Andrew Rutherford
Centric Commercial Finance
Ask the Expert: Funding in the South East
Andrew Rutherford, business development director at Centric Commercial Finance, examines the role funding will play in promoting recovery in the region.
Q: To what extent will funding prove crucial to the future of businesses and the local economy in and around London and the South East?
The downturn has forced nearly all SMEs across the UK to make significant cuts. The question is, when sales increase, can businesses in the South East be the first to capitalise on this and strengthen the region’s position as a leading area of business? I would argue that it can but access to funding is imperative.
Market conditions in 2011 were extremely challenging and SMEs suffered as a result. A number of high street banks were force to review their funding criteria meaning that SMEs were refused funding and some were denied access to loans which had previously been agreed.
Our view is that these businesses are getting a raw deal. They are not being considered according to their individual merits and being dismissed as untenable, or falling victim to a particular institution’s exposure to certain, less favoured, sectors.
Last year, we saw a consistent need to deliver solutions where traditional sources of finance could not. As such, we have seen many businesses across the whole of the South East take advantage of asset-based lending (ABL) and invoice discounting.
Designed to be flexible financial solutions, ABL and invoice discounting both offer room for growth and, unlike a traditional overdraft, have fewer limits. In an unpredictable environment this level of flexibility is vital. Our clients often require additional working capital to respond to changes within their businesses. Management buyouts (MBOs) or partial exits are a classic example of this.
This form of finance is also an excellent way for businesses to react to demand or opportunities for growth. Very often our clients want to purchase new equipment, expand into a different region or acquire other businesses. With a coherent business strategy in place, SMEs that are streamlining their operations, responding to opportunities and adapting to change are the businesses that will flourish post-recession.
Centric is well placed to respond to South East based SMEs and their funding needs. The difference between us and larger institutions is that we consider every prospective client as an individual business and find solutions.
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Andrew Rutherford
Business Development Director,
Centric Commercial Finance
andrew.rutherford@centriccf.com
020 8603 2953
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