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Rail Supply Growth Fund

Main Details

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Where can I find the Application Guidance Notes, Expression of Interest and Application Forms?
The Application Guidance Notes, Expression of Interest forms and Application forms can be downloaded from www.FinanceBirmingham.com/RailSupplyGrowthFund or by email request to: andygreen@financebirmingham.com or jackglonek@financebirmingham.com


What are the minimum & maximum amounts I can borrow?

The minimum amount is £500,000 and the maximum is £2,000,000. The applicant Company’s contribution against the funding sought is ideally in the range of 1:1 but this will be dependent on the specific circumstances and nature of the proposed project and applicant Company.

Can I get a grant from the Fund?
The Fund is a loan based facility. However, a potential contribution of up to 10% of the application value may be sought as grant support, if the applicant is able to clearly demonstrate the relevance and viability of potential rail crossover products and services and how this financial contribution would enable the applicant to enhance its participation within the rail supply sector.

What is the expected length of a project/loan and over what timeframe can the funding be drawn down?
The applicant Company must be capable of drawing down all approved loan funding within 12 months of receiving the confirmation letter of funding support. The repayment term of the loan will reflect the financial return period of the applicant’s proposed project which for the introduction of crossover products and services would need to be made by May 2021, being a maximum of 5 years from when the Rail Supply Growth Funding was awarded. The applicant would be expected to specify in their application their proposed repayment period and a repayment mechanism.

Is this Fund competition based or open ended?
The Fund is available from  2016 on a first-come first-served basis, subject to the availability of funds, with decisions on funding made by an Independent Investment Board meeting on a monthly basis. The size of the Fund is currently limited to £20m, but it is a revolving loan facility and, as loans are repaid, additional funding to new applicants will become available.

What size of businesses can apply?
There is no restriction with regard to the size of the business that can apply.

What type of businesses can apply?
Applications for funding can be submitted by a single applicant Company or by a group of named companies and organisations (such as academic partners) led by a lead applicant Company, thereby forming a consortium application. The lead applicant Company will, on behalf of the consortium, complete and submit all the required documentation. It is expected that applications will be industry led with applicant Companies being limited companies with a minimum 2 year trading history.

Are there any geographical restrictions?
Applicants must already be based in England or become based in England as part on an inward investment or reshoring project. The funded project activities from this Fund must be producing economic benefits such as increased productivity and job creation/ safeguarding, which need to be wholly based in England.

How quickly can my application for funding be processed?
We will use best endeavours to approve applications for funding within 6 weeks of an application being received. This will depend on when your application is received within the monthly cycle of future Investment Board meetings, the complexity of your proposed project, the quality and clarity of information in your application form and supporting accompanying information and your ability to respond to any requests for further information. During the application process Finance Birmingham will keep you updated with regard to the progress of your application.

What is the main scope requirement of the Fund?
The applicant must be seeking finance from the Fund to expand current products and/ or services provided to the rail supply sector or is capable of introducing crossover products and services into the rail supply sector.

What does a good application look like?
The applicant Company would need to clearly demonstrate how the funding sought from the Fund for the proposed project will enable them to be able to compete more effectively increasing their productivity, capacity and competitiveness within the rail supply sector leading to increased levels of employment and investment.

What level of security will be required?
Fund would seek a debenture from the applicant Company. To avoid this impacting on the facilities provided by your existing financial providers, we will work with them to establish the necessary priority in their favour and to their satisfaction. There may be circumstance where in addition personal guarantees may be required as further security. This would be dependent on the circumstances of the proposed project and applicant Company.

What is the cost of borrowing from the fund?
The rate of interest that we propose to charge a Company on a loan will be dependent on a number of factors specifically relating to the particular circumstances of the Company and its request for borrowing.  As the funding for the Rail Supply Growth Fund is sourced from government sources then the Fund will need to take account of these particular Company specific circumstances to ensure that the cost of borrowing is fully compliant with European Union State Aid rules and regulations, which take account of matters such as the level and type of any security that can be taken, the risk consideration of the Company in question, etc. Clearly these factors cannot be known without detailed knowledge of the Company and its request for funding.

Given the number of unknown factors relating to the Company and its request for borrowing, it is only possible to give a very general indicative rate of interest, which could be typically in the range 5-8% subject to further information being made available in due course. It is suggested that this range is used for business planning purposes, which may be adjusted following more detailed discussions with the Company.  In addition to this cost, a Company would also be charged up to a 1% per year monitoring fee and an arrangement fee of up to 2% – both of these costs are standard costs for such borrowing.