen in the market place over the past 12 months."
SYIF Investment Manager, Clive Downward, said: "This is a really important deal which will ensure RMF completes its existing full order book and is in a position to secure further large export orders. One of the main objectives of SYIF is to close the funding gap which often prevents SMEs from growing and that's just what we have done for RMF."
Tony Goulbourn, Chief Executive of South Yorkshire Investment Fund Ltd, said: "We are thrilled to have been of assistance to these three businesses. They are hugely significant deals, not only for the companies concerned, but for both SYIF and the region."
The Fund can provide loans and equity investments ranging from £15k to £2.5m to businesses in, or prepared to relocate to, South Yorkshire. The Fund has already invested £6.3 million in over 83 businesses.
It offers two key products, one of which is loans ranging from £15k to £150k with effective annual interest rates from as little as 2.4% per annum. Loans are unsecured for the majority of established profitable businesses with unsecured loans of up to £50k available for start-ups or early stage.
We can also provide mezzanine loans up to £1.5 million and equity of up to £1 million which means we can finance deals of £2.5 million in total. These investments are to complement existing sources of finance and are intended to bridge any funding gap there may be in an expansion plan.
A unique feature of the way the Fund can help businesses is the Mentorbank project, which provides subsidised mentoring support to help management teams grow their business more profitably. South Yorkshire Investment Fund also run Capital Network a Business Angels introductory service for early stage businesses in South Yorkshire. Where appropriate Business Angel finance can also complement South Yorkshire Investment fund packages.
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About South Yorkshire Investment Fund
South Yorkshire Investment Fund provided seedcorn, loan and equity linked investments, ranging from £15k to £2.5m, specifically to help small and medium businesses meet the gaps in funding they need for growth and development.
Created as part of the Objective 1 programme, the Fund is a private and public sector business finance provider. The European Regional Development Fund and Yorkshire Forward are investors in the Fund.
South Yorkshire Investment Fund also provided access to Business Angel investments from the Yorkshire Association of Business Angels and Microloans through BiG Business Loan Fund and Donbac Microloan Fund.
Finance Yorkshire has now taken on responsibility for providing gap finance in Yorkshire and the Humber.
For further details please contact Suzanne Tinkler, on 0845 649 0000.
South Yorkshire Investment Fund Ltd is a company limited by guarantee (Registered No 3936065). South Yorkshire Investment Fund comprises three sub funds, the South Yorkshire Investment Capital Fund, the South Yorkshire Investment Development Fund, which are each managed by YFM Venture Finance Limited, and the South Yorkshire Investment Small Business Fund, which is managed by Finance South Yorkshire Ltd. YFM Venture Finance Limited (Tel 0113 294 5000) and Finance South Yorkshire Ltd (Tel 01709 386 377) are each authorised and regulated by the Financial Services Authority. South Yorkshire Investment Fund also provides a number of services, which are not regulated by The Financial Services Authority. These include the pilot Seedcorn Fund, BiG Business Loan Fund, Mentorbank and access to the Donbac Microloan Fund. BiG Business Loan Fund is managed by Donbac Ltd (company registration No. 01925556) and Key Fund Yorkshire Ltd (Tel 0114 242 8900).