Rail
The UK rail industry is experiencing one of its most exciting and important advancements in its 192-year history
Ever since George Stephenson’s development of the locomotive steam engine in 1825, the nation’s railway has continued to innovate, and we are currently seeing a move to put strategies in place to ensure that the UK’s railway systems are world-class.
The government’s recent strategic vision for rail, detailed in the Industrial Strategy white paper, envisions the UK as the world’s most innovative economy, and proposes infrastructure is upgraded to support this ambition.
The government’s grand challenge is to ensure that the future of mobility is tackled and infrastructures are in place to accommodate the increasing capacity of rail users.
Rail opportunities
With ambitious goals to make the UK the number one place for innovation, productivity and growth, it is important that the UK maximises the potential of the rail sector.
This focus on connectivity will open new economic opportunities for rail supply chain businesses looking to seize this moment to unlock their growth potential. From digital infrastructure planning to cutting-edge technology research, to component manufacturing and more, SMEs need to drive innovation and capitalise on rail opportunities, taking advantage of this time of significant development.
For those looking to exploit emerging opportunities, securing an injection of investment finance can help them to scale, catalyse growth and drive much needed innovation for the rail industry.
Case in point is Perpetuum, a Southampton-based software and engineering company that has secured contracts with both domestic and international clients including Southeastern Railways, Virgin Trains and the New York Metro after they recognised the application of its self-powered wireless sensor system – the first of its kind in the world – in improving reliability, safety and the cost effectiveness of rail delivery.
The on-train system continuously monitors and reports the condition of key functions such as wheel bearings and gearboxes, as well as the state of the track and passenger ride quality to ensure clients can react to real-time information.
Innovation
This is just one of the SMEs innovating in the sector, seizing the emerging opportunities and securing an injection of flexible investment finance. Many SMEs will also find that their skills and services can crossover into the rail sector, and there is funding available to help support this, removing barriers to entry and maximising commercial opportunities.
For example, Trolex Aporta seized the opportunity to crossover its services into the rail sector after securing £1 million investment from the Rail Supply Growth Fund. With a track record of delivering bus and coach operators with infotainment systems, the investment enabled them to pursue domestic and international contracts within the rail industry.
With the government’s strategy to develop digital infrastructure, Trolex Aporta’s business model will help ease the pressure of the rail industry’s demand for high-speed Wi-Fi and entertainment onboard passenger carriages.
Glyn Jones, managing director of Trolex Group said: ‘It’s an exciting time for the rail industry. The sector is currently experiencing increased demand from customers for high-speed Wi-Fi that delivers entertainment direct to their fingertips. At Trolex Aporta we aim to provide an innovative solution that not only guarantees a reliable full entertainment service for passengers, but one that is cost-effective and easy to maintain for rail operators.
‘Our greater mission is to lead domestic and international rail industries to a more efficient and user-led future. The funding provided will help us to develop our system further ensuring a better travel experience for rail passengers.’
Improving the passenger experience both at stations and on trainsefficiency of passenger flows through stations and trains and producing personalised customer experiences is rising up the agenda, an area in which the industry is well known for lagging behind the likes of air and road transport. As a result, it can be expected that further opportunities will emerge in this space, driving innovation and research, developing dynamic solutions to significant areas within rail.
Therefore, it is critical that there is commitment to tackle the challenges being faced by the modern UK rail industry. Providing access to flexible finances to the rail supply chain is essential for SMEs in the sector to gain traction within this thriving time, as it drives investment in projects that develop a high-quality infrastructure.
Investment options
While the evolution of rail is set to present a number of promising prospects for SMEs, they must be confident in their ability to win, serve and sustain larger and longer-term contracts effectively. As with many industries from automotive to digital, securing investment finance can be the key to unlocking this growth.
Whether it be debt or equity finance, large injections of working capital can drive product development and R&D, or allow a business to upscale capacity its of assets and its upskilling and increasing its workforce.
This is where the national Rail Supply Growth Fund can support businesses seeking accelerated routes to market. Managed by Finance Birmingham and supported by central government, the £20 million Rail Supply Growth Fund continues to provide a dynamic solution for businesses in England seeking flexible and affordable finance.
Jack Glonek, investment director for the Rail Supply Growth Fund commented: ‘A strong rail supply sector is critical for the government’s plans for a modern rail system, whether for high speed, conventional, freight, metro or light rail.
‘It is also essential for unlocking economic growth and creating new jobs as well as connecting communities and enabling them to develop and grow. Delivering a world class railway requires a productive, innovative and responsive UK based rail supply sector’.
The fund is designed to help suppliers of all sizes and types have access to affordable finance in order to develop their capabilities and improve their productivity and competitiveness to help to deliver this railway of the future.
Key commercial drivers for the fund will help remove barriers to entry, strengthen the capability and competitiveness of the rail supply sector and increase support for onshore companies. An enticing element of the fund is the potential for a financial contribution (grant based) being available for up to ten per cent of the application value to assist innovative crossover products and services and supply chain participation.
Key application criteria
• open to businesses across England either currently operating in the rail sector or with the ability to supply into the rail sector with crossover sector products and services
• a plan to develop and grow the business with financial forecasts key to supporting an application
• a strong management team and trading record
• funding is available for working capital, new capital expenditure and product launch
• increased jobs, productivity and capability must be demonstrated along with private sector funding to support the application.
Loan terms
• loans available £500,000 to £2 million with flexible funding to reflect circumstances
• complementary to existing bank debt rather than in replacement
• repayable over up to five years
• fees and charges will apply
• a debenture will be required.
