Over the next few years we will invest around £200 million in fast-growth small and medium-sized enterprises (SMEs). These businesses will be among the most successful in the UK SME sector and will be the so-called ‘Growth Champions’ of the Breakthrough programme.
What we’re looking for in a Growth Champion is a business, which has probably been trading profitably for at least three years, with a turnover between £500,000 and £25 million, specifically because of the highlighted funding gap in this segment. Such companies must also demonstrate strong annual growth of around 20% in any combination of turnover, profitability and employment. Crucially, a Growth Champion should have the potential to continue to improve on that rapid rate of expansion. We’re not just looking for companies that are doing well; we aim to identify businesses with the potential to become the market leaders of tomorrow. To qualify for the programme companies will need to satisfy the criteria outlined above while also demonstrating that their management team has the skill and experience to deliver on workable and ambitious growth plans.
Ahead of the official launch of the programme, we have been actively identifying companies that meet our criteria, working in partnership with business intelligence company Experian. We have been engaging with potential growth champions through a number of channels and as Breakthrough becomes more widely known within the business community, we will be talking to even more prospective candidates and assessing their business plans, management teams, history and market positioning.
Funding our champions
We will invest in our selected Growth Champions through traditional debt facilities and growth capital loans, enabling fast-growth companies to raise the cash they need for expansion.
Prospective Growth Champions will initially discuss their aspirations with our locally based relationship managers and later in more detail with members of the Growth Capital team, who will structure a debt package tailored to meet individual company needs and continue to liaise with relationship directors. Facilities will therefore vary depending on a range of considerations. In contrast to a conventional bank loan, the money is repaid in a single event when the loan matures, so there will be limited drain on cashflow month-by-month. It also offers other advantages over alternative funding structures, in that business owners will not have to cede significant equity (as would be the case in an angel or venture capital investment) and the money comes with a full range of dedicated support initiatives from Santander.
"In a very real sense, these companies will be
championing the growth potential of innovative
and agile UK companies."
The Breakthrough programme is a combination of finance provision and business support. Funding is indeed crucial and many of the businesses we speak to will doubtless be experiencing for the first time just how difficult it can be to raise sums in the so-called ‘funding gap zone’ of £2-10 million. However, in addition to our commitment to lend, we have put together a range of support tools and initiatives aimed at providing help for businesses seeking to move up to the next level. A key element is input from third parties. Throughout the life of the Breakthrough programme, we will be helping our Growth Champions to establish short and long-term relationships with mentors, business gurus and universities. This will be done through visits to leading companies, events and an internship programme. For businesses seeking to build overseas sales, we will also be working with our partners to place Growth Champions on funded overseas trade and fact-finding missions.
A journey towards growth
We will be embarking on a journey with our Growth Champions. Over the four to five years that the programme will run, we aim to be on hand as our chosen businesses break into new markets, expand via acquisition and scale up their operations.
We are confident that our chosen Growth Champions will not only become winners in their own right but also share their success with other businesses who aspire to rapid growth. We’ll be charting our Growth Champions’ progress and working with them to prepare case studies and reports from which others can learn. In a very real sense, these companies will be championing the growth potential of innovative and agile UK companies. Indeed, by encouraging Growth Champions to share their experience of success with others, we hope the Breakthrough programme will resonate far beyond those companies who actively take part in the programme.
If you believe your company has what it takes to become a Growth Champion, the first step is to speak with us. Your local relationship manager can arrange an introduction to our Growth Capital team who will establish whether your business is likely to benefit from the help we can offer.