Despite scaremongering to the contrary, small but ambitious TV firms can still get funding for expansion in these times of austerity. They just need to look at alternative sources, argues Paul Robson.
Although we don’t like to admit it, the TV industry, for all of its grandeur and its glamour, is actually quite small. Certainly not in terms of influence but when it comes to business we’re tiny when compared to goliath industries like IT. Even with the rise of the ‘Super Indie’ and the consolidation of the post-production market, most television companies are still SMEs (Small to Medium Sized Enterprises), ie, firms with 250 staff or less and turnovers of no more than £50m.
As a consequence, when a survey by the Federation of Small Businesses (FSB) finds that small UK firms are struggling to raise the money they need in order to expand, I get very interested. If you haven’t seen it, let me fill you in. Apparently, half of the businesses surveyed wanted to expand but a whopping 42% those that applied for a loan said they were turned down.
At the same time, the government suggests that: “many promising growing companies can’t get the loans they need to expand on reasonable terms”. It was the business minister that said that.
And if that wasn’t bad enough, Bank of England figures from October revealed that overall business lending was down £2.2 billion in the year to August with smaller players continuing to report an inability to obtain credit. It doesn’t make for good reading.
Without access to credit (and at a decent interest rate) how can small but ambitious TV firms expand? Well, generally speaking, they can’t. We’re doomed I say, doomed.
Except that it is simply not the case. I know from personal experience that it is possible to get finance, even in a volatile, seasonal and highly internationalized market like television that is geared towards high-cost and rapidly outdated equipment.
Here is the truth: Small media companies can get finance and on reasonable terms. Unfortunately, it is a much more difficult journey than it was a few years ago. Banks are infinitely more cautious (with good reason) and a lot more prescriptive when underwriting a loan. But finance is definitely available. It’s just that you have to look for alternative funders.
I personally provide underwriting information to a wide number of funders that are actively looking to find safe business in media. And many of them are not banks. If the applicant is viable then there is a deal to be done and credit to be had.
As a small industry, television definitely punches above its weight. But if we are to continue to grow and expand then entrepreneurial and innovative companies need the means to do so. And this generally comes down to hard cash. Which is definitely out there. You just have to look beyond the banks.
Paul Robson is the Managing Director of Medialease, a specialist finance company providing asset funding and finance solutions to the broadcast television and film industries.