Money, money, money…and how to get your hands on it more easily via print finance specialists.
When Contour Business Finance came into being early this year it was as a direct result of the failure of the big banks to provide adequate finance for the printing industry. “Funding from the traditional sources still remains a big problem,” says Contour managing director Kevin Barron many months on. Plenty would agree.
He says clients have identified a number of difficult situations when approaching their usual bank for finance. Either that the banks simply refuse to invest in a new start-up or to fund an expanding business. Often they suggest switching to Confidential Invoice Discounting (CID) rather than overdraft facilities. Sound familiar?
CID was never designed to fill this need; it was introduced to provide cashflow for expanding businesses for which it is well suited, and according to Barron, is therefore being miss-sold by the banks in this situation. In addition, and contrary to Government guidelines, he says printers are finding that banks are also likely to demand personal guarantees – even for Government secured loans.
“Everything is loaded in the banks’ favour and they just can’t lose,” adds Barron. “They are looking after their own balance sheets rather than working to help their customers or UK plc.”
Other typical scenarios include long delays in reviewing business plan submissions before finally declining finance, refusal to renew existing overdraft facilities or imposing draconian measures to do so, rejection of - or raised costs for - fixed asset finance, and undervaluation of machinery when seeking refinance.
“We are on record as being highly critical of the banks’ willingness to lend – and the conditions imposed even when they do – since they were bailed out by Government. We have pointed out on several occasions that this reluctance is particularly damaging to the print industry which is mainly made up of SME’s to whom the Government has repeatedly – yet ineffectually – pressurised the bank to lend,” adds Barron.
In response Contour Business Finance established its own funding service to printers. The company specialises in ‘tailored money’ for a range of services. These include hire purchase, operating leases, finance leases, commercial mortgages, factoring and confidential invoice discounting (CID), capital release schemes and asset refinancing as well as finance for mergers and acquisitions, MBO’s and MBI’s. The company aims to assist business growth also by making available funding support for working capital and investment in plant and machinery.
“As a sister company to print industry mergers and acquisitions specialist Richmond Capital Partners, we saw that bank funding for the newly merged or acquired business enterprise had become difficult and was potentially adversely affecting their future. Without acquisition capital or working capital, fundamentally good businesses were being denied the opportunity to fulfil sound business plans. With its contacts with private investment banks and other finance providers, Richmond Capital Partners has been able to complete mergers and acquisitions in the print industry,” explains Barron. “We have therefore worked together with these finance providers to develop Contour Business Finance, with credit lines agreed with several major financial institutions who are ready and willing to provide funding for the print industry.
He admits “there are no soft touches in today’s financial situation, so any proposal for funding has to be accompanied by a well-presented, well-reasoned and achievable business plan to support any funding application. The old relationship with your friendly local bank manager is a distant memory. Every case has to be considered and proved on its individual merits, but Contour Business Finance is often able to obtain funding where banks are unwilling.”
In the first instance, for those of you seeking to access funding, Contour Business Finance has developed a business plan template which is available on its website (www.contourbusinessfinance.com). This sets out a typical example of the kind of information required by any potential finance provider.
“It’s a relatively simple document but it can make all the difference between acceptance and rejection, so it is well worth following the template to make the right impression. We will even review your first draft completely free of charge and without obligation. And with absolute discretion guaranteed,” promises Barron.