Despite the global economic turmoil caused by coronavirus, Business Durham has helped businesses grow through innovative grants. PETER BARRON reports

In the midst of a pandemic that has wreaked economic havoc across the globe, it would be easy to be left with the impression that every business has been devastated.

But Sarah Slaven, managing director of Business Durham, is keen to counter that false impression of blanket negativity.

County Durham has, inevitably, suffered its business casualties, especially in the hospitality sector, but there is also no shortage of companies that have successfully adapted – and some that have expanded despite the economic turmoil.

And Sarah and her team can look back with justifiable pride at the way Business Durham – the economic development arm of Durham County Council – has supported businesses throughout the pandemic.

In particular, two funds administered by Business Durham – the County Durham Growth Fund and Finance Durham Fund – have played critical roles in helping business to not only survive the crisis but grow.

“There’s no doubt that it’s been a strange and challenging year, with lots of hardship. But the idea that you sometimes get from the national media that it’s all been doom and gloom couldn’t be further from the truth,” says Sarah,

“We have still seen companies with existing expansion plans – that were maybe paused briefly when the pandemic first took hold – being able to implement them during the year. We have been delighted to see a pipeline of businesses coming forward to create jobs, and that sends a really important signal for the future.”

The County Durham Growth Fund is an £8.9m scheme providing capital grants to small and medium sized County Durham businesses to accelerate their growth. Over the past year, the fund has invested £2m in 12 companies – and new jobs has been the result.

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Filtronic, which makes transceivers and RF conditioning products for the telecoms and defence markets from its base at NETPark, near Sedgefield, is one of those companies, receiving a grant of £150,000 towards a £1m expansion project.

And Filtronic’s Chief Financial Officer, Michael Tyerman, describes the cash injection from the County Durham Growth Fund as the “springboard” to the success of the project which has led to the creation of 20 additional jobs.

“It made all the difference,” says Michael. “We looked at a range of different investment scenarios and the £150,000 from the County Durham Growth Fund enabled us to reduce the payback period and de-risk the project.

“The project represented a large investment for a company of our size and the grant definitely helped to nudge it over the line.”

Not only has the contribution from the County Durham Growth Fund been pivotal in enabling the 2020 expansion to go ahead, it is likely to have a knock-on effect on top line growth in 2021 and 2022.

“The project exceeded our expectations and, due to the extra capacity and capability it gave us, we are now in a position to look at a further expansion,” says Michael.

“Business Durham has been incredibly supportive. They made us aware of the grant in the first place and without that support, we could not have been as successful as we have been during the pandemic.”

Meanwhile, the Finance Durham Fund has invested almost £1m in businesses over the last 12 months. The £20m investment fund – overseen by Business Durham and managed by Maven Capital Partners – was established by Durham County Council in 2017 to help businesses to grow in or move to the county.

Over the past year, the fund has invested in four businesses: online insurance disruptor Honcho; solar technology company Power Roll; fintech firm Growth Capital Ventures andremote technology company Plexus Innovation.

In Honcho’s case a £151,000 investment was used to support the technical integration of insurers to its platform, recruit two new employees, and fund user acquisition marketing as part of its growth strategy.

The investment was a crucial part of the company’s latest round of investment that brought a further £1.2m into the business, with more than 600 crowd investors and Insurtech Gateway making up the rest. It enabled Honcho to launch a second product for commercial van insurance as part of an ambitious growth strategy.

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“It was extremely helpful because we were trying to complete the funding round at the point of the horrid realisation of how bad the pandemic would be,” says Honcho’s chief executive, Gavin Sewell.

“In fact, we were due to complete the investment round on the day the stock market hit the floor. It was an incredibly stressful time, and we did have a couple of angel investors disappear because they were too nervous of the economic environment. But having that nailed-on contribution from Business Durham made a massive difference.”

The company, based at Salvus House, at Aykley Heads, in Durham City, had received two earlier investments via the Finance Durham Fund – in February 2018 and September 2019 – and Gavin describes the continued support of Business Durham throughout Honcho’s evolution as “utterly invaluable”.

Both the County Durham Growth Fund and Finance Durham Fund are sure to go on playing a vital role in the county’s steps towards economic recovery in 2021.

“A lot of companies had to use cash reserves to get through 2020, so having access to a grant or investment could tip the balance when it comes to making decisions about further expansions,” says Sarah Slaven.

“With every success that becomes public, the more confidence it spreads to other businesses. We know there are some exciting projects in the pipeline for 2021, and it’s our job at Business Durham to do whatever we can to help them become a reality.”