Advice You - Business

Finance for business can be obtained through a number of different sources.

Let's review some of those channels to help you decide what's right for your business needs:

Grants

There are over 930 different EU and UK grants and loans available from over 100 issuing bodies. This is the cheapest form of finance and an important part of the funding package that companies and ind

According to USFDA, a combination product is one composed of any combination of a drug and device; biological product and device; drug and biological product

ividuals need. We can help you find your way through this maze.

Technology

Micro Projects: 50% of eligible costs up to ?20,000
Research project: For a technical and feasibility study of an innovative idea for new technology 60% of costs up to a grant of ?75,000.
Development project: For developme

; or drug, device, and biological product and fixed dose combination would include two or more combinations of drug.

Examples of combination products may in

nt up to pre production 35% of costs up to a grant of ?200,000

Developing an innovative idea: valuable for small companies and individuals at the start of a technical project: 75% of costs of hiring a mentor and consultants.

Export

To start exporting or moving into new markets grants of 50% of costs up to ?20,000 each.

Training and Educatio

lude drug-coated devices, drugs packaged with delivery devices in medical kits, and drugs and devices packaged separately but intended to be used together.

Knowledge Transfer Partnerships, Achieving Best Practice in Your Business, Investors in People

Modern Apprenticeships

New Deal for various grants.

Environment

BOC Foundation for the Environment: 25% to 50% of Project cost, typically ?20,000 to ?100,000

Clean up Fund: Emission reducing equipment up to 75% of cost

C

here is enormous increase in the number of combination products entering the market in the recent years. Combination products have proven advantages but fixe

ommunity Chest Fund: Up to ?25,000 for projects near active SITA sites

High Impact Fund: ?150,000+ for larger projects near SITA sites

Assisted Areas

Regional assistance grants of between 10 and 35% for capital expenditure in less favoured areas of the UK.

Loans

Loans are an excellent source of finance

d dose combinations are still in the process of convincing regulatory authority on their advantages over the single ingredient formulations.

Combination pro

if you have suitable security to borrow against or a reliable earnings stream. This needs to be planned and presented well to obtain funds.

Credit cards

Provides up to 56 days free credit if you play the game!

Overdraft

Banks are surprisingly supportive when presented with a well thought through plan and competent management.

Bank Loans
ucts have become life saving products for the pharmaceutical companies who doesn’t have many innovative molecules in their product pipeline and have been inc
ng>

Lenders tend to look for a good business plan and security. Typically the loan is approved by a centralised back office function rather than the person you meet. Terms and rates depend upon the risk. Repayments can be very flexible to meet your specific needs.

Mortgages

These can include flexible repayment terms to meet your business needs. This can even be incorporated into y
easingly used in the product life cycle management. Even the companies having product patents are trying to extend their product life cycle through the combi
our overdraft finance so that you have one flexible account for both personal/ business mortgages and overdraft

Small Firms Loan Guarantee Scheme

Up to two years trading: Up to ?100,000

Over two years trading: Up to ?250,000

However these are difficult to obtain and are a loan of last resort.

Export Guarantee Scheme

This is government backed insurance against a
nation products and maximize the revenues. But the companies involved in this practice are overlooking that they are burdening the patients both economically
propriate export documentation.

Mezzanine

This is a halfway house between loan and equity. It can be an innovative way of raising funds for the more established business. Mostly for expansion capital.

Equity

This is not as easy as the papers would have you know. Only 1% of business plans received by Venture Capital Funds are successful. Howeve

and physically. They need to rightly judge the benefits of the combination products and they have to even look at the risks involved when combining the produ

r, a good business proposition consisting of a strong demand for the product or service, management track record and a sound financial plan will enhance the chance of success.

Business Angels

These are high net worth individuals who are successful businessmen looking for investment opportunities. They can provide both time expertise and money. Typical investment size is

ts. Some of the combination products were well accepted by physicians while others suffered. Companies involved in development of combination products are fi

?25,000 to ?250,000 but can go as high as ?2m for the right opportunity. Exit within 3-5 years.

Venture Capital

These are investment funds seeking high rates of return. However typically investments are over a million pounds. Some funds are targeted at lower amounts depending upon the sector and region. These funds are looking for exponential capital growth over 3-5 years.

ding difficulty in defining their combination products and facing various challenges from selecting a combination to marketing it.

Following aspects would a
quote> Asset backed finance

This can cover machinery, sales invoices even sales orders. It can be a very flexible source of finance to the growing business

Leasing

This will cover your capital expenditure and spread the cost over a three to five year period. It is particularly useful if you do not have taxable profits to maximise your capital a
dd to the challenges in developing combination products:

Which markets to tap where the combination products can do fairly well?
Which combination prod
llowances.

Sale and leaseback of a property you own is another good source of funds.

Factoring

Factoring offers a sales ledger administration and debt collection service. Up to 95% of an approved sales invoice is paid within 48 hours, quicker if required. Credit protection is also available to protect against a bad debt. The Factor will own and place a first charge over the book d
cts are meaningful and rational?
Which therapeutic categories to select?
Which Combinations can address unmet needs of the patients?
Do combin
bts and they might also take other charges, depending upon the strength of the financial information.

Invoice discounting

Invoice Discounting can be Confidential or Disclosed; it depends upon the strength of the financial information. The service is the same as Factoring, except that the sales ledger administration and the debt collection is the responsibility of the client and not
tions increase the patient compliance?
What would be the developing cost?
How to tackle the risks encountered during combination product developmen
the Factor. Pre payment of the approved sales invoice is still up to 95% and the factor will still have a first charge on the book debt and therefore own the debt. This service can also have credit protection cover. All sales invoices need to be for a business to business debt, and some proof of delivery is generally required.

Trade Finance

This is funding provided against stock p
t?

As combination products don't fit into the traditional categories of drugs, medical devices, or biological products, the USFDA is in the process of devel
rchases, signed contracts and orders whereby the funder will prepay a certain percentage of the value

Pension fund

It may be possible to use your pension funds for a loan back to the business

Business Relationship Funding

This is another source of funds that can be overlooked. It may be possible to introduce potential alliances to add value
ping new procedures for reviewing their safety, efficacy and quality.

Professional from academic institutions, pharmaceutical industries, health care indust
to both parties. It may produce an ultimate exit route in the medium to long term.

Joint Ventures: Requires a legal agreement embodying the deal and another company
Partnerships: Two companies collaborate with possible funding.
Joint working relationships: These are an informal partnership which may be
y and representatives from various regulatory agencies are working out to design the regulatory requirements for manufacture and sale of combination products
more project specific where the parties can share resources.
Agencies: These can be geographical or product specific and generally incorporates a payment for the right to the agency.
Distributors: Very like an agency but may not necessarily involve up front payment.
Alliances: These do not require a separate company and can be
.

As there is an increasing trend of the combination products companies manufacturing such products should be able to tackle the problems involved in the de
embodied by a legal agreement to work together.
Trade investors: Otherwise known as Corporate Partnering. This can be a good way to involve a much larger company in the business with a view to possible trade sale further down the line.
Associates: This can be a loose arrangement with no fundamental commitments either way, rather like a preferred suppl
elopment. They need to be wiser in analyzing the market trends and the regulatory requirements.

Companies that provide selfless information through particip
ier.
Equity Swop: Two companies exchange shares to a similar value to develop both businesses.
Franchises: This can allow the business to grow without further direct investment.
Licensing: This involves licensing a product or service to enable others to sell it. This requires you to own the intellectual property.

tion in industry events and feedback to regulatory authorities would be able to face the challenges and will be successful in developing combination products

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Advice You - Different Types of Funding

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