Small Business Fund century loan helps launch world first cutting system for mining industry.
Published: 16th August 2004
Left to right is Allan Wood (Investment Manager), John Warren (Hydra Managing Director) and Gordon McShannon (Hydra Chief Executive) inspecting the new coal cutting system
South Yorkshire Investment Fund (SYIF) has completed its 100th Small Business Fund loan by supporting a Rotherham-based company that has developed a world-first cutting system that is set to revolutionise coal mining around the world.
The £100,000 loan to Hydra Mining Tools International Ltd, which was formed from a management buy-out in 2000, will enable the firm to launch and market a new cutting system after ten years of development.
The cutting head, for use with continuous mining machinery, uses a water cooled cutting process to reduce dust and the danger of sparking and explosion.
The water cooled cutting head is the first of its kind to be successfully developed. After extensive trials in South Africa Hydra is now ready to produce the system commercially at its Doncaster works. Sales will be targeted at coal producers in Hydra’s key export markets of South Africa, the United States and Australia.
Gordon McShannon, Hydra’s Chief Executive, said: "The new cutting head is the result of ten years’ hard work, innovation and investment during which time we had to overcome many engineering problems. Now, following field trials, we are ready to produce the system commercially and the funding from SYIF will help us with launch and marketing costs."
Hydra currently employs around 90 full-time workers and Mr McShannon said production of the new cutting system would not only secure existing jobs, but also hopefully create employment opportunities as sales build up.
He said: "We are quietly confident that the new cutting head will be successful as it increases and improves the coal production process and can be fitted as an attachment to existing continuous mining equipment. Each system can also be tailored to meet an individual customer’s cutting requirements."
Allan Wood, Investment Manager, said: "The Hydra story is one of determination to succeed in the face of many challenges. We are delighted that we are celebrating our 100th Small Business Fund loan by supporting the launch of a South Yorkshire invention that looks set to provide real benefit to the international coal industry."
SYIF 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 over £7.5 million in more than 100 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.
The second product is an equity-linked package of a loan with equity options or an equity investment, ranging from £50k to £2.5m where the Fund may take a minority shareholding in the business.
South Yorkshire Investment Fund Ltd also administers and co-ordinates the provision of Microloans ranging from £1k to £15k on behalf of the Enterprise Agencies in South Yorkshire and provides access to Business Angel investments from the Yorkshire Association of Business Angels.
A unique feature of how the Fund can help businesses is the Mentorbank project, which provides subsidised mentoring support to help management teams grow their business more profitably.
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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).