A £24m funding pot to help regional manufacturers grow is now open for businesses to tap into.
North East employers can access up to £14m of the cash, with the remaining cash earmarked for businesses in the West Midlands.
The multi-million pound scheme has been launched to increase the manufacture of tools in England, and so far 20 UK firms have received a slice of the cash.
At a packed meeting of the Advanced Manufacturing Forum (AMF), in South Shields, members were urged to make use of a £14m portion of the total pot that has been earmarked for companies in the region and further afield.
The other £10m is to be ploughed into the West Midlands area.
The Tooling Fund – managed by Finance Birmingham for Birmingham City Council which is rolling out the programme country-wide – can help manufacturers with cash injections of between £50,000 and £1m.
The fund has proved a massive positive talking point for the industry after a negative shift in the way banks are dealing with tool manufacturers.
Steve Hetherington, investment director of Finance Birmingham, said: “Banks are just not funding the manufacturers of tools. They have moved away from overdrafts and you can’t fund tools through invoice discounting.
“We have created a £24m Tooling Fund for five years, which is there to fund the design, development, and manufacture of tools.
“The component manufacture must happen in England. We recognise that there are tools that are made in China, Italy, and Portugal, and they get brought into the UK.
“Provided the tools are finished here in UK, and sub-component part manufacture takes place here, we can fund those tools.”
Other criteria which must be met for a slice of the fund includes:
- Proven ability to complete similar projects,
- Must be creating or safeguarding jobs in England,
- Are unable to obtain the finance in whole or in part from an existing provider.
Mr Hetherington added: “£10m has now been earmarked for the West Midlands. The other £14m can be used by companies in this area and anywhere in England.”
Money from the fund is classed as a loan rather then a grant, but with an interest rate and arrangement fee of one per cent and no other costs, it could be a positive move for manufacturers.
The loan cash is reimbursed when the manufacturer gets paid for the end product.
One unnamed company, which sought help from the scheme, received a large order from America to produce lights for the film industry. It could not get the tooling to go into production, so requested £67,500 from the fund which it received and will repay upon payment for the products it produces.
So far, out of the 20 companies which have received cash from the fund, five have successfully repaid.
Jack Hanwell, manufacturing sector development manager for AMF, said: “AMF was delighted to have been able to provide this opportunity to its manufacturing members.
“Support such as this is vital to help manufacturing compete on the global stage and AMF’s regular monthly events will continue to provide practical and informative advice.”
The AMF meeting also focussed on how manufacturers can gain access to expertise and world class facilities available in the North East to help boost the transformation of business ideas into reality.
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