The Small Firms Loan Guarantee (SFLG) is a joint venture between the Department of Trade and Industry (DTI), and participating lenders with the aim of fostering the growth of small to medium-sized businesses in the UK. Without adequate capital, small businesses cannot grow, and as they do not have the required assets as security, they cannot access conventional loans. The Small Firms Loan Guarantee is designed to overcome this.
Features of the Small Firms Loan Guarantee Scheme
•To take advantage of the SFLG loan, your business must meet the following criteria: oFor manufacturing businesses, the annual turnover should be less than £5.6 million in a financial year. For non-manufacturing businesses, the annual turnover should be less than £3 million. oYour business should have a consistent trading existence of less than five years. For a company, this is typically calculated from the date the business started paying corporation tax. For the self-employed, the date the business became liable to pay class 2 National Insurance contributions. For business transfer, the five-year age limit is applicable to both the business being acquired and the business making the acquisition. oYour business should belong to an acceptable industry sector. Unacceptable industry sectors are Agriculture and Horticulture; Betting and Gambling; Commission Agents; Education; Fisheries; Forestry; Medical Services; Real Estate and Postal Services. Changes in the SFLG have come into effect from 1 April 2003, where sector exclusions have been removed for beauty parlors, catering, coal, hairdressing, and retailing.
•To proceed with the Small Firms Loan Guarantee You have to apply in the prescribed format of the lender. Your application, which is subject to normal underwriting criteria, is processed and, once approved, the loan is sanctioned. Thereafter, the participating lender directly transfers the funds to you.
•DTI secures 75% of the loan amount by giving a government guarantee to the participating lender for which you have to pay a 2% annual premium on the outstanding balance of the loan, payable to the DTI.
•SFLG loans of up to £250,000 may be sanctioned. Different participating lenders sanction different amounts, but most of them offer loans between £25,001 and £250,000 over 2 to 5 years.
•Since the participating lender takes the risk to the order of 25% of the loan, the decision to approve or reject the application, lies with the lender. Most lenders require documented evidence regarding the viability of your business. For example, the management, the product or service, the markets, the financial health of the business, the objectives and strategies, the financial projections, the finance required, the security available, the accounting systems, and the principal risks.
•The documents to be submitted along with your application are your latest audited or management accounts, your business plan, and your financial forecasts. Lenders may require additional documents. Your application is processed by the lender with the DTI. The necessary paperwork is forwarded to you by the lender. Upon approval by the DTI, and the lender, the funds under SFLG are transferred to you.
Indian technology firms, which have cracked the software codes, are now ready to learn a few marketing mantras and may actually be practising what they preach. Small and medium firms are seen outsourcing some key marketing functions like making pitch documents, lead generation, power point presentations and even reverse outsourcing (where they appoint a local agency to market their products and services in the US). Demand is coming from startups seeking to attract potential buyers and investors and those who are looking at sustained growth. Many VCs and PE players are also approaching outsourced CMO (chief marketing officer) or such outfits for their portfolio companies.
A cluster of service providers are mushrooming to capture business from small enterprises, who either lack the bandwidth or cannot afford a high-cost, full-time marketing resource. CMO Axis, co-founded by Vinod Harith, till recently global head of marketing communications for Wipro Technologies, offers to build and run a company's annual marketing calendar. ?We also work for large companies and free management time by taking over functions like blog and website management IT presentations, powerpoint repurposing,? says Mr Harith.
In the same space is Vijay Menon, a freelance CMO, formerly vice president, marketing at QuEST and Infosys BPO. Mr Menon says, these enterprises may not be able to derive benefits from hiring a full-time CMO, who may come at a salary level bill of up to Rs 50 lakh per annum. Obviously, ?during a downturn everybody is cautious of hiring a high-cost professional,? one industry player said.
However, Srini Rajam, CEO, Ittiam Systems, makes a clear distinction between marketing and branding. Marketing becomes the fulcrum of any organisation in deciding the road map as well as the genesis of product and services. Some parts of branding activity could be outsourced especially when a product is being taken to the market, he adds.
Gaurav Gupta of Everest Group, says, ?it is a long way to go before sales force is outsourced as most companies like to be in control and have their internal systems in place. Outsourcing is catching up in telemarketing and analytics, particularly in financial services sector like credit cards, insurance and the like. Even captives of i-banks, for instance, bring to offshore tasks like pitch documents, power points, analytics and marketing support, he says.
Globally, there is a case for outsourcing for companies in the $20 million-$100 million range and the biggest challenge for them is lead generation and building a brand. The challenge in the marketing outsourcing service provider space in India stems from lack of integration between analytics, market intelligence and marketing functions, says S Sabyasachi, senior director, neoIT, an offshore advisory firm.
Both Ken Wilson & Mark William are contributors for EditorialToday. The above articles have been edited for relevancy and timeliness. All write-ups, reviews, tips and guides published by EditorialToday.com and its partners or affiliates are for informational purposes only. They should not be used for any legal or any other type of advice. We do not endorse any author, contributor, writer or article posted by our team.
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