The most important element of sustainable growth in the British economy is the SME sector. Research has shown that just 10% of small companies, most of which have turnovers of less than £25 million, create two-thirds of all the jobs created by SMEs. At Santander, we call them ‘growth champions’, and they include our business customers, such as:
- I Like Music, a web based music search library launched eight years ago, now employing 15 people, with £2.5 million in revenue
- Ridgway Machines, a 100-year-old Leicester-based engineering company which designs hi-tech specialist machinery, such as the insulation tape for the Large Hadron Collider. You can watch their video here: www.youtube.com/santanderukcb
- And Vital Ingredient, set up in 2001 to provide a healthy alternative to bread-based fast food lunches, grown into a cross-London chain by ambitious founder Alex Heynes.
Helping companies like these to realise their potential is critical to restoring sustainable long-term growth to the UK economy.
However, as these companies grow, they can hit a glass ceiling of finance – investors want too big a slice of their company in return for funding their growth with equity – and most banks simply won’t lend to them at all because they often have too much debt.
More than money
This is why Santander put in place its Breakthrough programme, which includes an innovative kind of finance that allows entrepreneurs to keep ownership of their business. For example, we gave the three companies mentioned above over £2.3 million from our ‘Growth Capital’ funding – plus another £3 million in traditional bank lending, which helped them to create more than 180 new jobs.
But companies often need more than just money, and our programme also provides that extra support, with access to a range of resources and knowledge, including Masterclasses with the world’s top companies, such as Google; fact-finding overseas Trade Missions; and a range of live events.
Our research shows that just 1 in 10 students are thinking of setting up their own business. And, for female students, the figures are even lower. At Santander, we are trying to do our bit to address this. Last year, we funded 500 graduate internships to work for three months in a small company – in collaboration with nearly 70 partner universities in the UK – and, this year, I am pleased to announce that we will fund 1,500.
In addition, we will provide over 2,000 more scholarships and grants to UK students. But, great as this is, it’s just a drop in the ocean.
So I throw down this challenge. What can we do to spark a spirit of enterprise in our young people? Internships, apprenticeships, partnering with universities, mentoring aspiring entrepreneurs – all these things will help to kindle energy and dynamism.
Britain has great businesses, great values, great people. And all this adds up to great potential. Let’s stand up for the values of enterprise, for the values that fuel prosperity, and encourage our young people, not simply to believe in these values, but to make them real.
To find out more about Santander’s Breakthrough programme and to see if your business is eligible to apply, go to: www.santanderbreakthrough.co.uk
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