APRIL 2019 FINANCE
large pot of money at hand to,
for example, purchase a new
piece of complicated machinery
or to rethink factory operations.
“For a business owner, this
might mean having to convince
a lender that it’s worth investing
in new technology. This can
be a tricky sell: a positive
decision may rely on a fi nance
provider’s understanding of the
technology underpinning these
innovations. Unfortunately,
this kind of funder is not always
easy to fi nd.”
Step forward the new
breed of alternative lender.
Their size, continues Carter,
allows them to be fl exible in
providing fi nance to customers
who are planning for the
future, especially compared
to traditional lenders. “The
vast majority of bank invoice
fi nance facilities will revolve
around work that’s already
happened,” he says. “This
type of funding may not work
for a business thinking about
investment in software or
machinery which promises
future revenues and profi ts.”
This may seem like a
risky approach – lending
against a prediction of future
performance. However, explains
Steely choice for working
capital to fund growth
Wyelands Bank recently completed a
seven-fi gure asset-based lending deal
for AD Bird Stainless Limited. The deal will
help the Sheffi eld-based supplier of
precise, specialist stainless steel to grow.
The Wyelands Bank deal will free up
working capital, enabling AD Bird Stainless
Limited to take on new orders and invest
for the future. AD Bird Stainless Limited is
forecast to achieve more than £7m this
fi nancial year, which demonstrates substantial
growth over the previous year.
Wyelands Bank will provide AD Bird Stainless
Limited with the funding it needs to grow through
a loan structured to meet the business’ working
capital requirements. The loan will increase fl exibly
and will be driven by the working capital assets
owned by AD Bird Stainless.
AD Bird Stainless Limited was established in
1987 and now employs 23 people. Today, the
Flaxman, it can be mitigated in
a simple way. “There are simple
ways to fund growth,” he says.
“It starts with the funder
having a good understanding
of the manufacturing fi rm
and its assets. We get to
know our customers and
have the fl exibility to tailor
the right solutions for their
business. This might mean
manufacturers raising money
against the invoices they have
issued, or against stock they
hold. By understanding what
a fi rm is trying to do, we
can help identify how
it can raise fi nance to
bring its plans to life
now and in the future.”
Peer-to-peer funding
This forward-thinking
approach will enable a
company to grow faster.
However, even this comes
with challenges: how to
think about evolving
new processes and
delivering new
business in an
agile way, without
hampering the
fundamentals
that have
business
is run by Nigel Bird (above
middle), the son of founder Derek Bird. He says:
“The funding is a very important driver in our
growth and allows us to manage our future plans.
We are extremely busy with new orders and
supporting existing customers, both in the UK
and overseas. This year we are on track to hit our
forecast turnover, which has been assisted by
our increased focus in the marine sector.”
success in the fi rst place. One such solution is
peer-to-peer (P2P) lending. P2P lending works by
lending money to businesses via online services
that match lenders with borrowers. Lenders can
see higher returns on their investment, while
borrowers enjoy lower interest rates. This is
proving especially popular with forward-thinking
companies looking to invest in future growth:
the FSB estimates that one in 10 small business
fi nance applicants sought to use a P2P model
last year, up from around one in 20 in 2015.
Growth Street is one such P2P lender. As
Carter explains, its benefi ts are becoming much
more widely recognised. “The digitalisation
of businesses – including manufacturers – all
over the UK is correlated with the increased
popularity of alternative funding models like
P2P lending,” he says. “Real-time oversight of
a company’s performance, thanks to cloud
accounting integrations, can enable more
intelligent credit pricing and more proactive
relationship management.”
SMEs form the backbone of the UK’s
economy. It’s therefore crucial that they have
access to the capital they
need to grow. A new
breed of fl exible,
alternative fi nance
is helping to create
the conditions
for innovation to
thrive and become
more productive
and successful in
an increasingly
digital world.
Wyelands Bank’s
Ian Flaxman
(below) sees new
funding models
becoming more
commonplace
brought about
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