Capital Grant Scheme application guidelines 1. Purpose This guidance is designed to support you in completing the application form for the Capital Grant Scheme. If you require further assistance you may telephone or email us as follows: Tel: 01642 939386 Email: TVBSS@be-group.co.uk It is important that all information provided is accurate and given in as much detail as possible, as failure to do so may result in the application being declined or delays in the assessment process. 2. Background The Capital Grant Scheme is part of the Tees Valley Business Support Scheme. The scheme is delivered by BE Group in partnership with UNW LLP, on behalf of the SSI Taskforce and Tees Valley Unlimited. Funding for the scheme is provided by the Department for Business, Innovation and Skills, via Stocktonon-Tees Borough Council. The scheme provides grant support to eligible businesses (see Section 5 below) to undertake capital investment projects involving eligible expenditure (also see Section 5 below) which are designed to expand or diversify the business, leading to sustainable growth and the creation of employment. Applicants may receive grant offers provided they meet the eligibility and assessment criteria outlined below. Decisions to award or not to award grants are at the absolute discretion of BE Group, in consultation with Tees Valley Unlimited and other public sector bodies that may be appropriate, and there is no obligation on BE Group to provide grants. Applicants must in all cases provide a convincing explanation of why a grant is required to enable the project which is the subject of the grant application to go ahead. Applications may be rejected where there is evidence to suggest that the project could go ahead without grant support. 3. Application process Grant applications may be submitted by the business that requires the grant or by a professional advisor on their behalf. If submitted by a professional advisor, we will also require a primary contact at the business that requires the grant. Businesses may apply to the Capital Grant Scheme more than once. Where a grant offer has already been made, second and subsequent applications will only be accepted if the project which was the subject of the first application has been successfully delivered or is on 1
schedule, with all milestones and outputs specified within the grant offer letter either already met or on schedule to be met. Decisions to award or not to award grants are at the absolute discretion of BE Group, in consultation with Tees Valley Unlimited and other public sector bodies that may be appropriate. Applications will be assessed against the criteria set out in Section 9 below and all applications will follow a four stage process, as follows: Stage 1: Applications must be made using the Capital Grant Scheme application form available on the following web link: www.be-group.co.uk/services/commercial-development-programmes/tvbss/ Hand written application forms cannot be accepted. Application forms must be fully completed and must be accompanied by all of the supporting information specified on the application form. Applications will not progress to stage 2 of the process until all the required information has been received by BE Group. Stage 2: Applications will be assessed by BE Group (and UNW LLP chartered accountants, in the case of applications from SSI UK supply chain companies for grants of 50,000 and over). Applicants will be contacted by telephone for any clarification which may be required and in some cases a visit may be arranged. Stage 3: Applications will be considered by an Investment Panel comprising senior representatives of the Tees Valley business community, senior staff of BE Group, Tees Valley Unlimited and UNW LLP, with representation from the Department for Business, Innovation and Skills in an observer role. Stage 4: Applicants will be notified of the outcome of their application by email and a grant offer letter will be issued to successful applicants. Applications may be rejected at either Stage 2 or Stage 3 above if either the business or the proposed project or activity or both are deemed to be ineligible or if the assessment criteria outlined in Section 9 below are deemed not to have been met, based on the information provided by the applicant. Decisions to award or not to award grants are at the absolute discretion of BE Group and are final. There is no right of appeal, but applicants may re-submit an application in certain circumstances (see Section 10 below). If you have not already done so, we strongly advise you to telephone our helpline on 01642 939386 before completing an application form. This will enable us to establish your eligibility for the scheme before you commit time to filling in the application form. 4. Geographic location To be eligible for this scheme, an applicant business must either be a UK-based former SSI UK supply chain company or must be applying for grant support for a project located within the Tees Valley, in one of the following 5 local authorities: 2
Darlington; Hartlepool; Middlesbrough; Redcar & Cleveland; or Stockton-on-Tees. Former SSI UK supply chain companies may be based anywhere within the UK. 5. Eligibility 5.1 The scheme may be used to support businesses in most manufacturing sectors of the economy and service sector businesses which offer more than a local service. Businesses in the agriculture and fisheries sectors are not eligible (see Section 8 below). Businesses in the road freight transport sector are eligible for lower levels of funding than other eligible sectors (see Section 8 below). Where the business operates wholly or mainly within a local market, the applicant must demonstrate that the proposed project will have no negative effects on competitors. 5.2 Retail projects (including online retail) are not eligible for support. 5.3 Projects seeking a grant must be designed to achieve sustainable business growth by the applicant company, leading to the creation of at least two new jobs or the safeguarding of at least two existing jobs that would otherwise be lost within the applicant company. 5.4 Projects must comply with the De minimis aid regulation (see Section 8 below). 5.5 Projects must involve capital investment in tangible assets to grow the business and lead to new jobs or the safeguarding of existing jobs that would otherwise be lost. 5.6 Certain types of revenue expenditure may be included within applications, up to a maximum of 20% of the total eligible project expenditure, where this revenue expenditure relates directly to the investment project and the employment impacts, and where it also helps to enable the business growth. 5.7 Project assets acquired with the grant may be new or second-hand, but must be acquired from a third party unrelated to the business making the grant application. Assets acquired (including by leasing) from a supplier that is directly connected to or part of the business s own business (including a holding company or a subsidiary company); and/or whose directors, employees or advisers are engaged directly or indirectly with the business are not eligible. 5.8 Projects must not have commenced before a grant application is submitted to BE Group and no expenditure must be committed to or defrayed until a grant offer has been issued by BE Group. 3
5.9 Projects must involve eligible expenditure of at least 20,000 in the case of former SSI UK supply chain companies, or 33,000 in all other cases. Eligible activity could include any of the following (the list below comprises examples only and is not exhaustive), notwithstanding the restrictions outlined in paragraphs 5.1 to 5.7 above and 5.9 and 5.10 below: land and buildings, including the purchase or lease (see paragraph 5.9 below) of larger premises; premises extension and re-fit; plant, equipment and machinery; R&D expenditure (see paragraph 5.11 below) (subject to 20% ceiling applicable to revenue costs); training (subject to 20% ceiling applicable to revenue costs); consultancy and other external costs (subject to the 20% ceiling applicable to revenue costs); wage costs of new employees (see paragraph 5.10 below) 5.10 Premises leases must last for a minimum of 3 years following the completion of the investment project. Premises leases are not subject to the 20% ceiling applicable to revenue costs, as described in paragraph 5.5 above. 5.11 Wage costs (including employers NI contributions) of new employees may be capitalised over a period of two years from the date of recruitment and may be used as the eligible project expenditure instead of expenditure on capital assets. Wage costs may not be combined with expenditure of any other type within an application. Wage costs are not subject to the 20% ceiling applicable to revenue costs, as described in paragraph 5.5 above. 5.12 R&D expenditure may include the following: materials and consumables utilised for the R&D; depreciation of capital assets used for the R&D; consultancy and subcontract costs in relation to the R&D; and labour costs. 6. Levels of grant support available The scheme will provide a maximum contribution of 50% of the eligible project expenditure in the case of former SSI UK supply chain companies, or a maximum of 30% in all other cases. The minimum grant that can be applied for is 10,000 in all cases and the maximum is the De minimis threshold (see Section 8 below) in the case of former SSI UK supply chain companies, or 49,999 in all other cases. 7. Project timescales Projects or activities must be complete, with all expenditure incurred and defrayed by 31 st March 2018. Project jobs must be created or safeguarded as applicable by 31 st March 2018. 4
8. State Aid Grants awarded through the scheme are State aid and are awarded under the De minimis aid regulation (EU Commission Regulation no. 1407/2013 of 18 December 2013 on the application of Articles 107 and 108 of the Treaty on the Functioning of the European Union). This regulation imposes certain restrictions on which are applicable to this Scheme, as follows: 8.1 Businesses in the agriculture and fisheries sectors are not eligible. Business in the road freight transport sector are eligible for lower levels of funding than other eligible sectors; 8.2 The maximum funding any business can receive is 200,000 over a 3-year fiscal period ( 100,000 in the road freight transport sector). The Sterling equivalent is calculated using the European Commission exchange rate applicable on the date of the grant offer letter; 8.3 The above ceilings apply to the total amount of De Minimis aid to a business (or group in the case of businesses which are not autonomous). Applicants to this Scheme are required to declare all public funding received during the previous 5 years and to specify how much of this was De minimis aid received during the previous 3 fiscal years; 8.4 When offering a grant through this Scheme, BE Group must ensure that the new award does not breach the applicable ceiling, taking into account all De minimis aid received by the applicant during the previous 3 fiscal years. Grant offer letters issued by BE Group will specify the amount of De minimis aid being offered. BE Group must keep records of all De minimis aid paid for 10 years from the last payment. Beneficiaries must keep records of De minimis aid received for 3 years and must declare this when required to do so by other grant giving bodies. For further information, please read the De minimis regulation: http://ec.europa.eu/competition/state_aid/legislation/de_minimis_regulation_en.pdf 9. Assessment criteria After establishing eligibility in accordance with Section 5 above, all Capital Grant Scheme applications will be assessed against the following criteria before any grant offer may be made: 9.1 Case for grant support (additionality). Applicants must demonstrate that a grant is required for the proposed project or activity to go ahead and must explain why this is the case. The required amount of grant must be justified and applicants must explain how they have calculated the amount they are requesting. Where applicable, the impact on the business of the SSI closure will be assessed in and consideration will be given to the scale and timing of the businesses involvement in supplying SSI. 5
9.2 Value for money. The project must offer good value for money in terms of the number and quality (skill level and salary) of new jobs to be created or existing jobs to be safeguarded in relation to the amount of grant requested. 9.3 Employment impacts. The application will be assessed on the number and quality (skill level and salary) of new jobs to be created or existing jobs to be safeguarded by the project. Applicants must demonstrate that the job impacts will arise as a result of the project. All project jobs must be permanent and sustainable (lasting for a minimum of 3 years) and applicants must demonstrate that the growth triggered by the project is sufficient to maintain the jobs within the business. 9.4 Appropriateness and suitability of the proposed project. The proposed project must: 9.4.1 enable sustainable growth by the business; 9.4.2 fit with strategic development objectives of the business. These objectives must also be identified within the application; 9.4.3 be appropriate for the size of business and its industry sector. 9.5 Potential impact on competitors (displacement). Applicants must demonstrate that they have considered the impact of the proposed project on their competitors and we must be satisfied that there is a low risk of significant negative impacts if the project goes ahead. 9.6 Viability. The business making the grant application must be viable and must have, or be able to obtain, adequate finance for the project (including external finance if required) and for the working capital requirements of the business. Applicants must demonstrate that the proposed project will enable sustainable growth by the business such that the current jobs and any new jobs to be created as a result of the project can be maintained for a minimum of 3 years following completion of the project. 9.7 Deliverability. Applicants must demonstrate that: 9.7.1 the management team has the required skills and experience to enable the project to be delivered successfully; and 9.7.2 the project must be capable of being completed within the timescales outlined in Section 7 above. 10. Procedure for re-submitting an unsuccessful application Applications that are rejected at either Stage 2 or Stage 3 of the application process, as outlined in Section 3 above, may be re-submitted in the following circumstances only: 10.1 where the Project has changed fundamentally, or 10.2 where there is new information available which materially alters what was previously presented in the grant application. 6
11. Guidance on completing the application form Section Title Guidance 1. Business Name Please use the full name as registered on Companies House or with HMRC. Legal Status Please add the legal status of your business, e.g. Limited Company, Partnership, Sole Trader etc. Company Registration Please add the number as listed on Companies House. No. Date of incorporation or date started trading Sector Please enter either the date the business was incorporated on Companies House or the date that the business issued its first invoice. Please state the sector that describes your business e.g. Manufacturing. 2. Trading Address Please state the address where the main business activity takes place. 3. Last Approved Annual Accounts Please state the figures for that last fully approved accounts. Turnover and balance sheet figures should be stated in Pounds sterling in full, e.g. 100,000. Employees should be stated as full time equivalent. A full time employee is a minimum of 30 hours and a part time employee is no less than 15 hours per week. Names of Directors and shareholders should be as listed with companies house or as stated in any partnership agreements. 4. Group Accounts If your business is more than 25% owned by another business it is classed as being part of a group. If this applies to your business you will need to provide details for the group. Turnover and balance sheet figures should be stated in Pounds sterling in full, e.g. 100,000. Employees should be stated as full time equivalent. A full time employee is a minimum of 30 hours and a part time employee is no less than 15 hours per week. Please state the group name as it is registered. 5. Shareholders If your business is classed as part of a group please enter the details as registered. Please state the country in which the controlling company is registered. Please list any other businesses that are under this controlling business. Please list any other businesses that are controlled by any of the shareholders. 6. Business Overview Please give a brief history of your business and describe its main activities and markets. 7
Section Title Guidance 7. Main Contact Details These contact details should be for the person within the business who is able to, and has the authority to, answer any questions relating to this application. Please also provide contact details for your professional advisor, if you are using one. 8. Impact of SSI closure (if applicable) 9. Current financial position and future plans Please answer these questions only if you were formerly within the SSI UK supply chain. Provide a breakdown of your turnover over the last 3 years showing how much related to business from SSI UK. Describe in as much detail as possible the impact of the SSI closure on your business. Please enter the total amount of cash that the business is holding across all its bank accounts and should be stated in Pounds Sterling in full e.g. 100,000. If applicable, list any bad debt arising from the SSI closure. Please provide a breakdown of all external funding currently available to the business, plus any additional funding you intend to seek. Please indicate the funding you intend to use for the project which is the subject of this application. Please provide brief details of the financial reporting systems and controls which are in place within the business, including procedures for setting budgets (where applicable), level of review of monthly management accounts, regularity of management and board meetings and KPIs used in the business etc. 10. Location of Project If you were formerly within the SSI UK supply chain, the project may be located anywhere in the UK, but if not, it must be located within the Tees Valley (see Section 4 above). If the project is intended to be completed at a different address e.g. a local office not the main unit, then please state in full this address including the full postcode. 11. Project Dates Please state the anticipated start and end dates of the project you wish to complete. Projects or activities must be complete, with all expenditure incurred and defrayed by 31st March 2018. Project jobs must be created or safeguarded as applicable by 31st March 2018. 12. Description of Project Please describe the proposed project or activity in as much detail as possible and how this will help your business to grow, for example: what is going to take place? why how was it identified? how does it fit into the strategic plan for your business? what barriers will it help you to overcome? The total cost of the project must be a minimum of 20,000 if you were formerly within the SSI UK supply chain or 33,000 if not. All costs must be shown excluding VAT. 13. Size of premises Please indicate if the project will involve acquiring larger premises. 14. Breakdown of expenditure Please provide a breakdown of all the expenditure, both capital and revenue, involved in the project (excluding R&D). 8
Section Title Guidance 15. R&D Please indicate if the project involves R&D and if so provide a description of the activities and the anticipated benefits. 16. R&D expenditure If applicable, please list the eligible R&D costs (see Section 5 paragraph 5.11 above) 17. Grant amount The minimum grant that can be applied for is 10,000 in all cases and the maximum is the De minimis threshold (see Section 8 above) in the case of former SSI UK supply chain companies, or 49,999 in all other cases. The scheme will provide a maximum contribution of 50% of the eligible project expenditure (excluding VAT ) in the case of former SSI UK supply chain companies, or a maximum of 30% in all other cases. 18. Financial Impact Please describe what impact you expect the project to have on the business finances e.g. this will increase turnover by 15% or will increase the profit by 10%. Please be realistic in these estimations. Plan achievements Please describe how the grant will enable your business to achieve these improvements. You must provide a convincing explanation of why a grant is required to enable the project or activity to go ahead and also of how the amount of grant you are requesting has been calculated. Risks Please describe realistically the risks to your business in the next few months e.g. new contract is not won, new contract requires large scale investment in machinery. Without grant support Please describe what would happen if you did not receive this grant. Please explain the impacts that this would have on the finances, staffing and the business in general. Your application will be rejected if there is evidence to suggest that the project or activity could go ahead without grant support. 19. Market Information Please list your main competitors in relation to the project activities i.e. if your project involves expanding into the manufacture of a new product line, you should list the companies which currently manufacture that product line with which you expect to compete in the future. Please explain what effect your expansion is likely to have on your competitors. 20. Financial projections Please provide a simple Profit and Loss for your business with and without the Project. Please ensure that these forecasts are realistic and reflect the values stated in earlier sections. 21. Job impact Please state the number of jobs as full time equivalents e.g. 5 part time employees of at least 15 hours equates to 2.5 full time equivalents. Please state how many FTE you feel are at risk within the next 6 months. You may be asked to provide further evidence of how you calculated this. Please state how many jobs would be safeguarded as a number of FTE as a result of the project. You may be asked to provide 9
Section Title Guidance evidence to demonstrate how this has been calculated. Please state for each job created or safeguarded the job title, the basic salary (lowest if it is a range) Please state the total number of each type of role. 22. Previous Public Funding Please list all public funding received during the previous 5 years (by all companies within the group, if your business is part of a group as per question 4 above) and specify how much of this was De minimis aid. See Section 8 above. 23. Checklist Please ensure that all the applicable listed documents are included with your application as failure to do so could result in the rejection of your application or a delay in the processing of your application. The De minimis declaration form will be sent to you with your application form however a copy can also be downloaded from www.be-group.co.uk/services/commercial-developmentprogrammes/tvbss/ 24. Declaration Please ensure that all declarations are clearly marked with an X as proof that you have understood each section. If you are unsure then please contact us on 01642 939386 to discuss. If you require further assistance you can either telephone us on 01642 939386 or email us at TVBSS@be-group.co.uk. 10