Commercial Finance

31/10/2019
Commercial Finance

VC funds with preference shares go to platforms to cut risk

The Sunday Times reports that thousands of investors who backed car-parking app JustPark on Crowdcube could lose out to venture capitalists if the firm is sold below a certain price because the funds will receive their investments back on preferential terms. An investment pitch containing information on the JustPark funding made no mention of the preference shares, according to a copy seen by the Sunday Times. But a source close to JustPark said that information was available at Companies House via a link on the Crowdcube investment page. Amir Tayebi at corporate finance specialist Adam Street Advisers says the use of preference shares is becoming more common as investors seek to reduce the risk of backing start-ups.

The Sunday Times

 

NatWest joins lenders pledging continued Brexit support

As the European Council meets today to discuss a number of important issues including Brexit, and the signatories of the SME Finance Council are announced, NatWest has outlined its ongoing Brexit support, including the increase in the Growth Funding Package, and the launch of a series of Customer Events covering Brexit. NatWest has built on the success of its £6bn Growth Funding initiative, having increased it and offered £8.2bn in facilities, and reaffirmed its continued commitment to supporting customers through Brexit by becoming a founding signatory to the Government’s new SME Finance Charter.

NatWest, Press Release

 

Sancus announces Graham Sheward as new MD of Sancus (IOM)

Sancus BMS Group has announced that Graham Sheward will replace Michael Hennessy as Managing Director of Sancus (IOM) Limited in October 2019. The appointment follows Michael Hennessy’s move from Managing Director to Chairman of the Company. Graham will be responsible for leading the Company’s business strategy and growth and will be a member of the Group’s Executive Committee.

Sancus, Press Release

 

Bridge Invest welcomes three new key hires

Bridge Invest hired three new key hires in October, as part of their ongoing commitment to growth plans for 2020. Erbil joins as an experienced Business Development manager from PBF Investments. Ross Laurie, who worked at LendInvest, joins as a Credit Analyst and George Durrant joins as a Loan Monitoring Officer.

Bridge Invest, Press Release

 

Lendhub complete £4.5m ‘stretched’ development loan

Lendhub have assisted a borrower who required refinancing of existing debt and 100% development funding to develop their vacant commercial office in Richmond upon Thames. Having negotiated an agreement to lease the property with a bluechip tenant upon completion, the opportunity to develop was very evident. Lendhub were able to assist with their development stretched product which allows extra leverage, up to 70% LTGDV. The loan was advanced for a term of 14 months and was completed within three months at a rate of 0.85%pm.

Lendhub, Press Release

 

REGULATION AND COMPLIANCE

Labour eyes more tax from tech giants

A Labour government would launch a £14bn tax raid on multinationals such as Amazon, Google and Apple, the party has said. Shadow chancellor John McDonnell is drafting plans to prevent such firms from using “arm’s-length” arrangements that allow them to pay tax in countries with lower rates. A new report from Tax Justice Network adviser Professor Sol Picciotto and Daniel Bertossa details how companies would be taxed on the basis of where their sales, assets and workforce are located and not where they have decided to book their profits. The plan would treat multinationals as one company, rather than continuing to allow subsidiaries in different countries to pay each other loans, transfer profits and assign intellectual property rights to spread liabilities to low tax jurisdictions. The £14bn figure could increase when Labour raises business taxes further.

The Sunday Times

 

Lessons from the Woodford fiasco

The Times suggests five changes on the back of the Neil Woodford scandal. Gina Miller of SCM Direct calls for an independent root-and-branch review into the Financial Conduct Authority, which has been accused of failing to alert the market to the risks of the lack of liquidity in Woodford’s Equity Income fund. Miller also thinks whistleblowers need to be protected and encouraged while Baroness Altmann says the FCA should be given more powers to prevent funds getting into trouble. Meanwhile, Ian Sayers of the Association of Investment Companies says that he would like the fund industry to move to a system of “reliable redemption” where the terms on which investors can sell is fixed at the outset and cannot change.

The Times

 

Pension firms resist over compensation payouts

Pension companies are resisting calls to begin settling compensation payments for pensioners whose “guaranteed minimum pensions” were calculated at different rates after the High Court ruled the practice illegal last year.

Financial Times

 

LENDING CONDITIONS

Softbank injects another £510m into Greensill

Softbank is set to inject another £510m into British online finance firm Greensill ahead of its expected purchase of FreeUp, a technology company that should enable the firm to offer ordinary workers early payment of their wages. Until now Greensill specialised in providing small and medium-sized businesses with access to so-called working capital finance to run their day-to-day operations. Earlier this year SoftBank invested £625m in Greensill for less than 10% of the business. The latest investment values Greensill at around £3.1bn.

The Mail on Sunday

 

 

BUSINESS NEWS

QuickQuid owner collapses into administration

Payday lender QuickQuid is folding after its owner, Enova, failed to reach agreement with the UK’s financial ombudsman over how many customers it should compensate over past loans. CashEuroNet UK, which operates the QuickQuid and On Stride brands, stopped lending after Grant Thornton was appointed as its administrator on Friday. Payday lenders have been struggling after the Financial Conduct Authority imposed affordability checks and capped payday loan charges in 2014. John Cullen, business recovery partner at Menzies, said: “For former customers, who feel they have been taken advantage of and are in financial hardship, the future is still uncertain, as the value of any compensation payouts will now depend on the process of closing the company. What is clear is that in the face of growing regulatory pressures, the curtain appears to be drawing on the payday lender market.”

The Guardian Daily Mail The Press and Journal

 

Johnson set to give Huawei 5G nod

Whitehall sources say Boris Johnson is planning to grant Chinese firm Huawei access to Britain’s future 5G telecoms network, endorsing a controversial decision by predecessor Theresa May. The company will be given access to the “non-contentious” parts of the network, but this is still expected to upset the US, where Huawei has been banned over concerns it is too close to Chinese intelligence agencies.

The Sunday Times

 

SME NEWS

Apprenticeship levy hampering SME training schemes

The Learning and Work Institute has warned that the Government’s apprenticeship levy could actually be contributing to 75,000 fewer training schemes being provided by SMEs. The employment and skills charity found that three-quarters of apprenticeship providers which worked with small businesses reported that there was insufficient funding to meet demand, “with many being forced to reduce or cease recruitment as a result”. The shortfall is due to large employers using more of their levy funds than expected, leaving only half as much money as was thought to help smaller companies to train workers.

The Times

 

Havisham and Salesforce acquire stake in Snoop

Havisham, the investment vehicle owned by Lord Brownlow, has bought a £5m share in Snoop – the tech start-up founded by ex-Virgin Money chief executive Dame Jayne-Anne Gadhia. Snoop is designed to exploit open banking to automatically transfer consumers to better utility and financial services deals. Salesforce Ventures also pitched in with funding.

City AM

 

ECONOMY

Surveys expected to show Brexit dampening UK economy

A series of surveys this week are expected to show the weight of Brexit uncertainty on the UK economy. The CBI’s distributive trades survey is expected to show retailers struggling while the GfK consumer confidence survey will indicate household gloom over economic prospects. The PMI for manufacturing will on Friday show the sector in recession, the Sunday Times reports. Finally, a new assessment of the economy by the ratings agency S&P predicts growth of just 1.3% a year over the 2020-22 period. Britain’s outlook remains negative due to “the risk of sustained economic weakness”, S&P said.

The Sunday Times

 

CIOT issues budget warning for Scotland

The Chartered Institute of Taxation (CIOT) warned on Friday that a delay to the UK Budget will put Scotland’s Finance Secretary Derek Mackay in a “tight corner” when it comes to planning Scotland’s finances for the next year. Mr Javid said his Budget planned for 6 November will not go-ahead as the UK government pushes for a 12 December election. The CIOT said this will hinder Scotland, with Mr Mackay due to issue his spending plans on 12 December.

The Scotsman

 

OTHER NEWS

Sajid Javid pauses production of Brexit 50p coins

The Chancellor has put the production of the new Brexit 50p coins on hold due to the fact the UK is unlikely to leave the EU on October 31st. Three million coins – imprinted with the Brexit date of 31 October – were planned to be ready to spend by the end of the month.

The Daily Telegraph City AM

 

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