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Santander Breakthrough programme for SME's

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Santander's Breakthrough programme seeks to identify the best entrepreneurial companies in the UK and help them achieve their full potential. And here"s how they intend to do it.

Small and medium-sized enterprises (SMEs) are pivotal to the success of the UK economy.

According to Government statistics, SMEs account for 59% of private sector employment and almost half of commercial turnover. In short, SMEs are vital in terms of job and wealth creation.

Seeded within the SME sector are the economic giants of tomorrow. These are the companies that are not only trading successfully, but also growing rapidly. Such star performers have the potential to become major players in their industries, employing perhaps not just tens or hundreds of people but thousands as their businesses expand. Santander"s "Breakthrough" programme is designed to help businesses like these fulfil their potential.

Who is the Breakthrough programme aimed at?

The Breakthrough programme is aimed at businesses that have advanced well beyond the start-up stage to achieve a turnover of between £500,000 and £10 million per annum while posting growth of 20% or more in turnover, profit or employment.

Ironically, it is entrepreneurial companies like these, led by strong, ambitious management teams and underpinned by carefully considered growth strategies, that most often struggle when it comes to accessing funding and resources. Those of you who have led companies through a period of expansion will know that ramping up capacity, building market share and breaking into new markets usually requires not only financial support but also knowledge and skills that may not be available within your organisation. And here"s where the Breakthrough programme comes in.

Under this initiative, Santander seeks to identify and support successful, fast-growth SMEs as they work to break through to the next level. Funding is an important part of the package. Over the next few years, we aim to make £200 million available for investment in businesses that we see as "Growth Champions". We will also ensure that any company selected for the programme will have access to some of the best advice and talent available, including businesspeople who have already established their own companies as market leaders on a national and global stage.

What does this mean in practice?

All companies selected to take part in the Breakthrough programme will have access to our Growth Capital team to discuss how best to support their aspirations. Although managed at a divisional level by Santander, the selection of our Growth Champions will be made in collaboration with universities, successful entrepreneurs and with business intelligence provider Experian. Our selection criteria are exacting. We"re looking for the very best businesses in each region, regardless of their current banking partner. The growth capital loan facility is a vital component of the scheme as a whole. Essentially, we aim to help SMEs plug the funding gap.

According to the recently published report lead by former 3i executive Chris Rowlands, The Provision of Growth Capital to UK Small and Medium Sized Enterprises, as many as 5,000 SMEs currently require growth capital, with businesses needing sums between £2-10 million among those struggling the most. The report cites several reasons for this.

Venture capital and private equity funds rarely consider investments of less than £10 million, while funding from business angels is difficult for amounts above £2 million. Elsewhere, even fast-growth companies may feel that debt finance in the form of a conventional term loan would be too great a drain on their finances. Recognising these difficulties, Santander is making finance available in the form of a subordinated growth capital loan, structured to minimise the impact on cashflow.

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