Business Funding in Leeds City Region

Jane Lambert


"Where do I get funding for my business now that the banks have stopped lending?" This is the most frequent question that I have been asked since 2007 at my IP clinics, inventors clubs and talks and seminars for business start-ups even though as an IP lawyer I claim no expertise in business funding. Now at least I have a  website to which I can refer enquiries in the Leeds City Region at any rate.

Leeds City Region LEP
The Leeds City Region Local Enterprise Partnership, which is a collaboration between local authorities and business leaders and academics within commuting distance of Leeds City Centre to promote economic and social development within that region, has gathered together a web page listing all the funding options that are available to businesses in that region  The title of that web page is Business funding options and you will find it at http://business.leedscityregion.gov.uk/support/funding/

Types of Funding 
Funding for businesses falls into two categories:

• long term investment in plant, buildings and other fixed assets; and
• short term funding to purchase stock or meet other immediate priorities.

As a general rule long term investment takes the form of investment in exchange for a share in the business while short term funding takes the form of loans.  If you don't know the difference between investment and lending then your first port of call should be "Business Finance Explained" on the gov.uk website. Once you are clear in your mind as to what you need for your business and what is on offer then take another look at the Business Funding Options web page.

Types of Funding Available

The website offers information on:

• Grants: essentially gifts of money that do not have to be repaid;
• Investments: funding in exchange for shares in a limited company or possibly a partnership; and
• Loans: funding that has to be repaid usually with interest.

Grants

One source of grant funding is The Business Growth Programme which provides grant funding to businesses based in Leeds City Region or planning to invest here. You will find further details on the LEP Business Growth Programme page of the LEP's website. There are details of other grants on the LEP website. There is also a very good website called j4bGrants which publishes a regular newsletter to which you can subscribe.

Investment

This could come from a business angel (a wealthy individual who wishes to invest in a new venture) or an institution that believes that your business will grow very quickly and sees an opportunity to make a substantial profit in two or three years time through a flotation on the stock market or a business sale. The LEP website links to Envestors which manages the Yorkshire Association of Business Angels (a group of business angels based in Yorkshire) and to Finance Yorkshire which provides a range of funding products.

Lending

Traditionally short term lending has been provided by the clearing banks and the LEP has arrangements with a number of banks that have received funding from the Regional Growth Fund to support local business. The Business Funding Options web page mentions those arrangements and links to a number of lending schemes. It also links to  the Business Enterprise Fund which is a community development finance institution which can sometimes offer loans to businesses that would not qualify for bank lending.

Eligibility

The website is directed to businesses that are in, or are contemplating moving to, the Leeds City Region only. Check the coloured map above to see whether you are in or out of that region. This article may still be useful to you even if you are outside this region because other regions make similar provision for businesses in that area.

Legal Advice

Whatever form of funding you seek even if it is a grant you will enter legal relations with, and may well incur legal obligations towards, your funder. Before assuming those obligations you should seek proper advice from an experienced business lawyer. Remember that there are likely to be many issues such as tax, intellectual property and enforcement.  

Further Information

if you want to discuss this article, call me on 020 7404 5252 during business hours or send me a message through my contacfot rm.

Post Script

Kin F. Kam wrote on Linkedin: "If you have an innovative product underdevelopment, or in the hope of developing it, there is also #InnovateUK 's innovation voucher scheme. It's worth £5K. I got mine confirmed last week."

Many thanks for that comment and good luck with the business

Patent Box and R & D Credits: Dan Brookes's Slides

Tax Relief for Innovation: Patent Box and R & D Credits Regime by Dan Brookes of BDO 

I introduced the patent box and our guest speaker in "Leeds Inventors Group: Patent Box and R & D Credits" 4 May 2013. Here are his slides.

We had a good meeting on 8 May 2013 and although we were a little low on inventors we had rather more accountants and lawyers in the audience.  We were particularly pleased to welcome Ros Beattie of Company Solutions and Jordi Farré Gasol of Barcelona who is currently working with Schofield Sweeney of Leeds.  Ros knows more than most about start-ups having been chair of Bmedia. She is now contributing her experience to the Business Enterprise Fund.

In the questions and answers session after the talk, I asked "what happens to the tax if a patent is revoked? Must the tax be repaid?  This was a question that I had raised in similar presentations at Daresbury and Liverpool the previous month.  Dan did not know the answer off the top of his head but he promised to look it up.   This is his reply:

"Vince and I have spoken about the query you addressed with us at our respective events in Liverpool and Leeds. The attached link to HMRC manuals appears to infer that HMRC take the view that there will be no retrospective clawback of patent box benefits where it is clear that the company has claimed on a patent that has been granted by a qualifying patent office, even in the situation that down the line events take place which means that sales of product are no longer covered by the patent. In this scenario benefits are denied going forward but there is no retrospective clawback of relief.
http://www.hmrc.gov.uk/manuals/cirdmanual/CIRD210180.htm

I hope this is helpful."

It is indeed helpful and my thanks to Dan and Vince Walker of the Manchester office of BDO for their trouble.

A lot of useful information on the patent box and tax law relating to IP generally can be obtained from Intellectual Property Tax which is edited by Anne Fairpo of Atlas Tax Chambers.  Atlas merged with 4-5 Gray's Inn Square just about the time I joined the set.  Anne is also one of the contributing editors to IP Finance. 

If anyone wants to discuss this article or IP or tax generally you can call us in Leeds on 0113 320 3232, Huddersfield on 01484 599090 or London on 020 7404 5252.   You can also contact us through our message form.