Funding Your Business – Alternative Sources of Finance

Given current reports in the media about the lack of funding available to SME’s (small and medium sized businesses), you’d be forgiven for thinking that financing the development of your business is almost impossible. However, this is not quite the case – with the correct approach there are alternatives that can pave the way to a more flourishing future.

For example, in the East of England area, Finance East Loan Management Limited has now committed in excess of £3.3m in loans to thrity SMEs. Funded by the EEDA, the Regional Growth Loan Scheme is available to local limited companies with a minimum turnover of £500k, and which can demonstrate a requirement for long-term investment to deliver the strong development potential that they are showing.

“We are well into our 2nd year of existence and it’s clear from the number of approaches we are receiving that there is significant demand for the type of loan facility we are offering,” explains Stuart Ager, Senior Fund Manager at Finance East. “In an economy that seems very patchy at present, the lending environment remains tight for growth orientated SMEs and we continually meet driven management teams who have strategies and market opportunity to expand, but cannot do so because of lack of finance – that is the role of the Regional Growth Loan Scheme – to provide a level of funding that will enable a business to move forward and add to the economic development of this region.”

The EEDA Regional Growth Loan Scheme fills the gap between conventional debt and equity funding. It can be a stand-alone funding source, but is complementary to other sources of finance such as traditional bank borrowing. The loans are typically of amounts between £50k and £200k, paid in tranches, and repaid over terms of between two and five years. The interest rate offered varies between 5-9% over the base rate, depending on the risk level, while security is typically mortgage debenture, and also subject to a risk assessment.

As with any finance application, the key to success is a clear business strategy that can deliver the forecast growth, outlined in a detailed business plan. You will need to:

Identify the ways in which funding will best support your short and long term business goals
Get your company’s financial statistics ready with detailed breakdowns of past performance, current status and forecast activity
Provide you with relevant market intelligence that shows how you compare favourably against competitors
Help you optimise your management structure
Single out the KPIs (Key Performance Indicators) that have positive impacts on your business to demonstrate that you are a proactive, professional organisation.

CBHC LLP can help you to clarify your business strategy and get your business ready for growth. If you are interested in applying for one of these EEDA-funded loans, do give our Corporate Finance team a call on +44 (0)1245 453881 – and let us help you to get the funding that you need to take your business to the next level.

CBHC Chartered Accountants LLP are one of the largest practices in Essex, England, with offices in Chelmsford and Romford.

Services include: business advisory, wealth management, audit, accountancy, taxation.

Regional Shopping Centers – Description and Design

The tenant profiles of regional centers differ
little from those of the super- regional malls. The tenants in regional malls
paying the highest rent and having the highest sale’ volume per square foot of
tenant area are also similar to the tenants of the super-regional malls. Many
tenants occupy very little square footage and have relatively low actual sales
volume.

The term regional shopping center also can apply to very large strip
shopping centers. The term strip center generally refers to a shopping
center with a single line of tenants or single-side design, in contrast to a
mall in which shops face one another across a pedestrian area. A regional
shopping center features one or more regional or major department stores, each
at least 100,000 square feet in size. The
strip center may also feature a food store, which is seldom found in malls.
Strip designs for regional centers are most often found where inclement weather
would not deter the pedestrian traffic necessary between the anchor tenants and
the local tenants.

The term power center denotes a regional strip center of unusual size.
Often 300,000 to 500,000 square feet or more, these huge centers feature a
preponderance of anchor tenants with less than 15 percent local tenants. They
often combine off-price or home-improvement customer appeal.

Community Shopping Centers – Description and Financing

Community shopping centers generally have less than 200,000 square feet in gross leasable area. They may be designed as enclosed or open-air malls or as strip centers. The centers are organized around one or more of the major national or regional retailers, one or two “junior” department stores, or a store owned by a company specializing in smaller department store operations. A junior department store will generally have between 30,000 and 50,000 square feet and feature a full line of soft goods (clothing, books, and so on) and often some hard goods (appliances, furniture, and so on).

In the 1980s, major national and regional discount department stores emerged as new, significant anchors for community shopping centers. Retailers such as K-Mart (of the S.S. Kresge Corporation) and Wal-Mart became the dominant force in retail sales growth in the United States in the late 1980s. These stores, usually between 75,000 and 125,000 square feet, compete for discount shoppers with merchandise priced below that of the traditional department store. These super-discounters have become the most popular anchors in many new community strip centers because of their heavy advertising, low prices, and excellent locations, which generate shopping traffic.
Community shopping centers generally require trade areas with populations of 100,000 or more. However, these centers are often located in smaller towns that serve as a shopping area for a larger, multi-community area. Besides the anchor stores, the 10 tenants most likely to appear in these centers are:
women’s ready-to-wear shops

restaurants (with liquor service)

fast food/carryout restaurants

beauty salons

family shoe shops

jewelry shops

card and gift shops

restaurants (without liquor service)

women’s specialty clothing shops

banks

In strip centers, the anchor usually has a central location; if there are several anchors, they are separated. It is important to remember that because of the
weather-exposed design of strip centers, shoppers generally walk for shorter distances between stores to shop than is the case in an enclosed mall area. Rents in strip centers will generally run 40 percent to 60 percent less than those found in similar retail areas in enclosed malls. As a rule, sales per square foot will be correspondingly lower than sales in enclosed malls.

Like major department stores, food stores are destination stores. The other tenants depend to some extent on the occasional or impulse sales afforded by a good location in the pedestrian traffic pattern between the larger stores. Like the anchors in large super-regional malls, destination stores in community shopping centers often pay rents that cover only the costs to the center’s owner; the more specialized retailers pay rents that represent true profit potential.