Ask the Collective
The questions independent drinks founders ask most — answered. Distilled from years of community knowledge so the good stuff never disappears in the feed again.
What is the typical timeline for obtaining EIS approval and receiving EIS3 certificates?
EIS approval timelines vary significantly, but members report two distinct phases: getting the initial approval letter is fast, while receiving the EIS3 certificates after investment is taken can be much slower. **Approval letter timeline:** - Can be obtained "pretty sharpish" through your accountants, with some members receiving approval in as little as 2 weeks. **EIS3 certificate timeline (after investment is taken):** - Ranges from 2 weeks to 3 months, though members note timelines are "taking longer than ever apparently." - One member reported previously waiting a couple of months in the past. - Members have experienced anywhere from 2 weeks to 3 months depending on circumstances. **Tactic to potentially speed up the process:** - **Seedrs-style presentation** — one member found quicker HMRC response times when presenting investment data and literature to HMRC in the format Seedrs uses, though they acknowledged correlation may not equal causation. The key takeaway: don't conflate the fast approval letter with the slower certificate issuance; plan for several months between taking investment and receiving your EIS3 certificates.
How should I value a drinks business ahead of a first funding round, particularly for SEIS investment?
Valuing an early-stage drinks business is described by members as "a black art" with many possible approaches. There is no single formula, and valuations vary widely in rigour—members have seen some that read like "outstanding work of fiction." Here's what the community recommends: **Approach:** - Valuation is ultimately determined by what an investor will pay, not by formulae alone. Use comparable brand valuations as a benchmark, but don't over-index on them. - **Pitch high initially**: Members advise erring on the side of over-valuation in your first round, because equity dilution at this stage is greatest. You'll likely negotiate down anyway ("you'll end up taking a hair cut on your valuation anyway, so over egg it"), so starting high protects your stake. - Several members reported having direct experience with raising at ~£300k SEIS rounds and offered calls to discuss specific numbers and methodologies in detail. **Caveats:** - Macroeconomic climate affects investor appetite and valuation expectations. Conservative valuations are increasingly common. - Get advice from experienced founders in the space before finalizing your figure—this is sufficiently subjective that peer input is valuable.
What e-commerce funding options and rates are available for drinks brands with D2C and Shopify revenue?
Members have identified a handful of specialist e-commerce funding providers that lend against Shopify and Amazon revenue. Here are the options discussed: - **Wayflyer** — mentioned for PPC spend funding; appears to be an active choice for members - **Outfund** — flagged as a potential option (member sought experiences with the provider) - **Shopify Capital** — offers lines of credit at approximately 10% interest - **A 6% line-of-credit product** — one member reported accessing this rate to fund D2C and Amazon revenue, paid out of Shopify and Amazon sales; they asked if others had seen better rates Members noted that the 6% option "seems like a good deal" relative to alternatives, though Shopify Capital's 10% rate is also available. No other providers or rates were detailed in the discussion. The group appeared less familiar with these options overall (one member requested a "101"), suggesting this is an emerging area of interest for the community.
What funding advisory and financing products are available for small drinks businesses?
Members have experience with advisory firms and purchase-order financing products, though approaches vary widely. **Advisory and financing models:** - **Retainer-based advisory firms** — Some firms charge £3–5k per month as a retainer while sourcing funding, with the retainer then deducted from the final funds raised (typically around 5% of funds raised). Members found this fee structure fairer than flat upfront payments. - **SFBO** — Members flagged this as a red flag: they request £10k upfront with a "guaranteed funding" promise, which several members felt resembled a scam. **Purchase-order financing:** - **Treyd** — Mentioned as a viable stock-funding option. - **Ferovinum** — Also funds stock, but members warned of ghosting issues; use with caution. - **Whisky-focused financiers** — Members noted that many PO financing providers they contacted were primarily focused on whisky, so mileage may vary for other drinks categories. **Caveats:** Members have explored PO financing over the years without concrete outcomes. Flat upfront fees (like SFBO's model) should be treated with skepticism. Retainer-based advisory tied to eventual fund-raising success appears more common in the community's experience.
What interest rates are banks offering on recovery loans?
Members who have explored recovery loans report competitive rates from mainstream lenders. **Lloyds** quoted around 2.7% plus an arrangement fee, with loans available up to £250k with no personal guarantee required. The scheme is government-backed; more details are available via the [official Government recovery loan scheme guidance](https://www.gov.uk/guidance/recovery-loan-scheme). Members also note that **invoice financing** schemes exist as an alternative option that may benefit businesses with different cash-flow needs.
Can we prepare S/EIS certificates ourselves without using professional services like SeedLegals, or is it worth paying for help?
Yes, members have successfully prepared their own S/EIS certificates without using professional services like SeedLegals. The process is straightforward **if you've already received advanced assurance** from HMRC — that's the critical prerequisite. The main risk of doing it yourself is time: if you make mistakes, you could lose 6 weeks waiting for corrections and damage credibility with investors. However, members have negotiated **SeedLegals rates down** by setting up annual deals, which may be worth exploring as a middle ground if you're concerned about cost.
Which invoice financing providers offer competitive terms and good service for growing drinks businesses?
Members recommend several invoice financing firms with proven track records in the sector. The key is to actively compare fees, as rates vary significantly. **Recommended providers:** - **Gapcap** — praised as "pretty good" by members who've worked with them - **AcceleratedPayments** — reported to work well - **Lloyds** — described as working "very well" - **Close Brothers** — noted as "excellent" by recent users; ask for Péter Hook (ex-Aldermore), described as a "really nice guy" - **Credit Agricole** — members found this option ~50% cheaper than Aldermore in recent fee analysis - **Aldermore** — members have used this for 18+ months but flag that recent fee analysis showed significantly higher costs than competitors; one member also reported they attempted to include a personal guarantee in the contract without explicit discussion or consent, which they had to challenge **Key caveats:** - Do your own fee comparison before committing—rates differ substantially between providers - Close Brothers was noted as "quite old school," which may or may not suit your preference - At least one member raised concerns about Aldermore's contracting practices; review terms carefully - Request fee comparisons upfront when vetting providers For specialist support, members mentioned **Trent Peek** (01623 259 580, trent@wearefulfilment.co.uk) as a recommended contact, though the context suggests he may provide broader supply-chain support rather than financing specifically.
Should we use an agent to handle SEIS/EIS applications or can we complete them ourselves?
Members strongly recommend using a specialist agent rather than attempting SEIS/EIS applications in-house. The consensus is that the process is complex enough that doing it wrong is a real risk. **Recommended approach:** - **Seed Legal** — mentioned as a trusted agent for SEIS/EIS applications **Key considerations:** - Multiple members advised "always use an agent — it's too easy to get wrong" - If you're claiming Capital Gains deferral relief (deferring gains from previous CGT-liable transactions into an EIS investment), this adds complexity and makes professional guidance even more important - Relief is claimed through the EIS3 certificate form via your tax return, similar to income tax relief claims - If you've already paid CGT on a gain before deploying it into EIS, your accountant will need to advise on the best reclaim route **Caveat:** While the forms themselves (EIS3 cert) are theoretically completable, the strategic planning around Capital Gains deferral and ensuring compliance makes agent involvement the safer choice.
How strict is HMRC enforcement on the three-year trading window requirement for SEIS tax relief eligibility?
HMRC has tightened its approach to SEIS and EIS compliance significantly over the past 18 months. Members report that HMRC is now "pretty strict" on the three-year trading window requirement. **Key points:** - **EIS3 certificate applications** without recent advanced assurance are increasingly being questioned by HMRC, suggesting closer scrutiny of the trading history and timeline documentation. - For specialist or contentious cases, members recommend consulting **Philip Hare**, described as expensive but highly effective at arguing technical SEIS/EIS points with the tax authority. - The general consensus is that you should assume HMRC will enforce the requirement rigorously rather than take a lenient interpretation. **Caveat:** This is based on members' recent experience rather than published HMRC guidance changes. If you're close to or crossing the three-year threshold, specialist advice is worth the investment.
Can a founder self-issue EIS certificates to investors without paying a third-party service provider?
Yes. Members have successfully self-issued EIS certificates through the HMRC process without paying third-party fees (typically £500+). - **Self-issuing via HMRC** — Two members confirmed they completed the process independently. One received HMRC authority to issue certificates directly to investors after learning the stages and following the process. The other described it as straightforward and not difficult. This approach eliminates the need to pay external firms for certificate issuance.