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ANNEX I FUND PRIFILE PSYBT

Objectives of fund

The aim of the Growth Fund is to help PSYBT-assisted businesses to raise money to grow by

• Providing help to put together a business plan
• Assisting the business to identify and source funding
• Providing loan funding to fill the gap
• Offering support from an aftercare adviser or mentor to implement the Growth Plan.

The Fund administers 2 loans:

A Development Loan of up to £10,000 for businesses aiming to grow their turnover by at least 25%. This is open to businesses who have been trading for a minimum of one year and a maximum of 3 years and where the proprietors are no older than 29.

An Accelerator Loan of £10,000 to £25,000 for businesses aiming to grow their turnover by at least 50%. This is open to businesses who have been trading for a minimum of one year and a maximum of 5 years and where the proprietors are no older than 31.

The Fund was initially set up as a pilot project to be run for a maximum of 3 years. However, following an evaluation at the 2-year point, the PSYBT Board of Directors took the decision to fundraise to secure the Fund as a permanent part of the PSYBT portfolio.

Geographical coverage

Applicants come from all over Scotland, reflecting PSYBT's nation-wide coverage.

Table I.1: PSYBT - geographical coverage by region

Financial resources

The original Fund was £440,000. This has now been topped up by £572,323 with the target of raising a further £25,000 by 31 ^st December 2006. ERDF has contributed £190,678 of which £158,876 has been received to date. Of the remainder of £821,645, only £201,000 has come from the public sector, £125,000 from Scottish Enterprise, £65,000 from Highlands and Islands Enterprise and £11,000 from the European Investment Fund.

Investments

The Fund has a target of supporting 22 businesses a year with an investment of £270,000.

Table I.2: PSYBT - Outcomes

The Fund currently has £218,900 in the bank and with fundraising pledges and monthly repayments from existing investments is comfortably able to meet its immediate commitments.

Table I.3: PSYBT - investments by sector

Financial results

To date, the Fund has anticipated losses of £80,000 (£25,000 in Year 1, £25,000 in Year 2 and £30,000 in Year 3).

£27,187 was written off in Year 1, £28,953 in Year 2, £2,488 in Year 3 and £37,346 in Year 4, a total of £84,121in capital and £11,854 in interest. However, of the 8 loans written off, 4 have resumed repayments.

Economic targets and outcomes

The ERDF investment of £190,678 has levered £395,645 of new private funding for the Growth Fund.

Additionality and displacement

The fund is a lender of last resort. Written confirmation is sought from the bank and other funders to confirm the money is not available from elsewhere. Results from our survey in respect of additionality are shown below.

Advertising and application procedures

PSYBT works through offices throughout Scotland.

Management and governance

As indicated above, part of PSYBT.

Management costs

No separate analysis of management costs is available.

Survey results

1. What sources of funding were used in your business before applying for funding? (please tick all that apply)

2. What was the main purpose of seeking funding?

3. How did you hear of this fund?

4. Why did you decide to apply for funding from this fund?

5. What would have happened if funding from this fund had not been available?

6. How easy were procedures for obtaining funding from this fund?

7. How easy were the procedures for obtaining any other funding required?

8. What has been the impact of this funding on the operation of your business?

9. Do you receive business advice as part of the funding? (please mark all that apply)

10. Changes in your turnover and employee numbers since the PSYBT lent funds to your business

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