Passion vital for firms searching for backing

This was the message relayed at Financing Growth 2011, an event which matched ambitious SMEs with finance providers in Leeds last week. The conference featured speeches from seasoned entrepreneurs and lenders and had a dozen exhibitors representing a range of different financial institutions and advisers.

Graham Bowland, chief executive of Surgical Innovations, told delegates that passion is vital to businesses in the search for finance. In an energetic presentation, the CEO revealed how he had just returned from a business trip to the United States, where he had spent three hours in an operating theatre watching a complex hysterectomy using his company's equipment.

Mr Bowland said: "I'm really passionate about our company. That's really important in terms of getting the message out when you are raising money. My job is selling the story of Surgical Innovations."

The company was founded in 1992 with 1,000 of share capital. It is now listed on Aim and has a market capitalisation of 23m.

Surgical Innovations employs 110 at its headquarters, which houses its manufacturing plant and research and development unit. The company exports 80-90 per cent of its medical devices and its biggest market is the United States.

Mr Bowland, a chartered accountant, joined in 1999 when the company was heavily loss-making. In this kind of situation it is important to "talk to the bank and tell it all about the company and what your plans are for the business", he said.

With the help of a new chairman, Doug Liversidge, the new management team spent the first half of the last decade turning the business around and changing its products, which are used for keyhole surgery procedures, Mr Bowland added.

"In 2006, we managed to hit all our numbers for the City. They were very small, but we did what we said we would do. That's important when you are talking to the City. They don't like surprises."

More than 200 people attended the conference, which was organised by the Leeds, York and North Yorkshire Chamber of Commerce and presented by the Yorkshire Post.

The audience heard from Mark Whitaker, a former corporate banker with 30 years of experience, who revealed what lenders look for in credit applications.

He said banks focus on the borrower, the purpose of the loan, the amount, the serviceability and the security. Borrowers must have credibility, he said, and their stake needs to be "hurt money", something they will be upset to lose.

Mr Whitaker admitted that the lending policies of some banks "seem to bypass common sense" and can change very quickly, without customers or even relationship managers being told.

He also revealed that banks are charging interest of eight per cent on loans, which is well above the Bank of England's 0.5 per cent base rate.

In a defence of the industry, Mr Whitaker said: "Despite what the Press say, banks want to lend, they are here to lend and the client can help the banker help them. All of you have a role to play in supporting frontline bankers who have nothing to do with merchant bankers paying themselves millions of pounds."

One of the exhibitors, commercial banker Malcolm Hall, of Lloyds TSB, told the Yorkshire Post: "We are still lending, as we have through the cycle. We are having a lot more success at getting deals through." Like Mr Whitaker, he said serviceability is the most important quality.

Delegates also heard a speech by Darren Shaw, a business consultant and investor, who has worked with 15 SMEs over the last six years.

After two difficult years of cutting costs and retrenching, he said small businesses in 2011 should focus on "positioning, building a good team and punching your weight". SMEs are moving into a more aggressive mode this year, although credit will only be available only to those that present a strong business case, he told delegates.

Mr Shaw is advising the chamber, which, like many of its members, has been through a cost-cutting process. He said: "It recognises that it needs to invest in different areas to provide meaningful and valuable services."

Big names for growth event

More than 200 people attended the Financing Growth 2011 event to learn about new and alternative ways of raising funds.

They heard from speakers including Graham Bowland, chief executive of Surgical Innovations, Mark Whitaker, a director at Begbies Traynor, and Darren Shaw, a business consultant and private investor.

Exhibitors included the Business Enterprise Fund, Connect Yorkshire, Commerce Intelligence Group, Finance Yorkshire, Haines Watts, Irwin Mitchell, Lloyds, Yorkshire Association of Business Angels, Yorkshire Bank and WGN, the accountancy firm co-founded by Colin Glass, who has helped a number of small businesses achieve their growth potential.