Raw 02 - September 2008 - (Page 55)

STERLING RAW G etting a bank to lend money, through overdrafts or loans to businesses, has been difficult to say the least in recent months. An increasingly inflexible approach by the banks is leading to a significant number of businesses and their advisers looking for finance outside of their bank. Of increasing concern is that in many cases the banks are now going further than not lending, by actually withdrawing the facilities that clients have had in place for many years. If alternative funding cannot be found quickly, then bank charges become punitive and cash flow is starved, thereby increasing the risk of business failure. But where are business supposed to go when other banks do not have the appetite to finance their own clients, let alone fund another bank’s declined deal? One option is to use the services of a reputable Commercial Finance Broker. This route to finance provides businesses with a number of benefits, namely: sive range of lenders, which extends well beyond the high street banks into merchant banks, building societies, sub-prime lenders, development funders and private lending consortiums. For many niche lenders, their only route to market is through the broker network, as they don’t have the extensive branch network or the sales force enjoyed by the banks. Most niche lenders prefer to deal only with brokers as all deals will effectively be pre-screened for suitability, thereby reducing the amount of time spent on deals that are outside of criteria. CONTINGENT FEES A broker will normally only get paid once a deal is drawn down, with their fees being linked to the funds raised. Payment on completion also ensures that a broker will remain on hand to assist with any delays with the process through to legal completion. PREFERENTIAL RATES Brokers are able to negotiate preferential rates for clients, which, in many cases, can more than offset the cost of using a broker in the first place. So with all these advantages, why do so many clients choose not to go down the broker route? David Griffiths, Managing Director of Sterling Capital Reserve Ltd, offers three reasons, which all come down to awareness and image. Firstly, many businessmen are entrepreneurs and feel that they do not need to outsource this task as they believe that they can source their own funding. In today’s economic climate, this is not so easy. Secondly, many clients are simply not aware of any Commercial Finance Brokers (their bank manager does not always tell them) and some accountants will merely direct them to the lenders to whom they always refer deals, invariably this often serves to waste more time. Thirdly, the historic image of a broker is more of an individual with one specialism, rather than a team of qualified professionals accessing a cross section of funders, operating within a professional environment. Sterling Capital Reserve Ltd is a Midlands based commercial finance brokerage, specialising in raising finance on behalf of clients across the whole of the UK. TIME This, the most valuable of all commodities, can be saved in many areas. A reputable broker will be able to turn a proposal round very quickly as they will be able to identify the most appropriate lenders for each proposal. The lenders also tend to respond much quicker to a broker application as they recognise that brokers operate on short turnaround times. The risk of upsetting a broker and losing steady deal flow has not gone unnoticed by most lenders. Time is of the essence, and can mean the difference between success and failure when a business is being starved of cash flow. PRESENTATION Reputable brokers will be experienced in presenting and packaging an application on behalf of their clients, in a format that will greatly enhance the chances of securing finance. In many cases, the broker would also attend meetings between the client and funder in order to smooth the process of securing the funds. The business was set up ten years ago by Managing Director, David Griffiths, a qualified Chartered Accountant, with over 20 years’ experience in raising finance. David has put together a professional team with backgrounds in the banking, accountancy and financial services sectors. David comments. “This broad experience enables us to add considerable value to our clients’ requests for finance, by looking at the broader picture of what the business is trying to achieve and introduce the necessary finance, from the most appropriate lenders, to make the deal work. “In recent months we are seeing a significant increase in enquiries for finance as a direct consequence of the high street banks looking to exit from clients. Ironically, we see as many enquiries from the banks keen for us to help them offload the client efficiently, as we do from businesses desperate to escape. “Having access to innovative funders (yes, even in today’s climate) allows us to considerably add value and make the refinance easier for all concerned. “Where clients have tax arrears, we have in-house specialists who renegotiate the arrears on behalf of the client. This gives new lenders confidence to advance funds in the knowledge that the money is being used for the business, rather than going in one door and straight out of another.” Sterling Capital Reserve Ltd has taken the concept of brokerage to a professional level, by establishing a strong introducer base of accountancy practices, bankers, solicitors, management consultants and independent financial advisers across the UK. These professional firms are forward thinking enough to recognise the value in working with a reputable brokerage in order to obtain finance for their clients even in today’s challenging times. For further information, take a tour of our website: www.sterlingcapitalreserve.co.uk or simply call us on 0115 984 9800 We can only help you, if you contact us! CHOICE Most brokers have access to a comprehen- millionimpossible.com 55 http://www.sterlingcapitalreserve.co.uk http://www.millionimpossible.com

Table of Contents Feed for the Digital Edition of Raw 02 - September 2008

Raw 02 - September 2008 Contents Scott English Rachael Elnaugh Colin Stroud Heidi Weir Chris Wright Million Impossible Emma Thompson

Raw 02 - September 2008

For optimal viewing of this digital publication, please enable JavaScript and then refresh the page. If you would like to try to load the digital publication without using Flash Player detection, please click here.