Enterprise Finance funding puts bike firm on path to growth

December 10, 2013
By

Mango Bikes, a fast-growing cycle retail business founded just over year ago by two university graduates, is gearing up for expansion after successfully gaining funding of nearly £100,000.

The firm sells affordable bikes made from parts made in Taiwan which are shipped to its headquarters in South Cerney where they are assembled and painted before being delivered.

The bikes sell through the firm’s website and Fenwick department stores – the unique selling point being that customers can custom-select their colours, styles and accessories.

Founders Jezz Skelton and Ben Harrison hit on the idea while friends at university. They wanted to market an affordable bike to students, and started their range with a one-speed model costing around £300.

To get the business up to speed, Jezz and Ben applied for the funding through the Government’s Enterprise Finance Guarantee (EFG) scheme, which enables small businesses to borrow money from approved lenders.

The first tranche of £50,000 from the £95,000 EFG funding came through in June and the pair have just secured their second tranche, of £45,000, which was dependent on hitting sales and profit targets.

Mango Bikes was helped in the funding application by Neil Elsden of Swindon-based Banks, Chartered Accountants. The funding came from Lloyds Bank.

“Neil and Banks were a huge help,” said Ben. “In fact, we had tried to apply to two other banks first but our applications had been turned down.”

The money has enabled them to carry enough stock to be able to fulfil their expanding order book and meet their customer guarantee of delivering a bike within 10 days of order.

Pictured: From left, Mango’s Jezz Skelton and Ben Harrison with Neil Elsden of Banks

Neil Elsden said: “From the first meeting with Ben and Jezz it was clear that they had both a real vision of where they wanted the company to go and a work ethic to make it happen. In fact the only thing holding them back was funding.

“We looked at the funding options available, and agreed that the EFG was the most appropriate to them and their circumstances. I am pleased to have been involved in the successful application process and I look forward to working with Ben and Jezz as their business grows.

“Their story goes to show that, with the right application in place, funding from banks is available.”

Lloyds Bank Commercial Banking relationship manager Eddie Cranwell added: “Ben and Jezz took an idea and made it happen. It is thanks to their business plan and Mango Bike’s unique selling point that the company is doing so well and has such ambition for growth.”

The pair were able to put in £30,000 of their own money to launch the business and attracted a further £5,000 in seed funding from Innocent drinks co-founder Richard Reed when they appeared in a BBC programme he fronted called Be Your Own Boss, aimed at encouraging young entrepreneurs.

In fact, by winning the programme they were offered a further £50,000 funding from Richard, but decided not to accept because of the equity terms.

Mango Bikes’ first full year of trading ends in April and the business is on course to turn over £600,000, selling more than 2,500 bikes. Ben and Jezz hope to break into other high street retailers, such as John Lewis. Overseas sales are also steadily increasing.

 

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