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30 July 2004
Evening Times
Sweet firm tastes success

A loan fund for young Scots in business, helped set up by serial entrepreneur Tom Hunter, celebrated its second anniversary with an awards ceremony for Scottish companies.

And Glasgow entrepreneurs, Simon Coyle, 28, and Sara Cunnew, 29, founders of deli and chocolate chain Kshocolat were among the winners.

Simon and Sara were one of four businesses recognised from a group of 36 recipients of the Prince's Scottish Youth Business Trust Growth Fund.

The PSYBT, which helps young people aged 18 to 25 set up and run businesses, started the fund for people who had been in business for a year and wanted to expand, but were struggling to raise finance.

Kshocolat, which produces, distributes and sells quality chocolate products, set up shop in November 2001 with a PSYBT loan of 5000, a bank loan of (pounds) 10,000 and owners' investment of 25,000.

They started life in Merchant Square in the city centre and following a successful first year began to source funding to open a packaging and production site in Govan and a further outlet in Princes Square, Glasgow.

They were awarded a Growth Fund Development loan of 5000 and the company underwent a period of expansion to develop their concept and roll out to new locations.

Last November they put together a further package of finance including a PSYBT Growth Fund Accelerator Loan of 20,000 and opened a third retail outlet in Ocean Terminal Edinburgh in December.

They are now looking for equity investment of around 1million to help achieve their ambitious growth plans and third year turnover projections of 2.5m.

Mark Strudwick, chief executive of the PSYBT took the opportunity to praise the success of the Growth Fund scheme.

He said: 'The Growth Fund has been a huge success for the companies involved, helping them take forward their ambitious growth plans.

'We will invest more than 500,000 in 44 businesses over the next two years, and with generous donations from the Entrepreneurial Exchange, the Moffat Charitable Trust and a small amount of European funding we are already half-way to the required funds.

'We are confident the Growth Fund will be self-sustainable by January 2007, generating enough repayments to cover all future recipient loans.'

Karen McGinlay, project manager for National Australia Group's Wealth Management Division added: 'We operate a UK wide Community Programme that encourages our employees to enrich their lives and the lives of the communities in which they live and work.

'We are delighted to have formed a partnership with PSYBT and look forward to developing it.'

Growth Fund applicants can apply for either the Developmental Loan of 5000, or for more significant funding access the Accelerator Loan of between 10,000 and 25,000.

Recipients of both loans also receive advice and aftercare mentoring from 18 PSYBT regional managers and various volunteers Scotland-wide, which helps get them 'investor ready' and assists with their growth plans.

To date, an investment of 459,500 has funded the 36 Growth Fund businesses allowing them to generate 957,450 of funding to implement their growth plans.

Collectively the recipients predict an increase in turnover of 6m in the 12 months following the investment, and the creation of 87 jobs.

Funding for the Growth Fund came from an initial pledge of 125,000 from Tom Hunter and backing from Scottish Enterprise, Highlands and Islands Enterprise, and an investment from 3I, Royal Bank of Scotland, Lloyds TSB Scotland and the Bank of Scotland.


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