SEEDA offers Real Help for Credit Crunch Companies
14 January 2009 |
| SEEDA Board Member Alex Pratt OBE, SEEDA Executive Director Skills and Sustainable Prosperity Oona Muirhead CBE, Finance South East Chief Executive Sally Goodsell and Mercator Media Managing Director Andrew Webster at Mercator Media's HQ. |
As Lord Mandelson today launches Government’s £20bn "Real Help with Finance" package for small to medium sized enterprises, SEEDA highlights how access to finance can help businesses survive the credit crunch.
Downturn-hit South East companies will benefit from Government-backed help provided by SEEDA.
Today’s package of measures offers new ways to help business survive the economic downturn. This will build on successes already achieved such as SEEDA, working with Finance South East, to establish a £3m Bridging Fund. The Bridging Mezzanine Debt Fund (BMDF) makes assistance available to businesses rapidly.
Key elements of the BMDF are:
- Unsecured loan up to £148,000
- Up to one year term, which can be extended on request
- No capital repayments or interest payments until maturity
- Loans can be repaid at any time when other funding becomes available
- No arrangement fees.
These elements ensure that the Fund does not compete with the commercial sector. It is attractive to viable businesses because loans are unsecured and subject to a single interest payment.
Already, funds have been offered to five companies, including Mercator Media of Fareham, Hampshire. A further six companies are currently being considered for loans from the fund.
For media enquiries, please contact:
Roy Sutherwood
Tel: 01483 470 155
Related case study
Mercator Media Ltd
Mercator Media Limited applied to the Bridging Mezzanine Debt Fund as a result of being caught up in the Icelandic banking crisis. Mercator produced a successful edition of the Icelandic Fisheries Exhibition in early October 2008, just as the Icelandic government was forced to nationalize the banks. The result was to tie up an important part of Mercator's working capital.
Mercator Media Limited, based in Fareham, is a B2B media company that publishes business magazines, runs trade exhibitions, events, conferences and websites in the commercial marine sector. Its magazines include Maritime Journal, The Motor Ship, Boating Business and World Fishing, and events such as Seawork, held annually in the Port of Southampton.
Mercator has 43 employees, has Investors in People (IiP) status and has been trading since 1989. The company is profitable and turnover for 2008 was projected to be £4.3m. This is an increase of 40% on the previous years due to a number of acquisitions including The Motor Ship and the Icelandic Fisheries Exhibition. Export earning now account for more than 60% of turnover.
Mercator has an ambitious strategy to develop the business over the period 2009 -11 with the aim of increasing turnover to £10m. This is based on organic growth, selective niche acquisitions and joint ventures. The Board believes prospects are good despite the world economic slowdown and is confident its strong position (eg. market leading B2B brands) will allow it to withstand any further economic turbulence. Increasing diversification across its three main sectors of magazines, events and online will assist in this process.
The Loan
Mercator enquired about the Bridging Mezzanine Debt Fund through Finance South East and a full application was submitted in late November. Some additional information was sought and credit proposal completed indicating the 'credit crunch' issues facing the company and subsequently a £100k funding was approved and loaned in December.
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