Bank recognises needs of young firms
Clydesdale creates support unit for technology start-ups
An Emerging Technology Unit has been created with the express aim of supporting high growth businesses in the sector.
The establishment of the unit is an acknowledgement by the banks that these firms may have been under served by lenders. They have stated a commitment to supporting companies in their early years when they will sustain losses.
The creation of this team is part of Clydesdale and Yorkshire banks’ partnership with the British Business Bank under its ENABLE Guarantee programme, announced earlier this year. Up to £125 million of new lending by Clydesdale and Yorkshire Banks, will help more small businesses achieve their growth ambitions.
The new unit will form part of the banks’ specialist and acquisition finance team and will be led by Tom Brock in Glasgow who has extensive experience supporting the sector.
He will be joined by staff in Glasgow and Oxford, capitalising on both regions’ reputations as sources for technological innovation. The team will have a UK-wide remit and customers will have access to a dedicated and experienced relationship manager.
Paul Shephard, director for business and private banking at Clydesdale and Yorkshire banks, said the new unit had been set up in recognition of changes in the economy.
“The nature of British business has shifted considerably in the last few decades from one of manufacturing, industry and production, to one of knowledge, service and innovation. Traditional manufacturers still play an important part in our economy, but the emergence of technological innovation is something we have the expertise and desire to support.”
The banks accept potential customers may have short term losses, but will also look for them to have:
· Raised external equity investment of at least £500,000
· Developed a commercial product which is beyond initial research phase
· Delivered revenues of at least £500,000; and
· Evidence of sound intellectual property
In return, the banks will be able to advance senior debt and working capital facilities of up to £1 million. Debt requirements above this level will continue to be served by the established Growth Finance team.
The UK Government has identified the technology sector as a key driver of future growth, innovation and employment. It is supporting the sector through a range of initiatives.
Keith Morgan, British Business Bank chief executive, said: “It is great to see the early impact of the programme in bringing new revenue streams to smaller high-growth British technology businesses, which have such potential to build the UK economy.”