SMALL firms funding specialist Merseyside Special Investment Fund (MSIF) is urging digital and creative firms to bid for cash from a £3.6m pot.
Liverpool-based MSIF manages the European-backed Small Loans for Business Fund in Merseyside, and offers loans worth up to £50,000 to the region’s small firms.
MSIF investment manager Chris Walters said this funding was particularly suited to creative and digital firms.
She said: “Half of this funding is targeted at companies who are exploiting innovation and knowledge.
“That includes creative and digital companies.
“It doesn’t have to be completely new intellectual property. It can be already out there, but perhaps being used in new ways.
“This money is here to invest in Merseyside companies and we would like to encourage businesses to come and talk to us. Before we agree to invest, we will need to see that there is a sound business plan in place which will enable them to repay the loan – like any other business, they must prove that they are viable.
“This fund has been set up to help the growth of the economy and our aim is to invest in sustainable businesses which will contribute to this.”
Ms Walters said MSIF was well- placed to step in to help companies that are ready for growth but cannot secure bank funding.
“Creative and digital firms are finding it hard to access funding from banks at the moment, and this fund is specifically designed for those instances where the banks can’t assist,” she said.
“When companies have a product that they’re ready to take to market and have established that there’s a demand – even though income streams may not be immediate – we can look to help. Most other lenders will want to invest in businesses that are already generating cashflow.
“In the past, we have worked with lots of creative and digital companies. There is quite a strong gaming sector locally, for example, and we have assisted lots of companies within this industry.”
MSIF this year gave £50,000 in funding to gaming company Setgo, based in Liverpool’s Baltic Triangle.
The company was founded last year by three former managers from Sony’s Wavertree base and its first game, Castaways, is already being played by thousands of players online through social networks.
Now the company is focusing on selling its Setgo Analytics tool to other developers.
The online gaming market is set to be worth $24bn by 2013 – and Setgo Analytics will allow developers to track the performance of those titles. Managing director Clemens Wangerin said: “It is very difficult for small businesses like ours to raise finance at an early stage and at this level, and a lot of lenders are simply not prepared to invest in this sector.
“MSIF had a very different approach and were supportive from the outset. They really understood the strength of the management team and our vision. Importantly, this meant they believed in our ability to build a successful business in a fast-changing, constantly evolving and very exciting industry.
“Without the support from MSIF, we would have struggled get Setgo off the ground and so, for us, they’ve been a true catalyst to success.”
MSIF also backed LHK Productions, a company set up in 2005 to teach dance and drama classes that has expanded into professional theatre production with backing from MSIF. LHK has produced a pantomime, Cinderella, which will be shown in Wrexham over Christmas. Founder Lee Kelly has also been approached to take the show to the Middle East for a short run.
He said: “Without the money from MSIF, we would not have been able to develop as we have. We have gone from choreographers to producing full shows including scripts, costumes and stage sets.
“In this business, you have to put quite a lot in before you get anything back, and there are dips in cashflow which means it is difficult to raise finance.
“MSIF took the time to understand how the business worked and were extremely supportive from the outset. Their support has made all the difference to us.”