A Birmingham automotive supply chain firm has secured £250,000 of funding after winning a deal to supply the new Baby Range Rover.
Sheldon-based Mechatronic Production Systems has secured the funding offer from Business Link West Midlands, Birmingham City Council and Investbx to help with a short-term problem.
The company, which employs 16 skilled workers, successfully completed a UK and European-wide tender to supply machinery to International Automotive Components Group’s Birmingham plant for use in producing interior mouldings for the new baby LRX model, which is being made at Jaguar Land Rover’s Halewood plant, in Merseyside.
The nature of the contract – worth a minimum of £500,000 – meant the entire project had to be financed up front, dictating the need for Mechatronic to raise significant finance against a backdrop that was not particularly supportive of the manufacturing sector.
Founder and managing director Richard Evans said: “Despite preparing a compelling case and going to the banks and the market for conventional finance, it was simply not available and we had to better understand our options so that we did not miss this opportunity.
“We had been working with Business Link for many years so met with adviser Mike Falconer, who identified areas where we could improve our business plan and then brought in Mazars to advise on financial forecasting, modelling and raising the required capital.
“They introduced us to Investbx, who administer Birmingham City Council’s loan fund for businesses. The feedback was immediately more positive than the banks.”
Mechatronic has managed to bounce back from a tough period to win new orders for the medical and business equipment industries in recent months, restoring turnover to the £1.7 million levels seen in 2009.
The latest funding boost came after an assessment of its business case and returns on investment.
Having this additional money in place means the company can start and complete the contract, safeguarding existing jobs and creating up to seven indirect positions in the local supply chain.
Mr Evans added: “This is excellent news for the business and helps us to continue our recovery after the manufacturing downturn of 2009.”
Mechatronic, which was established in 1989, specialises in providing bespoke machinery for first tier suppliers in the automotive, building, medical, security and general engineering sectors.
Business Link’s Mike Falconer said: “We all know that the current squeeze on credit can stop a lot of excellent businesses from taking advantage of new opportunities so I’m delighted that we’ve been able to work with Richard and the team to find an alternative solution that meets their needs.”
Birmingham City Council launched the £10 million Business Loan Fund in January 2010 to offer a package of loans to solid and profitable SMEs who have previously been unable to access funding. The initiative is administered by Investbx and has so far delivered £2 million of finance to 10 companies in and around the City Centre.