< Previous20 Business Link www.blmforum.net CORPORATE FINANCE © Shutterstock /Photon photo angel investor who, simply defined, is a high net worth individual who makes use of their own personal disposable finance and makes their own decision about making an investment. Angels would normally take an equity stake in a business in return for providing equity funds. As well as capital, angels can also provide their experience, knowledge and contracts, making them especially attractive to early stage businesses. Every investor is different and will therefore provide differing amounts, but typical investments range from between £10,000 and £500,000, though deals of up to £2 million are becoming more commonplace as angels group together in syndicates. Although angels are one of the most significant investors in start-ups, that shouldn’t deter more established firms from making enquiries. It’s important to keep in mind that securing an angel can be a difficult and protracted process, as well as being harder to research and contact compared with a private equity firm. As we have already explored, capital is often sought to help fund MBOs which is a transaction where a company’s management team purchases the assets and operations from the business owners. From a manager’s perspective, an MBO is an attractive option as it allows them to take the reins and enjoy greater control and freedom owning the business rather than serving as an employee. It’s equally advantageous from a seller’s point of view as it allows corporations to shed non-core divisions or to retire. A typical MBO will see a management team pooling resources to acquire all or part of the business they manage, and this financing is often comprised of personal sources, private equity and seller financing. An MBI, on the other hand, is where an external management team acquires a company and replaces the existing management team. In an MBO, the management team is a known quantity and therefore has a greater understanding of their business and its employees, but an outside management team will need to become acquainted with a company’s operations, as well as build up relationships with clients and staff. Regions across the UK will also boast their own funding initiatives, designed to bolster the local economy and sure up businesses in the area. In our region, there’s the Northern Powerhouse Investment Fund, facilitated by a collaboration between British Business Bank and ten Local Enterprise Partnerships in Yorkshire and the Humber, the North West and Tees Valley. It provides over £400 million of investment to boost SMEs in the North with funds coming from the European Investment Bank and the European Regional Development Fund. Elsewhere, there’s the Sheffield City Region’s Jessica Fund, which was established back in 2010 and has invested tens of millions in the region, providing debt funding for commercial property and regeneration projects. Businesses are beset by all manner of challenges and financial pitfalls, doubly so in the outbreak of COVID-19, but there exists a variety of different finance options in order to circumvent these issues and keep trading. 18-21.qxp_Layout 1 06/05/2020 09:44 Page 3www.blmforum.net Business Link 21 CORPORATE FINANCE UK on course for deepest recession in three centuries, says Resolution Foundation Coronavirus is on course to deliver the biggest annual fall in GDP since the 1700s and the highest borrowing since the Second World War, the Resolution Foundation has warned. The projected quarterly GDP fall of 35% in the second quarter of this year is by far the largest since records began in 1955.. Looking at 2020 as a whole, the OBR projects an annual fall in GDP of 12.8% - six times as big as that seen during the 1980s recession and more than two times bigger than the depth of the financial crisis. This economic damage combined with the policy response to it is projected to see government borrowing reach 13.9 per cent. This would be its highest level since the war, exceeding the 10.2 per cent seen in 2009-10. As a result the OBR projects debt to reach its highest level since the 1960s. Turnover expected to halve for 70% of micro businesses Almost 70% of the UK’s smallest businesses expect to lose more than half of their annual turnover due to the coronavirus crisis, according to research by the University of Sheffield conducted in association with Small Business Britain. Academics from the University of Sheffield’s Management School have surveyed over 1,500 micro business owners to assess the resilience of the UK’s most vulnerable firms, many of which feel they have been overlooked amid the COVID-19 pandemic. They found 67% are now “very” or “somewhat” lacking in confidence, with just two per cent very confident about their prospects – believed to be some of the worst figures on record. More than three quarters (78%) said cash flow was their biggest problem, followed by a drop in customer demand (58%) and difficulty accessing finance (27%). The overwhelming majority (93%) do not have any insurance to mitigate losses caused by the COVID-19 pandemic. Despite these challenges, more than half (55%) have not sought any business advice to help them through the crisis – but highlighted marketing and sales, business resilience and financial planning as areas where they needed help. The study found micro businesses are responding to the pandemic in different ways. The biggest challenge is engaging and supporting those micro business owner- managers, particularly those delivering face-to-face services, who do not feel able to respond or who have suspended or ceased operations. The University of Sheffield academics have called on the government to prioritise support for these firms, allocating resources according to the greatest levels of need. Chancellor Rishi Sunak has revealed a new ‘micro-loan’ scheme to help small businesses hit by the COVID-19 pandemic. The Bounce Back Loans scheme gives smaller firms access to 100% Government-backed loans of up to £50,000. The “fast-track finance scheme” comes after concerns were raised about the slow and burdensome application process that businesses have faced when trying to access existing Coronavirus rescue schemes. The scheme has been designed to ensure that small firms who need vital cash injections to keep operating can get finance in a matter of days. Firms wanting to apply will have to fill out a two-page online self-certification form, which the Government hopes will unblock the backlog of applications being held up because of credit checks and lenders’ staffing levels. “Our smallest businesses are the backbone of our economy and play a vital role in their communities. This new rapid loan scheme will help ensure they get the finance they need quickly to help survive this crisis,” said Mr Sunak. Chancellor reveals new Bounce Back Loans for small businesses © Shutterstock /gguy UK economy not expected to return to its late 2019 size until 2023 The EY ITEM Club Spring Forecast 2020 has significantly downgraded its near-term outlook for the UK economy, with predictions of a deep, short recession this year due to the impact of COVID-19. UK GDP is now expected to contract by 6.8% in 2020, before returning to positive growth of 4.5% in 2021. The forecast is based on the assumption that some lockdown restrictions will start to be eased in May, with even more in June. EY ITEM Club says that the substantial fiscal and monetary stimulus that has been enacted by the Treasury and the Bank of England should provide serious support to activity once the coronavirus impact starts to wane but, even with these measures, the UK economy is not expected to return to its Q4 2019 size until 2023. Howard Archer, chief economic advisor to the EY ITEM Club, says: “Our report assumes that the Government’s measures aimed at supporting businesses and saving jobs will have a significant positive impact, which is absolutely crucial to limiting the potential longer-term damage to the economy.” © Shutterstock /David Carillet © Shutterstock /BreizhAtao 18-21.qxp_Layout 1 06/05/2020 09:44 Page 422 Business Link www.blmforum.net NNBC Q&A How is the pandemic affecting SMEs and what funding is available to help? The effects of COVID-19 on SME businesses across the UK has been profound, so let’s be clear, if you’re a business owner worrying about how the market uncertainty is impacting on your business already, or may in the future, you are not alone. We’ve been assisting lots of clients new and old, who are confused about what funding is available to their business. So we’ve been helping businesses understand the various financial products available to them such as invoice finance and highlighting the ins and outs of the Coronavirus Business Interruption Loan Scheme. Can you tell us more about invoice finance? Invoice finance is growing in popularity among UK SMEs, particularly those with long cash collection cycles like construction, manufacturing and recruitment. Invoice financiers use unpaid invoices as security for providing funding. Approved businesses access a percentage of an invoice’s value, typically 85% or 90% and quickly; sometimes within 24 hours. The amount of funding given is based on the risk appetite of the Finance provider. There are two main types of invoice finance, factoring and invoice discounting: 1. Factoring allows businesses to generate money against unpaid invoices. The finance provider will lend you up to 90% of the value of your invoices. It will also manage Q&A Neil Buckley, Managing Director, NNBC Financial We spoke to Neil Buckley, Managing Director of NNBC Financial, about how the COVID-19 pandemic is affecting businesses, the Coronavirus Business Interruption Loan Scheme, and the benefits of invoice finance. 22-23.qxp_Layout 1 06/05/2020 09:46 Page 1www.blmforum.net Business Link 23 NNBC Q&A your sales ledger and collect payment for your invoices directly from your customers, hence the term ‘disclosed invoice finance’. They will then deduct the costs of the factoring service, before paying you the remaining balance. 2. Invoice Discounting works similarly to Factoring but as a business, you retain control of customer payments, hence the term ‘undisclosed invoice finance’. Your business pays a fee and a ‘discount charge’ (similar to interest) if the funding is utilised, similar to a standard overdraft. There are also a few different ways you can finance your debtor book within the two above structures: • Selective or spot factoring essentially means only funding a select few or single debtor. For example, as a business you may only have one customer who you supply on terms, the rest may pay as soon as the invoice is raised. In this scenario, you would only need to finance that customer’s invoice, for which a selective invoice finance line would work. • Whole ledger finance is used when all of your customers pay on terms, and as a result, you require your whole debtor ledger to be funded, not just a select one or few. A question to ask yourself is “How much cash have I got stuck in my debtor book, could having access to 85% or 90% of that capital help my business?” If you’d like to arrange a no obligation exploratory call to discuss, please get in touch. What is the Coronavirus Business Interruption Loan Scheme (CBIL) and how can it help? The scheme went live on Monday 23 March and will initially run for six months. It is a means of financially assisting businesses that have suffered disruption as a result of the coronavirus. There are now over forty accredited lenders providing the loans, including all the high street banks. In theory, there’s up to £5 million available. However, in reality, lenders will look to provide loans that are realistic for the needs of each individual business. Moreover, the amount may need to be verified by way of a cash-flow forecast or other supporting information. The scheme has many positive features at this difficult time for businesses but the reality is that obtaining the finance may be more involved and slower than has been reported in the press, so we suggest businesses apply early. It’s also important to bear in mind that it’s not the only option open to businesses. In fact, as the lender will pay a fee to access the scheme, if they can offer finance on normal commercial terms without the need to make use of the scheme, they will do so. The majority of lenders are still open for business, although criteria has changed. There is still an appetite to fund investment property, bridging, commercial property, invoices and assets. Please get in touch to discuss your requirement. For support, advice and to find out more about funding and financial schemes, visit www.nnbcfinancial.co.uk, email info@nnbcfinancial.co.uk, or call 0800 009 6066. © Shutterstock /lovelyday12 22-23.qxp_Layout 1 06/05/2020 09:46 Page 224 Business Link www.blmforum.net online training In the COVID-19 pandemic, “normal” training has gone largely out the window. But business never stands still and with online training, a crisis can become an opportunity. Over the last few months, there has been a widespread move online with training providers upskilling individuals, employees and apprentices from the safety of their own home. The importance of 24-27.qxp_Layout 1 06/05/2020 09:49 Page 1www.blmforum.net Business Link 25 ONLINE TRAINING T raining comes in many forms, from a training provider visiting a business to educate and upskill staff, to employees being sent to a dedicated training facility for a session, seminar or course. Of course, during the current situation in which social distancing is critical and lockdown measures are enforced by law, these types of training can no longer take place. Although online training has existed in one form or another for decades with many people – from students right through to senior staff – taking advantage of it. Over the last few months, however, it has exploded in usage as apprentices look to maintain their learning, companies complete their employees training and individuals that are now working from home or have been furloughed look to use the time to upskill. Outside of the crisis, the appeal and popularity of online training lies in its flexibility. From a home office or smart device, it can be worked around any schedule, fitting in with other engagements and appointments. Until recently, it could also even be undertaken on to go, turning that daily train or bus commute into a learning opportunity. That same flexibility is what has given online training an edge over its counterparts, allowing an uninterrupted learning stream for all manner of individuals while they observe social distancing regulations. Of course, with a huge number of workers now based at home, bandwidth limits have been stretched and, in towns and cities especially, internet speeds have been affected. However, many training providers will offer apps and other digital resources with come ready downloaded with myriad tools and information, thereby ensuring that even when internet speeds waver, training can still take place. There’s no denying that the pandemic and the measures implemented in order to fight it have massively disrupted every aspect of our lives. It’s fundamentally changed our working lives and will likely leave a lasting impact on the corporate world. These disruptions were keenly felt by apprentices who, in many industries, have been forced to put their learning on hold, potentially putting their future careers in jeopardy. Although apprentices can pause their apprenticeship for up to four weeks without affecting their ability to complete it, e-learning can help to minimise these disruptions so they can continue their learning and help to safeguard their future. The government has committed to supporting both apprentices and employers to continue to build the skills capabilities the country needs in the here and now and in the future. In this way, employers and training providers are indispensable for the continued wellbeing of the economy on a regional and national scale now and in the years to come. It is the government’s ambition to support “wherever possible” apprentices to complete their apprenticeships adding that “High- quality apprenticeships will be a vital contributor to the economic recovery that will follow the pandemic”. The government has therefore 26 Á © Shutterstock /one photo LIVES launch online education package LIVES, the Lincolnshire-based first responders and provider of first aid training, has created a bespoke eLearning education packaging that both community and home- based carers can complete. The package is all about infection prevention and control, this will help you as carers protect every vulnerable member of Lincolnshire and beyond by safely knowing how to protect them against the Coronavirus and other harmful diseases. LIVES can also track how many people have used it, which will also help you know how many of your staff has accessed the training. The education material outlines: the latest guidance on donning and doffing personal protective equipment, equipment cleaning guidance, and what to do during a cardiac arrest scenario during the coronavirus pandemic. Individuals can undertake this education from the comfort of their homes or workplace. The education is current and is created from the latest Public Health England guidance. To find out more, visit www.lives.org.uk. 24-27.qxp_Layout 1 06/05/2020 09:49 Page 226 Business Link www.blmforum.net ONLINE TRAINING committed to working with training providers, end- point assessment organisations and external assurance organisations to mitigate the impacts of the disruption posed by the pandemic and to “maintain the integrity of apprenticeships”. Training providers are supporting this commitment and ensuring apprentices can complete their apprenticeships and providing support and resources to other employees making the most of e- learning. No doubt misconceptions existed around online training before the pandemic with some employers perhaps reluctant to use them over the misguided perception that they aren’t the equal of in-person training or lack the range of subjects. This couldn’t be further from the truth. Online courses cover a diversity of subjects from health & safety, administration and quality assurance right through to management and everything in between. Because of the nature of e-learning and the flexibility we’ve already touched on, it means training providers are uniquely positioned to get creative with their content and how it’s delivered. This ‘out of the box’ thinking offers a great Make the most of your time by studying a new qualification during lockdown Wise Global Training offers a range of online courses, allowing users to save time and money as they upskill and continue their training during lockdown. Among the company’s offering is the IOSH Managing Safely eLearning course. With a 100% pass rate, the course is designed to get you the results you need and in the shortest time possible. As well as coming with full tutor support, the fully accredited course can begin five minutes are payment. The NEBOSH NGC eLearning course, meanwhile, is a cost and time effective way to gain your qualification. The course is broken down into bite size, manageable chunks to help you learn faster and ensure you understand the course material all while moving you closer to passing your exam. For those that desire to upskill, the company has a range of valuable short course available. To find out more, visit www.wiseglobaltraining.com or call 01482 211989. Train at home with Verner Wheelock The lockdown has not prevented Verner Wheelock from delivering the top-quality food industry training for which it is noted. Instead, the company is using technology to allow food industry professionals to receive the training they need – at home or any other location. Managing Director, Alison Wheelock, explains: “Our training courses are delivered through live video conferencing which enables the delegates and trainer to see each other in a virtual classroom environment. The courses have been tailored to suit remote delivery, but the usual content is being delivered by the same qualified, experienced trainers.” She adds: “The training is live and interactive, so delegates can ask questions directly or through chat facilities. The trainer can even split attendees into small ‘breakout’ groups to perform workshop activities. It’s the closest thing you can get to a face-to-face training session.” For details on HACCP, food safety, auditing and specialist courses delivered through live video, contact claire.lennon@vwa.co.uk. 24-27.qxp_Layout 1 06/05/2020 09:49 Page 3www.blmforum.net Business Link 27 ONLINE TRAINING opportunity to make courses and learning content more engaging, memorable and, thusly, more effective. It also means that content can be continually refreshed and updated with the latest research and findings in a way that traditional location-based courses simply can’t compete with. Providers also have access to analytic data from which they can see what does and doesn’t work about the courses they provide and, crucially, they way in which they’re delivered. That’s certainly more reliable that learners filling out a feedback form after they’ve finished the course. So, whether it’s learning new skills for a career change, completing an apprenticeship, ensuring staff are operating to their fullest potential or making the best opportunity of the lockdown, online training is truly a blessing in these times. Although the coronavirus crisis presents an unprecedented hurdle for businesses to overcome, with the use of online training, a stronger, more skilled workforce is evolving, one that will be ready to help get the economy back on track and ensure future growth. As the corporate world evolves, no doubt e- learning and online training will be more commonly used for staff and individuals to achieve their potential and help create a more skilled workforce. © Shutterstock /fizkes 24-27.qxp_Layout 1 06/05/2020 09:49 Page 428 Business Link www.blmforum.net PHARMACEUTICALS SPOTLIGHT Y orkshire is home to a number of pharmaceutical start-ups, manufacturers, researchers and universities playing an important role in the country’s pharmaceutical prowess. The pharma industry is constantly shifting, with new technologies speeding up the development process, trends such as the growth of personalised medicine pushing the industry further and legislation changes - which will continue to be altered as the UK leaves the EU. With the threat of antimicrobial resistance, a longer living population, and now most pertinently COVID-19, the pharma industry is under severe pressure to pick up the pace of innovation. Though the industry has been recognised as slow to adapt to change - when it comes to digital solutions in particular - a plethora of innovations are now being employed. Pharmaceutical companies are turning to advanced technologies like artificial intelligence (AI) to improve operational efficiency, streamline processes and grow productivity. Holding the potential to reduce the research and development spend of new drugs, AI and predictive analytics are accelerating innovative approaches to drug development by intelligently searching large pools of patents, publications and trial data, allowing researchers to examine previous results from tests. AI is set to boost drug development efficiency by removing strain on research efforts, in a data and research-intensive industry, by helping locate data patterns and interpret data analyses faster, rapidly developing hypotheses and proposing molecules for new medicines, ultimately enabling pharma companies to make smarter and more strategic decisions and more quickly arrive at viable drugs. Further, AI can perform protein modelling to understand the mechanics of disease and uncover novel treatment methods and is being implemented to shape more effective treatments, as well as find new uses for existing drugs. AI is has gained heightened prominence in the pharma space due to its use in the fight against COVID-19, with natural language processing, data analytics, machine and deep learning, chatbots and speech recognition used for diagnosis, tracing the virus and treatment. In treatment development AI is being used to develop antibodies and vaccines, to design drugs to fight the outbreak, study the DNA structure of the virus, search through relevant research papers and scan through existing drugs to pinpoint those that could be repurposed. In March, the IBM Summit supercomputer identified seventy-seven compounds as possible treatment candidates, after running simulations on over 8,000 to find molecules able to inactivate the virus. AI was also an essential partner for scientists recreating the genome sequence of COVID-19, allowing this to be done in just a month. Outside of COVID-19, in January, UK start-up Exscientia developed the first AI- designed drug to enter clinical trials, to treat patients with OCD. Expediting the drug development process, the AI- designed compound entered clinical trials within a year, where it would take on average five years with traditional methods. Assisting diagnosis of Coronavirus, AI is detecting pneumonia (a common complication of COVID-19) using CT scans, while cameras with AI-based multi- sensory technology are detecting people with fever. Additionally big data analytics and machine learning are being utilised for surveillance, to track the spread of infectious diseases by trawling through news reports, social media, animal disease outbreaks, travel, airline and other data. Back in December the company BlueDot had managed to uncover Coronavirus before Chinese authorities recognised the emergency. Additionally, AI algorithms are being applied to mobile phone location data to predict disease spread. This could change how we fight future outbreaks. Coronavirus has spurred innovation, research and development across the globe, particularly as researchers race to develop a vaccine with unheard of speed. Aided by the amount of data being shared online, as pharma companies gradually recognise opening up their research is for the greater good of humanity, and gene sequencing data from Fudan University in January, the first human clinical trials for a vaccine began in Seattle in March. pharma firms have donated compounds including those previously tested on other viral pathogens like HIV and Ebola, while others are looking at how to utilise existing technologies that hold the ability to quickly upscale production once innovation With COVID-19 adding to the list of threats to the population’s health, the pharmaceutical industry has been pushed to innovate quickly. Speeding up 28-30.qxp_Layout 1 06/05/2020 09:53 Page 1www.blmforum.net Business Link 29 PHARMACEUTICALS SPOTLIGHT © Shutterstock /directorsuwan vaccine candidates are found. A myriad of projects are underway, involving medical schools, pharma companies and government collaborations. The pharma businesses, research teams and universities in our region are playing their part in the fight against COVID-19. Scientists and clinicians from the University of Sheffield and Sheffield Teaching Hospitals NHS Foundation trust, for example, have joined a consortium to map how COVID-19 spreads, behaves and to see whether different strains are emerging. The consortium will work together and through whole genome sequencing to create intelligence that could provide breakthroughs in how to fight the Coronavirus, and future pandemics. Groups will rapidly analyse the genetic code of Coronavirus samples circulating in the UK, to offer intelligence about the cause of the disease to share with public health agencies, hospitals, regional NHS centres and the government to help combat the virus. The team is publishing its samples to a global 30 Á 28-30.qxp_Layout 1 06/05/2020 09:53 Page 2Next >