Member Article

North East Firms Urged To Consider Crowdfunding

Accessing credit at an affordable cost is one of the biggest barriers that small businesses across the North East face. Since the 2008 financial crisis, and the subsequent recession there has been a reduction in bank lending, which has held back the economic growth across the region.

Ted Salmon, North East Regional Chairman of the Federation of Small Businesses, believes that this is a massive problem for small companies in the North East.

“Accessing finance is one of the biggest issues that our members across the region are facing. With statistics showing that the banks aren’t lending to small businesses, many are exploring alternative sources of finance to meet their growth ambitions.“

Over the past year, new initiatives such as crowdfunding have started to emerge in the UK with a number of businesses already attracting significant investment. Crowdfunding allows businesses to attract online investment from a number of interested investors who typically each invest only a small amount.

One of the UK’s biggest platforms for crowdfunding is Crowdcube, based in Exeter. They have helped a number of businesses get the investment they need by bypassing traditional sources of finance like the banks.

The FSB and the Enterprise Europe Network team based at Newcastle Science City have invited Darren Westlake, Chief Executive of Crowdcube to speak at a major business finance seminar in Newcastle on 20th September. Westlake will be speaking in the North East for the first time at “Accessing Alternative Sources of Finance” at Newcastle University Business School. He explained how crowdfunding is different.

“Having run businesses before I know how hard it can be to raise finance or attract investment. There’s no doubt that businesses are struggling to access finance from traditional providers like the banks.

“We launched Crowdcube to help businesses across the UK attract investment from a larger pool of investors who invest smaller sums. To date we have helped 21 firms raise £3.7m which has helped them grow the business and expand into bigger markets.“

Alongside crowdfunding, the seminar will highlight other sources of funding for business growth, such as ‘angel’ and venture capital finance.

The conference will also hear from experts at UNW and Ward Hadaway on how businesses can be more investment ready, especially with the introduction of the Government’s Enterprise Investment Schemes, which effectively subsidise private investment into businesses.

Full details of the event are available by contacting Simon Green from Enterprise Europe Network at support@newcastlesciencecity.com.

This was posted in Bdaily's Members' News section by Simon Hanson .