Creative Industry Finance guidance booklet

Creative Industry Finance: Guidance for Applicants

CREATIVE INDUSTRY FINANCE: GUIDANCE FOR APPLICANTS

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Creative Industry Finance: Guidance for Applicants

CONTENTS About the programme ............................................................................................................................ 2 What is Creative Industry Finance? .................................................................................................... 2 Our aims .............................................................................................................................................. 2 What is involved? ................................................................................................................................ 2 Who is the programme aimed at? ...................................................................................................... 3 Where does the programme operate? ............................................................................................... 3 Who runs this programme? ................................................................................................................ 3 How can I contact Creative Industry Finance ..................................................................................... 4 The Creative Industry Finance process ................................................................................................... 5 Your Application...................................................................................................................................... 6 Eligibility criteria ................................................................................................................................. 6 Types of business we can support ...................................................................................................... 6 Businesses we cannot support............................................................................................................ 7 What evidence do I need to supply? .................................................................................................. 7 Is there a deadline?............................................................................................................................. 8 What are the most common reasons why an application to the Creative Industry Finance programme doesn’t get through? ...................................................................................................... 8 Is there help prior to submitting an application? ............................................................................... 9 I have a specific question .................................................................................................................... 9 Creative Industry Finance Business Advice & Support ......................................................................... 10 What kind of advice is available? ...................................................................................................... 10 Who are the Business Advisors? ....................................................................................................... 10 Will I have to travel? ......................................................................................................................... 14 Can I skip the business support and just apply for a loan? ............................................................... 14 Are there any costs involved for the Business Advice? .................................................................... 14 Accessing Finance ................................................................................................................................. 15 What kinds of loans are available? ................................................................................................... 15 Who are the lending partners? ......................................................................................................... 15 When do I have to pay the money back? ......................................................................................... 18 What can I use the loan for? ............................................................................................................. 18 What are the interest rates?............................................................................................................. 18 Does Creative United make any charge for the services it provides? .............................................. 18 Glossary ................................................................................................................................................. 19 Index...................................................................................................................................................... 22

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Creative Industry Finance: Guidance for Applicants

ABOUT THE PROGRAMME WHAT IS CREATIVE INDUSTRY FINANCE? Creative Industry Finance is a programme designed to assist creative and cultural enterprises in securing the finance and investment they need to successfully develop and grow into sustainable businesses. These enterprises could be micro, small or medium size businesses, large companies or organisations, sole traders and artist practitioners, social enterprises or charities.

The programme offers tailored business advice with a focus on supporting businesses through the process of applying to one of our lending partners for a business development loan.

During our two year pilot programme, we supported more than 400 creative enterprises with over 1900 hours of free one-to-one business support, and provided £876,000 in loan finance. We also helped lever a further £540,000 in loan finance from alternative sources.

OUR AIMS The aims of the programme are to:  enable business growth and support talent development by providing access to finance for micro, small and medium scale enterprises, and for larger organisations that may have previously received grant funding, operating within the cultural and creative industries  improve the business skills and commercial experience of these businesses  improve their financial profile and lending history  provide a national evidence base for the demand and effectiveness of loan finance as an alternative to grant funding for commercially viable cultural and creative industry enterprises  establish a network of highly experienced business advisors that will work with us to create a pipeline of high quality, viable business proposals for referral to our lending partners  with our lending partners, significantly increase the number of creative enterprises successfully accessing debt finance to enable growth and talent development across the sector WHAT IS INVOLVED? After checking your eligibility for the programme, you can then apply via our online application form - http://www.creativeindustryfinance.org.uk/apply. Please note that you will be asked to register your details first, so that a user account can be set up for you. This will allow you to save and return to edit your application at any time prior to submission.

The business lending team here at Creative United will be responsible for the initial assessment and support of applications. These will be assessed within 5-10 working days. Assessment is based on how your business is developing currently, the quality of the creative content being produced within your business, and its potential for you and your enterprise to benefit from the programme. Those

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Creative Industry Finance: Guidance for Applicants that meet the criteria will be matched with a suitable business advisor, taking account your creative sector and (where possible) location.

Business advisors will be encouraged to arrange at least one face to face meeting with each client, ideally at an early stage in the process. For practical reasons, it is envisaged that the majority of client contact will be undertaken by telephone or Skype. You can expect to receive up to 12 hours of business development support with your advisor before being referred to one of our lending partners.

WHO IS THE PROGRAMME AIMED AT? Creative Industry Finance is open to a wide range of creative and cultural enterprises, from microbusinesses through to major institutions. We welcome applications from charities and social enterprises, as well as commercial businesses.

You can find out about some of the businesses Creative Industry Finance supported in its pilot phase here.

We are happy to consider applications from sole traders and individual artists, as well as from limited companies, partnerships and not-for-profits. Any model is acceptable as long as you are able to demonstrate that the production of new, creative content is at the heart of what you do.

The programme is not aimed at very early stage or start-up businesses, so you will need to demonstrate that you have been trading for at least eighteen months. You do not need to be a registered business in order to apply.

WHERE DOES THE PROGRAMME OPERATE? The programme is available to all creative businesses registered and based in England. This is because the business advice element of the programme is funded through out grant from Arts Council England, which only covers activity that is based in England.

Unfortunately at the moment we are unable to support enterprises based outside of England.

WHO RUNS THIS PROGRAMME? Creative Industry Finance is delivered by Creative United, a Community Interest Company, with National Lottery award funding from Arts Council England. You can find out more about Creative United and the other programmes we run on our website www.creativeunited.org.uk.

The programme is delivered in partnership with a specially selected group of lenders and our network of business advisors. See page 15 for more information on our Lending Partners, and page 10 for more information about our Business Advisors.

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Creative Industry Finance: Guidance for Applicants

HOW CAN I CONTACT CREATIVE INDUSTRY FINANCE You can contact us:    

via email info@creativeindustryfinance.org.uk over the phone 020 7759 1114 on Facebook FB/CreativeIndustryFinance or Twitter @CIFinance by post: Creative United, New Wing, Somerset House, Strand, London, WC2R 1LA

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Creative Industry Finance: Guidance for Applicants

THE CREATIVE INDUSTRY FINANCE PROCESS Register online to start your Creative Industry Finance (CIF) application.

PROGRAMME APPLICATOIN STAGE

Complete and submit your CIF application.

CIF application is assessed in-house

by Creative United’s business lending team.

More documentation is requested from business, e.g. financials, more information for business plan etc.

Application is accepted onto the programme and business is matched with a Business Advisor.

Business is not accepted onto the programme at this time.

Business is signposted to other areas of support.

Business receives up to 12 hours business advice.

1:1 ADVICE STAGE

Business is ‘investment ready’ and progresses to application to one of CIF’s Lending partners.

Document pack is prepared for loan application.

LENDER STAGE

Business is referred to a Lender and makes loan application.

Business is not yet ‘investment ready’ OR decides not to make a loan application.

Loan application to Lender is unsuccessful.

CIF advises on another Lender where relevant.

End of Creative Industry Finance programme. Exit questionnaire for evaluation sent to business. Post loan support offered by Creative United.

Loan is agreed and drawn down by business.

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Creative Industry Finance: Guidance for Applicants

YOUR APPLICATION ELIGIBILITY CRITERIA In order to be eligible, applicants must meet the following criteria:   

Minimum 18 months trading history Registered/operating in England Business activity falls within one or more of these creative sectors: o Architecture o Crafts o games (e.g video gaming and app development) o fashion o festivals and events (that directly involve or support artists or other creative industry enterprises) o design o digital media and web (e.g. creative software development, digital media, web design) o film, TV and radio (e.g. documentary film, television production, film making) o music (e.g. record labels, promoters, publishers, musicians) o performing arts (e.g. dance, drama, theatre production, promotion and development) o publishing and literature o visual arts and photography

In addition, businesses must be able to demonstrate that they have:   

Clearly identified business development objectives Existing revenues A commitment to exploring debt finance as strategy for achieving growth and development within the business

TYPES OF BUSINESS WE CAN SUPPORT We are able to accept all kinds of business or organisation onto the Creative Industry Finance programme, as long as you meet the basic eligibility criteria and your application passes our in-house assessment. Supported business types include:        

Registered Charities Community Interest Companies Limited Partnerships Collectives Sole Traders Partnerships Limited Companies Social Enterprises

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Creative Industry Finance: Guidance for Applicants

BUSINESSES WE CANNOT SUPPORT Creative Industry Finance recognises the huge array of creative work happening across different sectors. However we regret that we are not able to provide support to the following types of business:   

Auction houses and antiques based businesses Advertising, Public Relations, Consultancy and Marketing agencies Businesses providing non-creative services to the creative industries (e.g. webhosting, space hire)

Please get in touch if you are unsure. We will always endeavour to signpost you to relevant, alternative support.

WHAT EVIDENCE DO I NEED TO SUPPLY? In addition to the eligibility criteria, we will assess each application against the following three criteria: 1. Strength of existing business    

Number of years trading (minimum 18 months) Tangible milestones already achieved within the business, such as strength of existing customer/client base Quality of creative product/service offered as evidenced by customer testimonials, press coverage, industry awards or other supporting material Credibility, skills and experience of key personnel in the business

2. Investment need   

The growth/business development opportunity that has been identified The amount of finance required The purpose of the finance (what it will be used for)

3. Impact of investment     

Market opportunity and competitor analysis detailed within the plan Cashflow forecasts set out projected increases in sales revenues over given period Forecasts show proposed repayment plan for investment received Job creation opportunities detailed (if relevant) Increased social impact (if relevant)

In order to assess your application the following documents are required: 

A business plan that should include some or all of the following – o Executive summary o Mission statement o Business description o SWOT analysis o Industry background

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Creative Industry Finance: Guidance for Applicants o o o o o o o O

Competitor analysis Market analysis Marketing and Sales strategies Management summary Funding requirements Financial plan Last year’s financial statements Projections for current year

IS THERE A DEADLINE? No - there is no deadline for applying to Creative Industry Finance.

WHAT ARE THE MOST COMMON REASONS WHY AN APPLICATION TO THE CREATIVE INDUSTRY FINANCE PROGRAMME DOESN’T GET THROUGH?  Business plan document not attached or not sufficient We don’t need to see a fully completed business plan. We understand that often the business will benefit from working with one of our business advisors in order to strengthen or finesse the document to present it to a potential lender. However, we do need to see a document including an executive summary, a description of the current business and who the management team is, plans for future development and the proposed steps to achieve this, an analysis of its market or audience, and maybe an outline of competitors. All this will help us place the business with the advisor which will best suit its needs.  Not generating realistic level of turnover that would be consistent with making loan repayments The Creative Industry Finance programme is here to support creative enterprises which feel they are in a position where borrowing money would enable them to grow their business, be it by expansion, generating new revenue streams, export, working capital or equipment purchase etc. In order to get involved in the programme of business support to prepare for progression to one of our lending partners, a business or organisations must in the first instance be confident that their turnover – the total amount of their monies coming in – is sufficient to enable repaying a loan.

Should we feel that your current turnover, and the information you provide in your cash flow, is below a threshold that could reasonably sustain loan repayments it could be that other forms of funding and support would be better for you – such as grant or crowd funding.  Have been trading for less than 18 months, or insufficient trading history provided We are here to support established businesses, rather than early stage or start-up businesses. To this end we will be looking for at least 18 months’ worth of trading history or significant activity.

If your business is under 2 years old you might be eligible for a start-up loan.

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Creative Industry Finance: Guidance for Applicants  Insufficient financial information provided Following on from the reason described above, businesses need to ensure they clearly detail their income and expenditure – e.g. broken down into sales and cost of sales – and also how the input of cash investment from a loan would affect their projected cash flow over the coming year.  Creative work is not a significant part of the business As our programme is designed to support those operating in a creative sector, we ask that businesses or organisations describe how creativity, or the creation of artistic or cultural work, is integral to their business.

Examples of this could be that your business is involved in: o Producing and/or touring performing arts or theatre o Developing, recording, writing, producing, commissioning or promoting music and musicians o Using digital design or technology to produce new games, animation, TV, film etc. o Designing and/or making fashion, crafts, furniture etc. o Producing events featuring creative practitioners, artists, musicians etc. o Making content for film, television or radio o Creating, commissioning or displaying visual art or photography o Building or public space design o Traditional or digital publishing of contemporary writers Of course, the creative aspect or your business doesn’t need to be limited to the examples listed here, and the application form gives you the opportunity to describe how creativity is at the heart of your business.

IS THERE HELP PRIOR TO SUBMITTING AN APPLICATION? Yes. You can call or email (see details below), and we can provide over the phone support.

We also organise friendly and informative workshops covering topics such as business plan writing, and understanding debt finance and risk. See our website for details.

I HAVE A SPECIFIC QUESTION If in doubt, give us a call on 0207 759 1114 or email info@creativeindustryfinance.org.uk.

We are happy to discuss your application, including signposting you to a relevant alternative means of support if your business is not the right fit for this programme.

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Creative Industry Finance: Guidance for Applicants

CREATIVE INDUSTRY FINANCE BUSINESS ADVICE & SUPPORT WHAT KIND OF ADVICE IS AVAILABLE? Our business advice is funded by Arts Council England, and is offered free of charge to businesses on the programme. Our focus is on assisting the business to access debt finance from one of our lending partners, on the most favourable terms available to the borrower.

Our commitment to the client is to support them through the following process:    

Identifying their business needs and opportunities Articulating their business plans and financial forecasts Understanding the available finance options Preparing for referral to one of our lending partners

WHO ARE THE BUSINESS ADVISORS? Our network of business advisors are recruited from across the creative sectors, and all have experience of either providing business advice, running their own business, heading up an organisation, attaining business advice professional qualifications…or all of the above.

They are: Abigail Branagan Abigail is a SFEDI accredited business advisor and project manager who has been working in the cultural and creative sector for over 18 years. Based in Bath, she specialises in providing professional development support for designer-maker businesses. She also manages a portfolio of freelance projects working with a range of national arts organisations including the Crafts Council, Arts Council England and Cockpit Arts.

Andrew Riley Andrew is a business consultant, adviser and trainer with 20 years’ experience of supporting businesses of all sizes including start-ups. He has also been involved in a number of enterprises as owner or Director including a small creative clothing and jewellery retailer. He was part of the team responsible for putting in place the ‘Creative City’ and ‘Brilliantly Birmingham’ programmes and later ‘Creative West Midlands’. He has worked with Creative organisations as diverse as visual art, dance, digital, theatre, jewellery designer makers, music, fabrics and fashion and museums & galleries.

Andrew helps businesses match their creative talents with business management skills to help them develop a viable, sustainable business.

Andy Balman Andy has over 30 years of working within the visual arts and music industries. He has experience of working within various business models from commercial to not-for-profit and has sat on various boards and committees. He splits his time between Northumberland, where he lives and runs a commercial art gallery, and Hull where he runs a live music venue, a multi-disciplinary venue, pub and ticket agency.

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Creative Industry Finance: Guidance for Applicants Anne Tye For the past 13 years, Anne has been a Business Support Officer for Creative Industries with a local authority in the North East of England. Prior to that she worked with her studio glassmaker husband in the business they set up and ran together. She has also been a volunteer mentor working with several North East Universities and is passionate about helping creativity to be recognised and sustainable.

Bernie Morgan Bernie Morgan is an experienced business advisor specialising in early stage and growing businesses.

She is an accomplished innovator and developer who likes to find creative solutions to business problems. She is a small business owner herself and knows only too well the problems businesses face every day. Prior to this, she was, for eight years, the Chief Executive of the Community Development Finance Association which led the creation of the CDFI industry in the UK. Chris Spurgeon Chris is a Chartered Accountant who has spent all of his working life in the creative sector, holding senior management positions in the UK film and television industry – FD of Chrysalis Television and then FilmFour Ltd - and for the last twelve years acting as a portfolio FD and business and commercial adviser. He is based in London and works with a wide range of businesses from independent production and distribution companies through to larger arts organisations and industry bodies such as the BFI and Creative England. His aim is to help creatively led businesses be commercially successful and sustainable.

Damian Baetens Damian has worked for 20 years within the creative industries and started running his own music management company and signed acts to EMI and Sony BMG. He was Business Support Director at an ERDF project for 3 years and has since financed and supported wider creative businesses through his work at Transmit Start Ups. His specialist knowledge is in the music industry, but he has also worked with content developers in other sectors - film / games / digital - as a consultant and mentor.

Gill Thewlis Gill is an executive and business coach, based in Sheffield. Since 2003 she has worked with over 150 creative and digital organisations, with particular expertise in fashion & textiles, visual arts, theatre, dance, and design. Prior to this Gill had a 20 year career in banking - 15 of which were in the City of London: 10 as a commercial banker, 10 as strategist, marketer, corporate communicator and change manager. She the completed a degree in Fashion Design in 2003.

Graham Niven Graham is a funding specialist based in Greater Manchester with over 30 years’ experience across multiple industries. In recent years he has been helping businesses in the Digital and Creative sector find the most appropriate sources of funding for their particular requirements. He has the ability to work with all sizes of business, gaining people’s trust and support and so help to deliver real results.

James West James is an expert at bridging the gap between creativity and business growth. He has supported over 50 London based creative businesses, sits on several boards and is a member of the Chartered Institute of Marketing. A successful business owner himself, working with clients including the Royal Opera House, The Pleasance Theatre Trust and Hoxton Hall, James understands first-hand the challenges facing today’s entrepreneurs. A specialist in theatre, events and experiential marketing, James is also well-versed in coaching a variety of early stage and growing businesses.

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Creative Industry Finance: Guidance for Applicants

Jason Ojukwu Jason is a London-based business advisor, with practical experience in aiding creative entrepreneurs in sourcing grants, loans and financing options. He specialises in identifying intellectual property capital, licensing and simplifying financial management for creative individuals from the digital media & online gaming sectors. Aside, from directly advising creative entrepreneurs Jason has provided strategic enterprise support to the University of East London, London South Bank University and the Royal British Legion.

Jeff Gilbert Jeff has been advising for nearly 10 years and has considerable experience across many creative sectors including music, fashion, film, performing arts, publishing and visual arts. Jeff brings a heuristic approach to business advice by listening to the client’s assessment of their business history and its current requirements, pinpointing the specifics that need addressing, and then developing strategies that will help grow the business. His specialism is in music, where he worked and ran major corporations including Director positions at CBS/Sony and BMG. He also sold his own recording company to RCA Records and his publishing company to Sony.

Joan Louw Joan Louw trained as a chartered accountant with Deloitte Haskin and Sells in Cape Town. She is a member of the Institute of Chartered Accountants of England and Wales and a member of the Institute of Directors. Joan's wide professional experience includes supporting businesses of all sizes to prepare for investment and access appropriate funding to finance their growth. Joan has a long standing interest in the performing arts and in developing creative and cultural organisations. She is also a Growth Manager working with the Access to Finance strand of the government-backed Growth Accelerator service.

Julia Payne Julia has over 20 years’ experience in music and the wider cultural sector, initially earning her stripes at venues including London’s Barbican Centre. In 2002 she co-founded the hub, a music ‘think and do tank’ that subsidises its own creative projects via consultancy and training, and heads up its Joining the Dots programme that’s testing potentially ‘game-changing’ business models in independent music. She’s helped more than 100 creative entrepreneurs and organisations across the UK develop plans/strategies that work for them as well as investors/funders, and finds working with people interested ‘good growth’ particularly inspiring.

Nigel Rust Nigel mentors and coaches small businesses, mainly in the creative industries. He specialises in designer-makers in sectors such as: fashion; jewellery; textiles; illustration; ceramics; interior products etc. Based in London, he has been advising small businesses since 2005. Having trained as an engineer, he worked in production/ manufacturing for 26 years in a variety of roles such as production management, sales and marketing, and general management, including running his own small business, before applying his experience to supporting developing creative businesses. Nigel is a Specialist Advisor with Fashion Enter and an Associate of Cockpit Arts.

Paul Creavin Paul is a SFEDI accredited (Gold Standard) Business Counsellor and based in East London for the past 14 years. He supports entrepreneurs at all development stages across a sector diverse client portfolio. Drawing upon a banking and finance background, coupled with extensive business counselling experience, Paul can bring the perspectives of both borrower and lender to the table when helping business owners to develop business plans and funding applications. Employing an

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Creative Industry Finance: Guidance for Applicants analytical and diagnostic approach to understanding the needs of the business and its owner, Paul helps clients to identify the resources and actions required to achieve their objectives. Preparing the business to present to potential fund providers is one of his specialist areas.

Pete Schonbeck Pete has been working in the creative industries for almost 30 years and has covered senior roles in design and product merchandising, creating true head to toe lifestyle product offers. He has worked with leading industry companies and brands including Timberland, Levi Strauss Dockers, Tommy Hilfiger, and J Barbour and Sons. Pete can help in building clearly structured product plans for both wholesale and retail, and is commercially and culturally aware of national and the majority of international markets. He is able to work with clients to aid them in refining their business plans and initial cashflow forecasting, whilst tapping in to the extensive ELSBC clients network.

Remi Harris Remi Harris has 15-years’ experience in the music industry as a senior manager, mentor and business adviser and is qualified with an MBA and a certificate in Business Mentoring. She has secured more than a million pounds of grants and loans for her clients. She also has some knowledge of digital, design, TV and film. She is author of the book: Easy Money? The Definitive Guide to Funding Music Projects in the UK (2013). Remi is based in London.

Sarah Thelwall Sarah Thelwall is a business strategist who acts as a bridge between the creative and finance communities. She works with both product and service based businesses and whilst she has experience of most sectors she specialises in fashion, design, craft and visual art. Sarah works with creatives to connect their business goals to appropriate financing methods, business structures and production approaches, and in the non-profit arena she focusses on income diversification strategies. Sarah has designed an MA in the history and business of the contemporary art market (accredited by Warwick University); set up and runs MyCake, as well as the Culture Benchmark.

Sian Alexander Sian is an independent consultant in the arts sector. From 2012 – 2014 she was Executive Director of the Bush Theatre. She was Associate Director, Theatre for Julie's Bicycle from 2010 - 2013 and Evaluator for the World Stages London Project from 2010 to 2012. Sian was Head of Theatre for Arts Council England, London for ten years until February 2010. Prior to joining the Arts Council she worked for a range of performing arts companies, producing and touring theatre and contemporary dance throughout the UK and overseas. Sian is a CLP/PCT accredited coach and action learning facilitator and an active mentor within the arts.

Stuart Balmer Stuart has been working within the creative sector for more than 20 years running his own fashion label. He is proficient in formulating business plans, marketing plans, financial plans and cash flow forecasts relevant to all business, but has specialist knowledge of most aspects of the fashion industry including branding, range planning and production planning. Stuart also trained as a designer and understands fully the nuances, idiosyncrasies and pressures of running a creative business. He now enjoys passing on this experience as a freelance businesses advisor to growing portfolio of creative businesses.

Tracey Johnson Tracey Johnson is a creative and digital industries specialist with a broad knowledge and experience base across the different sectors based in Yorkshire. She supports businesses to start and grow and

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Creative Industry Finance: Guidance for Applicants helps to create the environments and programmes that can accelerate their success. She co-founded MADE NORTH, a project to promote and support design and craft from the north of England.

WILL I HAVE TO TRAVEL? Our network of business advisors are located across England and we will try our best to match businesses with an advisor in their region. Due to the geographical spread we are also able to offer telephone or Skype meetings in addition to face-to-face meetings.

CAN I SKIP THE BUSINESS SUPPORT AND JUST APPLY FOR A LOAN? The business support and the loan finance elements of the programme are very closely linked. A business which is very established and has a specific finance need may require less support than a relatively new enterprise, and would be fast-tracked to support that is specific to their investment readiness. However, we expect all businesses to receive a minimum of 3 hours support prior to being put forward to one of our lending partners.

ARE THERE ANY COSTS INVOLVED FOR THE BUSINESS ADVICE? The business support package offered under the Creative Industry Finance programme is free of charge to your business. However, you will be required to cover the costs of travel to attend meetings with a business advisor, as well as any printing/copying costs associated with preparing and presenting your business plan.

Creative United does take a small commission or fee, but only once a loan has been drawn down.

See section ‘Does Creative United make any charge for the services it provides?’ on page 18 for more information about this.

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Creative Industry Finance: Guidance for Applicants

ACCESSING FINANCE WHAT KINDS OF LOANS ARE AVAILABLE? Our lending partners are able to consider applications for loans from as little as £2,500 up to £15m+.

The type of lending available to a business will be dependent on a number of factors, including the legal status of the enterprise and the purpose that funds are required for.

As an overview, our Lenders offer following options:  Secured or unsecured  Interest rates from as little as 4% for Social Enterprises  Typical interest rates are 9% - 15%  Some interest rates maybe be higher depending on if the borrower has been declined by their bank, the loan is unsecured or there are questions around credit history or previous CCJs  Repayment periods typically 3 – 7 years, although with large loans this could be up to 25 years Each business will be advised at an early stage in the process what lending options are open to them, including indicative interest rates based on the terms typically offered by our lending partners.

WHO ARE THE LENDING PARTNERS? Creative United is working with an initial group of 8 lending partners on the Creative Industry Finance programme. These are:

Big Issue Invest is the social investment arm of The Big Issue and one of the UK’s leading providers of finance to social enterprises, charities and businesses that are socially driven and helping to tackle poverty and inequality. They have experience of working with creative industry organisations and can provide finance ranging from unsecured loans to equity like investment - to purchase or refurbish a property, purchase capital assets, or for working capital.

They’ve invested more than £20 million in over 170 organisations to improve the quality of life in Britain’s poorest communities, benefiting over 1.7 million individuals, sustained 3,200 in employment, and trained over 14,000 people. www.bigissueinvest.com

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Creative Industry Finance: Guidance for Applicants

Community Development Financial Institutions (CDFIs) lend to businesses and people unable to get finance from high street banks. They provide fair, responsible credit, as well as support, to help businesses start-up, survive and grow. Loans of up to £2m are available from CDFIs, which operate throughout the country. The Community Development Finance Association (CDFA) is the trade body for CDFIs and provides details of which CDFIs operate in your area. www.cdfa.org.uk

The London Small Business Centre is a London based non-profit businesses support agency committed to supporting new start-ups and existing small businesses grow and develop in London’s 33 boroughs. It was established in 1978 to help entrepreneurs reach their full potential through their comprehensive business support services including; training courses, face-to-face business advice and business loans. As the London delivery partner of the Creative Industry Finance programme’s pilot scheme, they have administered a total of £682,000 in creative industry loans to London based creative small businesses. www.smallbusinesscentre.org.uk

Fredericks is a charity providing start-up business and business growth loans to entrepreneurs who struggle to obtain traditional funding. Their aim is to provide support throughout the process, including using partner organisations and volunteers. www.fredericksfoundation.org Regional coverage: Berkshire, Bristol & Bath, Buckinghamshire, Cambridgeshire, Cornwall, Devon, East Sussex, Hampshire, Isle of Wight, Kent, Lincolnshire, London, Northamptonshire, Oxfordshire, Gloucestershire, Somerset, Surrey, West Sussex, Wiltshire

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Creative Industry Finance: Guidance for Applicants

As part of the larger Hitachi Group, Hitachi Capital Consumer Finance is the UK’s leading retail point of sale credit provider, providing over one billion pounds of consumer and personal lending each year to over 5 million UK customers. The company has over 30 years’ experience, working with some of the biggest names on the high street and over the last five years has supported retail in the UK by increasing lending year on year. www.hitachicapital.co.uk

Key Fund is a social enterprise and understands the unique difficulties faced by similar organisations when looking to develop and grow. By providing tailored investments, we are continuing in our mission to break down the barriers to accessing finance, enabling organisations to increase their community, economic and environmental impact. www.thekeyfund.co.uk

RateSetter leads the pack in the burgeoning peer-to-peer sector having lent more than any other platform in 2014 (£290million). Their lead continues to expand with a record breaking start to 2015 (£43million) and a forecast of £1.25billion for the year (SOURCE: ALtiFi Data).

The Platform offers a ground-breaking proposition that lets lenders set the interest rates they want via a fair online platform. Its pioneering Provision Fund was the first of its type in the P2P industry in the UK to help protect savers against the risk of the borrower default. It is also the largest at £12.7million and no lender has lost a penny sine its 2010 launch, a unique feat amongst the major P2P platforms.

RateSetter is an entrepreneurial company, established in October 2010, with the aim of improving the options for Britain’s lenders and borrowers. The business grew at 192% from 2012 to 2014 compared to overall sector growth of 108% (Nesta figures), making it the fastest growing major peer-to-peer company in the UK. www.ratesetter.com

Triodos Bank is the UK’s leading bank for social enterprise, and a fast-growing force within the charities sector. We’re currently lending well over £100 million to a hugely diverse range of clients – from local village halls to major regional, national and international organisations – all working towards lasting positive changes and a brighter future for all. We only lend money to organisations with clear social, environmental or cultural aims. We generally lend between £25,000 and £15 million per project, although we will consider lending larger amounts, depending on the project. www.triodos.co.uk

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Creative Industry Finance: Guidance for Applicants

WHEN DO I HAVE TO PAY THE MONEY BACK? Repayment periods will typically be between 1 and 7 years. Most lenders will expect you to begin monthly repayments immediately following receipt of funds. However, in some cases it may be possible to arrange a short deferment period.

WHAT CAN I USE THE L OAN FOR? Loans can be used for any business activity including:       

Working and/or fixed capital expenditure Taking on new staff Acquiring new premises Purchase of stock Purchase of equipment Marketing & communications Skills training/staff development

You cannot use the loan to pay off existing debts.

WHAT ARE THE INTEREST RATES? All loans offered under the Creative Industry Finance programme are interest bearing, and will be offered subject to the terms and conditions of the lender involved. Typically, interest rates will be in the region of 10% - 14%, but may be higher or lower dependent on the nature of the application and needs of the borrower.

DOES CREATIVE UNITED MAKE ANY CHARGE FOR THE SERVICES IT PROVIDES? Creative United is able to offer free business development advice to any business in the Creative Industry Finance programme as these costs are subsidised through our grant from Arts Council England.

Where we have been able to successfully support an business through to the point of securing finance from one of our lending partners, a commission, which is typically 1-2% of the loan amount, will be payable to Creative United. This fee contributes towards the on-going costs of supporting clients over the years ahead, following receipt of funds.

For example, if we are successful in supporting a business to secure a loan of £25,000 from one of our lending partners, Creative United will charge a commission of £250 where the rate is set to 1% of the loan amount.

Where the commission rate is set at 2% Creative United would charge for £500 on a loan of £25,000.

This commission can be paid in the following ways: 1. incorporated into the fees taken by the Lender and passed on to Creative United, or 2. billed to you directly by Creative United.

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GLOSSARY

A Accounts

All incoming and outgoing monies – income and expenditure – in detail. Usually includes monthly/yearly bank account balances.

B Business advice Business advisor

Business plan

Sharing of expertise on business best practice, strategy, planning and implementation.

A person who works closely with a business offering advice and sharing expertise on best practice, strategy, planning and implementation.

A document detailing state of current business and future development plans. Usually includes competitor, market and SWOT analysis. Useful when planning growth or to attract investment.

C Capital expenditure Collectives

Community Interest Company

Creative content

An amount spent to acquire or improve a long-term asset such as equipment or buildings.

A group of entities that share or are motivated by at least one common issue or interest, or work together to achieve a common objective.

A company that makes profit, but will reinvest all profit back into its community-focussed objectives or mission for the public good.

Output which has been produced with use of an individual’s or group’s artistic talent, or which clearly incorporates imaginative or innovative new work in a creative medium, e.g. music, crafts, performing arts, design etc.

D Debt finance Deferment period

Draw(n) down

A loan. An amount of money that is borrowed, and will be repaid with interest. Can be secured or unsecured.

A period of time, which might be just after a loan is drawn down, in which no repayments on the borrowed amount or the interest are made by the borrower. Interest may still be added during this period.

The act of the borrower receiving the loan funds into their own bank account.

E Enterprise

A business or organisation involved in the trade of goods, services or both.

F Financial forecast

An estimate of future financial outcomes based on existing accounts, (sales) data and external factors.

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I Interest bearing

Interest rates

Refers to the interest that is calculated against any outstanding loan amount, and which must be paid in full along with the initial amount borrowed.

Usually calculated at a %age of the amount borrowed, or the outstanding to be paid, and can be calculated daily.

L Limited Company Limited Liability Partnership

Limited Partnership

An organisation set up to run a business and its finances are separate to personal finances.

A partner’s liability is limited to the amount of money they invested in the business. Responsibilities and shares of profits are set out in an agreement. ‘Designated members’ have extra responsibilities.

Liability for debts is split among partners. A ‘general’ partner can be personally liable for all the partnerships’ debts, whereas a ‘limited’ partner is only liable up to the amount they initially invested in the business. General partners are also responsible for managing the business.

M Micro business

A business that operates on a small scale and would typically have fewer than 10 employees.

P Partnerships

Two or more individuals manage or control the business, share the profits and the liabilities.

R Registered Charity

A not-for-profit organisation with a social, environmental, educational, health or public interest

S Secured loans

SME Social Enterprise

Sole Trader

An asset is provided by the borrower as collateral against the loan. This means if the borrower defaults on payments the lender or creditor takes possession of the asset in lieu of payment. Would typically have a lower interest rate to an Unsecured loan.

An acronym which stands for Small or Medium sized Enterprise.

Determining factors are number of employees and turnover.

Businesses that have a social purpose or tackle social problems, improve communities or the environment. Profits made from their goods or services are reinvested into the business or their community.

Someone who is the exclusive owner of a business, entitled to keep all the profits and also is liable for all the losses.

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T Trading history

Turnover

History, usually in the form of accounts over time, who past sales of goods or services, as well as expenditure such as salaries, purchases and bills.

The amount of money or income earned by a business before expenditure or tax.

U Unsecured loans

A loan that is issued and supported only by the borrower's creditworthiness.

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Creative Industry Finance: Guidance for Applicants

INDEX access to finance, 2 Arts Council England, 3, 10, 18 business advice, 2 Business advisors, 3 business types, 6 CCJs, 15 commission, 14, 18 contact us, 4 creative and cultural enterprises, 2, 3 creative sectors, 6 Creative United, 3, 14, 15, 18 credit history, 15 eligibility, 2, 7 existing debts, 18 fees, 18 grant funding, 2 interest rates, 1, 15, 17, 18 Interest rates, 15, 20 lending partners, 2, 3, 10, 14, 15, 18 loan, 2, 14, 18 debt finance, 2, 6, 10 national evidence base, 2 online application form, 2 pilot programme, 2 Repayment periods, 15, 17

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www.creativeindustryfinance.org.uk

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