< Previousof Leicester. The area would also be re- landscaped to provide more attractive outdoor space, with improved footpaths, sustainable drainage and places for wildlife to flourish. Student housing remains a common theme for high level investment in the region as well, with Godwin Developments completing the sale of Bendigo Buildings, and PMI Developments submitting plans to Nottingham City Council for a 401- bedroom student building that could reach 16 storeys. completion Bendigo Building development’ to: On completion the Bendigo Buildings development, which is situated in central Nottingham, will comprise 783 beds including of a mix of modern studio apartments, four, five and six-bedroom clusters and accessible studio rooms. It will also provide a range of indoor amenities and landscaped gardens as well as commercial units on the ground floor for residents and the neighbouring community. While the quantity and quality of works being undertaken remains consistent, one aspect that casts a pall on the industry remains that of skilled worker shortages. This is a problem not just in the East Midlands but nationally and represents a growing concern for construction companies. Some projects have stalled as a result, and the matter has gotten so severe that the Mayor of London has called for temporary visas for construction workers – a scheme which is sure to draw some controversy with the country’s views on Brexit. While more can and likely does need to be done closer to home to make people aware of the opportunities in construction – and to fight the stigma of it being an unskilled or low-paying career – the construction sector is not the only one facing this issue. That puts the sector at odds and in competition with other industries also fighting to influence students to pick degrees or courses in those directions. What can and should be done is up for debate, and every governing body, association and university have had their say. Degrees, apprenticeships, specialised schools – there is much to offer in terms of opportunities to study, but the real difficulty seems to be in generating interest in them. It might be time for construction companies to start approaching the next generation directly, either in person or through social media, to try and glam up the industry and make sure there are enough skilled workers to keep all these projects going. East Midlands Business Link www.eastmidlandsbusinesslink.co.uk COMMERCIAL PROPERTY © stock.adobe.com/Duncan 18-20.qxp_Layout 1 04/05/2022 09:26 Page 3www.eastmidlandsbusinesslink.co.uk East Midlands Business Link CORPORATE FINANCE M any financial issues have been heightened in the wake of the pandemic, the effects of which are continuing to be felt even into 2022. These are leading businesses to secure finance to fill the shortfall and take measures such as redundancies to improve cashflow. There are many challenges and potential pitfalls to overcome for businesses now that Government support has ended and the economy is expected to stand back on its own two feet, especially given Sunak’s less than impactful spring statement. One of the biggest threats for many companies is that cashflow is weak as outstanding and uncollected invoices build-up and there’s a halt in the movement of products and services. Since lockdown, many businesses have been more cautious and have made cost saving measures – such as searching for cheaper suppliers or letting go of some suppliers altogether. Elsewhere, companies have lost contracts and longstanding clients as other companies seek to reduce overheads or have been forced to shutter their operations in the wake of the outbreak. On its own, this weaker cashflow would be a major hindrance, but it comes amidst an already established culture of late payments that has pervaded the corporate world for years. A study from the Federation of Small Businesses (FSB) shows that sixty-two per cent of small businesses have been subject to late or frozen payments. Only ten per cent of those firms surveyed have agreed to payment terms with clients, meaning most of this fresh wave of poor practice has not been formally signed-off by creditors or debtors. Indeed, late payments contribute to 50,000 insolvencies every year, costing the economy £2.5 billion. If it was an issue Securing investment Capital is hard to come by in a world where even the banks are struggling, but unpredictable times can offer other, alternate revenues that SMEs might find interesting. 23 Á © stock.adobe.com/vetre 21-23.qxp_Layout 1 04/05/2022 09:57 Page 1 East Midlands Business Link www.eastmidlandsbusinesslink.co.uk CORPORATE FINANCE © stock.adobe.com/Elnur 21-23.qxp_Layout 1 04/05/2022 09:57 Page 2www.eastmidlandsbusinesslink.co.uk East Midlands Business Link CORPORATE FINANCE that businesses were contending with before the outbreak, it’s only been heightened since. However, there are ways in which a company can secure funding to cover the gap in cashflow posed by late invoices. Chief among these is invoice finance. This is the simplest means of releasing cash tied up in a business’s outstanding invoice. It sees a business sell its invoices to a third party who will advance some of the funds it is worth up front for a cut. Thousands of businesses already rely on this kind of financing to maintain a healthy cash position, whilst others use it to take back control of cashflow issues that arise from late and unpaid invoices. Perhaps the biggest draw is that businesses can be paid most of an invoice within forty-eight hours instead of the typical thirty-day period specified on most invoices. Of course, this is far from the only finance solution businesses can draw from. Asset- based finance is a specialised method of providing companies with working capital and term loans that use accounts receivable, inventory, machinery, equipment and real estate as capital – essentially, any loan to a company is secured by one of that company’s assets. This option is commonly used to pay for expenses when there are gaps in a company’s cashflow, but it is also frequently used for start-up financing as well as refinancing existing loans, financing growth, mergers and acquisitions, as well as management buyouts and management buy-ins. Although it’s not suited to meet every business requirement, it can prove useful for those that have stretched their credit limits with vendors and reached lending capacity at the bank. Companies can also take out loans to fill the gap and bolster cashflow, though some companies may already be at their limit with their banks or otherwise don’t meet the requirements for securing loans with traditional lenders. In these situations, companies can turn towards alternative lenders and finance providers. Private equity, for example, is where investors provide long-term equity capital investment in a company in return for either shares, a percentage stake in the business and/or, sometimes, a seat on the board. Although many businesses might be loath to dilute their ownership, private equity does offer a good option of raising capital for businesses that aren’t ready to list on the stock exchange. Another form of private finance is an angel investor – 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. This might be of particular interest given that the stock market has been unpredictable since Russia declared war on Ukraine, leaving many investors looking for avenues to invest their money. 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. Ultimately, it comes down to the persuasiveness of business leaders and the profitability of a company. Though no one wishes to consider it, if a company is in a weak position and is not attractive to investors, equity groups or the bank for a loan, then it might be time to take a good look at the fundamental values and viability of the business itself and see whether it is something worth keeping afloat, or if there might be more difficult conversations that need to be had. 21-23.qxp_Layout 1 04/05/2022 09:57 Page 3 East Midlands Business Link www.eastmidlandsbusinesslink.co.uk TAX Managing energy price hikes, more than hot air in the Boardroom? James Pinchbeck, partner at Streets Chartered Accountants, considers the effect of energy price hikes on businesses and what can be done to manage the situation. W hilst the Spring invariably brings warmer weather and lighter days, this year it is unlikely to help businesses weather the storm of unprecedented price hikes in the cost of energy. According to a recent Policy Voice Survey by the Institute of Directors, over 53% of its members surveyed indicated that the cost of energy was and continues to exert a negative impact on their organisation. The energy price hikes have come at a time when there seems to have been a perfect storm with Brexit and the pandemic leading to unprecedented disruption to businesses, with rising costs particularly as a result of labour shortages and supply chain issues and in many cases a lockdown loss of revenue. Whilst some may have been able to pass on such cost increases, for many this has not been the case having to absorb them with a loss of margin. Businesses are no doubt feeling a bit weather beaten with what seems the exponential increases in energy yet another disruption or problem that is adding to the domino effect of challenges faced. The average household is likely to face an increase in their annual energy bill of around £700 in light of the 54% increase in prices. When it comes to businesses, the annual bills for the average small business will increase from £1,150 to £1,725 and for the average medium sized business from £1,860 to £2,864. Many businesses though, depending on what they do, for example those engaged in manufacturing or processing, are set to see in real terms much larger bills. Whilst the first approach to dealing with the situation may be to see if you can seek a cheaper supplier, this is unlikely, given the state of the market, to yield results. For those on contract with their energy supplier, whilst their current deal may be favourable, they should prepare for hikes on renewal. Managing the situation really needs a more strategic approach, starting with an in depth understanding, even audit of your energy consumption. Such information can then be used to determine steps and approaches to reducing consumption and becoming more energy efficient. This may include greater use of more energy efficient equipment, changes in staff attitudes and approaches and working practices through to installing new energy generation technology. Quick and simple short-term measures, though, may not achieve the results required, not least in terms of achieving security or certainty around the supply and cost of your energy. You may then look to capitalise on the tax reliefs included in the Spring Statement and prior Budgets to support those looking at investing in green technologies and alternative energy sources. Those looking to install heat pumps, solar panels or wind turbines can benefit from a removal of the 5% VAT levy on the cost of such installations. The government is introducing targeted business rates exemptions for eligible plant and machinery used in onsite renewable energy generation and storage and a 100% relief for eligible low-carbon heat networks with their own rates bill. It was announced in the Spring Statement that these measures will now take effect from April 2022, a year earlier than previously planned. Businesses investing or incurring expenditure in energy saving or environmentally beneficial technologies can look to benefit from the enhanced capital allowances. The extension to the temporary increase in the Annual Investment Allowance (AIA) to 31 March 2023 allows 100% tax relief to businesses investing up to £1 million in qualifying expenditure. Help may also be available from your energy company with many offering schemes or grants to help improve business energy efficiency, which can reduce costs; for example, subsidies on the upfront costs for more energy- efficient equipment. The cost of investing in new technologies could also be financed, with some funders and banks like Natwest offering ‘Green Loans’ and ‘Green Asset Finance’. Finally, food for thought, perhaps the increase in energy prices may see more and more of those who have either opted for hybrid or home working return to their employer’s place of work as they seek to manage their domestic bills. 24-25.qxp_Layout 1 04/05/2022 09:59 Page 124-25.qxp_Layout 1 04/05/2022 09:59 Page 2 East Midlands Business Link www.eastmidlandsbusinesslink.co.uk RELOCATION AND INWARD INVESTMENT T he East Midlands presents an attractive opportunity for inward investment and relocation. It offers superb connectivity, sitting at the heart of the UK with strong road infrastructure and rail links as well as airports in easy reach. A growing East Midlands A region with a lot to offer, the East Midlands continues to become more attractive to investors and businesses as significant projects get underway. The ever-evolving reputation for logistics and distribution, then, is understandable, and comes alongside a long industrial and engineering heritage, leading rail and space clusters in Derby and Leicester, and expanding fintech and life science sectors in Nottingham. A highly innovative region, it is already home to giants from Rolls-Royce to Alstom, in addition to SMEs, and provides access to a well-established talent pipeline and outstanding universities. Meanwhile Derbyshire has recently been highlighted as the area to watch for investment, with 26-29.qxp_Layout 1 04/05/2022 10:00 Page 1www.eastmidlandsbusinesslink.co.uk East Midlands Business Link RELOCATION AND INWARD INVESTMENT © stock.adobe.com/Paulrommer creating 450 jobs, the first occupiers on the new site. Councillor Chris Poulter, leader of Derby City Council, said: “This really is very exciting news for Derby. HelloFresh is a huge name, and choosing our city as their new home is testament to our strong reputation for innovation and manufacturing – Derby has a lot to offer!” Meanwhile a plethora of regeneration projects have brought, and continue to lure, investors and businesses to the area. Derby’s Becketwell regeneration project for example, revitalising a 1.9 ha brownfield site in the city over a 10-year period, will see office, retail and hotel space created, alongside new homes and a 3,500-capacity venue. Leeds-based St James Securities have been working on the Becketwell regeneration scheme since 2017 and have received awards for investing in a site that had failed on numerous occasions. Their work has provided a platform to encourage significant investment to Becketwell and the wider city centre. This includes Grainger, the UK’s largest listed provider of private rental homes, which is fully funding, acquiring and operating the £37.375m Build to Rent (BTR) scheme at Becketwell; Derby City Council which has assisted with land assembly for the development and will be acquiring the performance venue; ASM Global, the venue management and services company, which will be operating the venue on a 30-year lease; while Peveril Securities, which specialises in investment and development both in a sole capacity and in joint ventures, was announced earlier this year as development partners for upcoming phases of the scheme, bringing significant financial weight. This announcement is expected to provide confidence for further new investment in 28 Á its strategy for drawing overseas investment to the county named as one of the best in Europe in rankings compiled by the Financial Times. It follows the launch of a new Derbyshire Investment Prospectus, showcasing 23 projects that will help lead the county’s regeneration, listing over £1bn of opportunities across Derbyshire. Derbyshire is set to become even more enticing to businesses and investors over the coming years with myriad developments underway. A key boon came when SmartParc chose to invest in a high-tech, 155-acre food manufacturing and distribution campus in Derby, as part of plans to diversify the city’s economy, which will create up to 5,000 jobs. Home to a Food Manufacturing Technology Centre of Excellence, the development (SmartParc SEGRO Spondon) is already attracting further businesses to the region with HelloFresh committed to opening a new distribution centre at the scheme, 26-29.qxp_Layout 1 04/05/2022 10:00 Page 2 East Midlands Business Link www.eastmidlandsbusinesslink.co.uk RELOCATION AND INWARD INVESTMENT surrounding areas of the city centre. Impacting the wider East Midlands, what has been hailed as the biggest development opportunity in the region is making progress and offering strong, long-term opportunities for investors, with Areli Developments, the team behind the redevelopment of high-profile regeneration projects including Gunwharf Quays in Portsmouth and London’s Battersea Power Station, becoming commercial partner for three huge sites being promoted by the East Midlands Development Company, a public-private partnership backed by a consortium of local authorities and government. Hundreds of hectares of land around East Midlands Airport, Ratcliffe-on-Soar Power Station and the Toton-Chetwynd corridor will be developed to create a new innovation campus, major residential development, large-scale demonstrators aimed at taking net zero technologies to market-ready status, and supporting infrastructure. Each site is the size of London’s Olympic Park, and it is hoped that they will collectively generate 84,000 jobs and add more than £4bn to the output of the East Midlands economy in the decades ahead. Some of the sites sit within the boundary of the proposed East Midlands Freeport, a key scheme drawing investment and businesses to the region. Plans to establish the UK’s only inland Freeport recently took a big leap forward with the submission of the ‘Full Business Case’ (FBC) to government, keeping the East Midlands Freeport on track to become fully operational later this year. Government approval will unlock the complete range of benefits offered by the Freeport, adding to the special incentives already available to eligible businesses investing in the Freeport’s Tax Sites. The blueprint sets out plans to make sure that the Freeport is fully equipped to achieve its objectives, including promoting growth in advanced manufacturing and logistics, low carbon and renewable energy production and research and development, as well as supporting the government’s Levelling Up, Net Zero, skills and innovation and trade and investment objectives. This will allow the Freeport to create an estimated 61,000 new jobs and generate £8.9bn for the economy over the next 30 years. Penny Coates, chair of the East Midlands Freeport Board, said: “The submission of the Full Business Case to government demonstrates our continued progress in building the UK’s only inland and best- connected Freeport. The designation of our Tax Sites in March means the Freeport is already offering real benefits to attract new investment to the East Midlands. Approval of the FBC will enable us to deliver even more benefits, both for businesses and communities across the region.” Scott Knowles, East Midlands Chamber Chief Executive, said of the Freeport: “This free trade zone, which will have a focus on innovation, low carbon and trade, signals the direction of travel for the East Midlands economy – giving © stock.adobe.com/ Ian 26-29.qxp_Layout 1 04/05/2022 10:00 Page 3www.eastmidlandsbusinesslink.co.uk East Midlands Business Link RELOCATION AND INWARD INVESTMENT World-renowned Loughborough University provides a Science and Enterprise Park and knowledge transfer opportunities I million sq ft of laboratory and office space at Charnwood Campus Enterprise Zone status for two major sites Situated on the M1 motorway , mainline railway and on the doorstep of East Midlands Airport Centrally located between Leicester, Nottingham and Derby Strong business support networks Fantastic quality of life in Charnwood FIND OUT MORE: Call 01509 634534 Email Christopher.Grace@charnwood.gov.uk Charnwood - a dynamic location for your business. www.incharnwood.com investors something tangible to back in order to deliver the inward investment and jobs that will enable growth. We’ve already been notified about interest from companies both inside and outside our region that may want to locate themselves at the Freeport in order to take advantage of tax breaks at sites including East Midlands Airport.” With so much progress in the region, it is no surprise that businesses are choosing the East Midlands to locate and expand their operations. The government has too been attracted to the region, with a new regional Ministry of Justice (MoJ) office set for Nottingham as part of the government’s commitment to move 22,000 civil service positions out of London and the South East by 2030, through the ‘Places for Growth’ programme. This comes after HMRC took on a 10-storey office block in Nottingham, to house over 4,000 staff, for which construction completed in 2021. © stock.adobe.com/denisismagilov 26-29.qxp_Layout 1 04/05/2022 10:00 Page 4Next >