You’re probably busy enough keeping up with your MISs and your DAMs and sorting out your PDFs from your EPSs. The last thing you need when you’re trying to source alternative funding for that workflow upgrade – because your bank doesn’t want to know – is that you don’t know your RGF from your EFG, or your FLS for that matter.

The Regional Growth Fund (RGF), the Funding for Lending Scheme (FLS) and the Enterprise Finance Guarantee initiative (EFG) are all funding streams in various guises launched by the government to improve access to finance, especially for SMEs.

While the EFG, aimed at businesses without the necessary security to qualify for a loan, has been criticised for its lack of uptake due to its complex approval criteria, and the Bank of England’s FLS has attracted similar scepticism because of its slow impact on lending levels, the RGF appears to be making waves in print.

Launched by government in 2011 and administered by the Department for Business, Innovation and Skills, the £2.4bn fund is designed to support programmes and projects that can attract private sector investment to create economic growth and that can help regions heavily reliant on public sector funding.

The initial £2.4bn was allocated in three funding rounds. The first £450m went to 50 bids in April 2011, with a further £950m allocated to 126 bids in the autumn. Last October, 120 projects secured a share of the third round’s £1bn pot and a further £350m, taking the RGF to 2.75bn, has just opened for bidding.

For printers, particularly SMEs, there are two application routes. The first is to apply for first tier funding, either as an individual firm or a partnership consortium. But with a minimum bid threshold of £1m and a lengthy and complex application and, if successful, due diligence process to adhere to, this is prohibitive.

At this level, the funding is predominantly awarded to RGF programmes (including banks and other lenders, Local Enterprise Partnerships and public/private sector partnerships), which act as intermediaries to distribute smaller fund allocations from £10,000 to businesses or projects through grant or loan funding.

This second funding tier is where printers come in. With a far simpler application process involving a simple business plan and presentation, which – rather than being carried out with a government RGF-team – takes place in the comfort of your local bank manager’s office. A successful bid could result in a contribution of up to 35% of your total investment.

Although criticised in rounds one and two for not having enough lending institutions signed up to distribute funds, third round allocations have attracted a wider group of approved providers. This includes RBS, HSBC, Lombard, Close Brothers Asset Purchase Programme and Lloyds.

Trickling funds
In recent months and weeks, we’ve seen the fruits of the RGF scheme trickle into the print industry. Through its traditional lender, Print Leeds secured £500,000 from the third round; this helped it invest in a new B1 Heidelberg press and facility expansion. Johnsons of Nantwich had similar success part-funding a new Speedmaster with an RGF grant. CS Labels secured a 35% grant, through HSBC, towards a new Xeikon 3500. Paper manufacturer James Cropper was allocated a whopping £3.2m grant for a steam-raising plant, subject to due diligence.

This all sounds rosy, but there are of course criteria that must be met. Applicants must include evidence that the investment would not go ahead without funding. They must also lay down a 10% deposit against the total value of their proposed investment. The commitment to create and sustain jobs is a must, too.

CS Labels managing director Simon Smith says the company had to create a certain amount of jobs according to the amount of grant finance received. "We had to take on three additional members of staff and demonstrate that it would safeguard two further jobs. That was very easy.

"We could demonstrate the profitability of the businesses and give them a lot of confidence, which is what we as an industry need to be better at – selling ourselves."

Managing director of Print Leeds Rod Fisher needed to find a £250,000 deposit, which he said could be off-putting for some companies. "It’s a great scheme, but I suppose the 10% deposit, which cannot be a loan, would be challenging for some. The scheme probably suits well-funded companies best."

However, he said the simplicity of the application process had made it very accessible. "I only had to answer six or seven questions on a form and then give all my financials. The hardest thing really was a deposit."

But criticisms about the RGF – raised in an MPs progress report published in July last year and echoed by businesses communities across the board – centred on the scheme being too lax in letting first tier providers distribute funding only to robust businesses with long-term viability. Critics also claimed there was not enough control over how businesses used second tier funding.

Two industry sources said they know of firms "with solid backgrounds" that were allocated funding and using it to help clients invest in new kit or "win new business".

Compass Business Finance’s Jamie Nelson says the criteria has been tightened up in the wake of the report: "It has become far more stringent particularly in terms of ongoing auditing. You are being granted money; no-one said it should be easy. It is tax-payers’ money and we need to know that it’s going to the right place."

But Nelson also points out that the tougher criteria is also a double- edged sword. "This is probably why we are seeing a slower roll-out from the third tranche," he explains.

"Lenders will be asking themselves if committing to regular audits is too onerous on their resources. Hopefully it’s not too prohibitive."

With round four still open for first tier bidding until 20 March, printers looking for finance have plenty of time to create their business proposals and make sure they measure up.

30-SECOND BRIEFING

• Regional Growth Fund is a £2.75bn government fund, launched in 2011, aimed at supporting programmes create economic growth
• First three rounds allocated £2.4bn between 2011 and 2012, although much of the £1bn third round pot awarded in October 2012 is yet to be drawn down
• Bidding for funding from the fourth round of the RGF opened in January and is open until March 30. The fund is worth £350m
• First tier bidding has a minimum threshold of £1m for individual or partnership projects
• First tier funds can be administered to local partnership bodies, public/private partnership and lenders including high street banks that sign up to the RGF
• SMEs, that have struggled to get funding elsewhere, can apply indirectly to the fund through banks for at least £10,000
• Applicants must put down a 10% deposit on the total investment value, safeguard or create jobs and prove that the investment would not go ahead without RGF funding

Will you be looking into these alternative funding streams?

Alan Padbury
Managing director, Westdale Press
"It is not something that we have looked into recently, as we have tended not to qualify in the past. Our finances have been too strong to warrant us getting additional support. We just get on with it. We have survived despite governments and despite their different schemes. If there was something really exciting that was available, accessible and that we were informed about, then we’d probably look at it. But these things can take time to organise and prepare and then after all the effort you might fall at the last hurdle."

David Pealing
Sales director, Severnprint
"There is no funding for our area for things like asset investments. We’ve had great support from UKTI for our exporting, however. We’re looking at investing in litho at the moment. We would be interested in any kind of funding that might be available to help us grow that. Government schemes aren’t well publicised. Much of that is to do with the government’s new local systems that support their regions; because there has been a period of transition, it has hampered information on funding getting to those who need it, like SMEs."

Robert McClements
Chief executive, Print Yorkshire
"We applied unsuccessfully to the RGF for more than £1m to part-fund a three-year ‘hybrid’ programme for creative and digital industries across Yorkshire. The successful programmes were the local city regions. It seems to me that RGF money has been allocated to them so they can spend it on things like infrastructure. They do recognise that digital is a key sector, but they can’t access it like we can. Regional partnerships distribute to a lot of sectors, but it would benefit print if it was routed through a sector-specific body so that it gets to the right places."

Read Finance in Partnership director Murray Booker's comment here