Blog – JB Commercial Finance

The Impact Of Government Covid Measures On Business Finance

The Impact Of Government Covid Measures On Business Finance

The Governments various COVID support measures are expected to cost approx. £500B once completed (various sources) but this doesn’t give the full picture when it comes to support for SMEs where there is a considerable amount of uncertainty about the final bill and will remain so for many years. There is also doubt over how these measures will impact on more conventional business finance for a number of reasons, some of which I will explore here. The Bounce Back Loan: There is only one place to start and that is with the Bounce Back Loan (BBL). For those living under a rock, this is the cheap, minimal due diligence loan which over 1.5m businesses took during the pandemic with a total loan figure of £47B being 100% guaranteed by HMRC. As well as potentially creating a liability for HMRC up to 2031 (when the final loan is repaid), the BBL , and it’s big brother the CBILS Loan (Corona Business Interruption Loan Scheme) which guaranteed 80% of a further £26B worth of loans, has flooded the SME marketplace with finance which has led to several lenders expressing severe caution or even pulling away from the market altogether. It seems highly likely that once the latest Government Loan Scheme, The Recovery Loan Scheme, end in June 2022, the options for clients will be severely restricted when seeking short term or unsecured finance. The BBL will also impact the way the High Street Banks (still responsible for a majority of SME lending) treat the market for many years. With defaults estimated anywhere between 20% and 40% and the Government pushing back on their commitment to guarantee these loans, the losses are likely to run into the billions. This is unquestionably having an impact on Banks appetite to lend in the SME space, in fact, we are already seeing this as the credit policy of the same Banks continues to tighten up. Lockdown: The most significant Government measure taken at the start of the COVID period (March 2020) was the nationwide lockdown implemented which led to household restrictions, businesses being forced to close and schools moving to online teaching. This had a huge impact on the business lending space as the uncertainly caused (when would the country reopen?) caused an immediate withdrawal from the market of many lenders, some not to return, as well as many clients having previously agreed facilities pulled away from them, regardless of the position. This left many business owners out of pocket for valuation fees, solicitor fees and created great panic and disruption for them. In turn this has led to an increased distrust in lending institutions from SME owners who were let down by the kneejerk decisions made as well as reduced confidence in brokers who, on many occasions, had to give the bad news. The fallout from lockdown is still being felt now. Customers lending requests are largely based on their trading performance and the significant drop in turnover and profitability felt by many businesses during lockdown is having a significant impact on their ability to be accepted for finance even in 2022 and even with the consideration given for the generational circumstances. Clients Attitude: The BBL has had a major impact on the business owner attitude towards the pricing of alternative business lending. Due to the favourable nature of the BBL with regard to the fixed interest rate (2.5% - astonishingly low for any business borrowing), the lack of arrangement fee for the facility (usually 1 – 2%) and personal guarantee (always a requirement for Limited Company debt), presenting a client with more ‘traditional’ terms and conditions presents a new challenge. If you have just borrowed under the most favourable terms ever presented for a commercial loan, then looking at alternatives can restrict the appetite to borrow and prevent future growth which this lending might enable. Commercial Property: There were a number of measures introduced during the COVID period to assist the business owner who traded from a premises. As well as being able to furlough their staff and claim the beneficial terms of the BBL, ratepayers were automatically presented with a Grant and the ability to apply for further grants as well. As you may expect, these were not repayable! It also became increasing difficult to evict a challenging commercial
Personal Guarantees In Business Lending

Personal Guarantees In Business Lending

One of the recent hot topics relating to the CBILS and Business Bounce Back Loan Schemes (BBL) was the absence of a personal guarantee for a majority of these loans for Limited Company borrowing. It has been a standard requirement for a majority of Limited Company lending that a personal guarantee from at least one director is in place to support the debt, regardless of the quality of the business and the size of the lending facility. This ensures that the Director(s) of the business cannot walk away from liabilities in the company name without having to find the ability to repay from personal resources. The absence of Guarantees from the whole of the BBL (loans up to £50,000) and for all CBILS facilities up to £250,000 (and for many over this as well) significantly increases the risk to the lender and in this case, the Treasury, who have guaranteed BBL’s in full and CBILS up to 80%. There are several reasons why this step was taken when the scheme was rolled out (time, ease, underwriting etc) but, instead of rehashing old content I would prefer to focus on a survey of over 1000 small business owners by Purbeck Personal Guarantee Insurance which has found that more than 1 in 5 (22%) has not told their life partner that they have signed a personal guarantee. Personal Guarantees In Business Lending “We have estimated that over 420,000 small business owners in the UK were acting as personal guarantors for business loans prior to the pandemic. Furthermore, around £2.1bn in CBIL loans were taken by business owners and directors which had personal guarantees attached." In a nutshell, this means that these individuals have agreed to personal secure business debts without telling their partners with whom they are likely to hold a significant amount of their assets jointly. This can include property, vehicles or any other assets of value. While there are ways to mitigate this risk (as Purbeck hope you will by using their services), a majority of this debt will remain exposed and, in all likelihood, with the partner remaining in the dark. So, what does this mean? While keeping partners unaware of business dealings has always happened, in this age of increased reliance on computer generated decisions and credit scoring it is increasingly risky to keep a secret. If adverse credit information is registered against a director for a business debt at their residential address, then this impacts on everyone who lives at this address. It is highly likely that a CCJ registered at an address will preclude anyone living there from obtaining credit, irrespective of whether they were involved in the original debt or not. It can also have a major impact on the availability of mortgage products, a majority of which are held in joint names. When looking to re-mortgage as a couple, it may come as a surprise to an applicant to find out that their partner has adverse credit history which may restrict the range of mortgages they can move to or even prevent them re-mortgaging at all! I can imagine a few nasty shocks in the Bank when this happens! The Importance Of Credit History In Todays Environment I have often written about the importance of credit history in todays environment. In fact, if I could offer one piece of advice to anyone, whether they run a business or not, it would be to check and protect their personal credit history. With the rise of algorithm driven lending and digital Banks, it will only become more important to make sure you are as attractive as possible to a potential lender and credit history is a vital part of this. While it may be surprising to many to read the numbers above, it comes as no surprise to myself or, dare I say, a majority of people in the financial service industry. I am never shocked by the secrets kept by partners in relation to their business activities and risks. I always suggest that when agreeing to sign a personal guarantee, a client takes legal advice from a trusted and qualified solicitor (not essential with many lenders) and advise anyone who they share joint liabilities with that they are taking on this risk. At least this way, there are no nasty surprises down
JB Commercial Finance

So, Why Should I Purchase My Own Commercial Premises?

So many of us own our own residential property but so few own the freehold premises which our business trades from! So, Why Should I Purchase My Own Commercial Premises? It’s commonly said that in the UK we are a nation of homeowners, in contrast with our European friends who prefer generally to rent their homes. Despite this, a vast majority of business owners either trade from home or, if they do require offices or a factory, either prefer to rent their premises on commercial terms or don’t understand the benefits of property ownership. The reality is that there are many benefits to renting your premises. These include The ability to leave the premises if required due to the business folding, outgrowing the premises due to a business expansion or a disagreement with the Landlord. Most commercial leases have break clauses and all have a fixed term after which there are no restraints to remaining there. Depending on the nature of the lease signed, its possible that any significant work required to the property falls to the Landlord to pay, not the tenant. This can include structural work, electrical work or even damage resulting from natural disasters. During recent economic uncertainty, Landlords have been compelled to offer leniency to tenants regarding non payment or underpayment of rent. This won’t have a negative impact on the tenant’s credit history, unlike if they missed a mortgage payment which can leave a ‘footprint’ on credit history which can take months, if not years, to shake off. Despite all this there are an enormous number of reasons why you should consider buying your own freehold to trade from, irrespective of the nature of your industry. It’s generally more affordable on a monthly basis to buy than rent. Yes, as with residential property, its likely to be cheaper monthly to pay a commercial mortgage than rent the same unit. A standard recent example was a gym I was referred to, which was paying £36,000 rent annually for their premises (this was fair market rent for this particular property), but they held an option to buy the freehold which they wished to take advantage of. With this particular deal, a 25-year mortgage at an interest rate of 4% with a 25% deposit gave monthly repayments of £1583 or annually £18,996 – roughly half the rent paid! In fact, if the client decided to overpay the mortgage with monthly payments in line with their current rent, they would be mortgage free within 12 years! If they paid the same amount as rent over the same period, they would have no tangible asst to show for it. You will hold a long-term asset Sadly, even after a lifetime of payment commercial rent, the Landlord continues to hold the asset. In fact, I have seen multiple cases where a tenant who has been in situ for many years has paid the landlords mortgage off in full for them, after which the tenant moves on while the Landlord can sell the property or continue to rent it out to another business. By purchasing the property, you will continue to hold it even if your business fails, you move the trading premises or even if you sell the business. In fact, it’s reasonably common for an entrepreneur to sell the goodwill of their trading business while retaining the freehold ensuring that the new owner signs a long-term lease. This can continue to provide an income for the former business owner as well as the possibility to benefit from capital appreciation (a rise in the value of the property) It can be more tax efficient This is not advice – always consult your professional advisors such as your Accountant before deciding how to purchase a commercial property It’s important to understand that there are multiple ways to purchase a commercial property In personal name. i.e., Mr Jones is the sole Director of Jones Roofing Ltd but when purchasing the property, he decides to buy it in his personal name and rent it to Jones Roofing Ltd. In this example, the business continues to remain a separate legal entity so its failure doesn’t lose Mr Jones the asset and Mr Jones can offset the Commercial Mortgage interest against his personal tax return In a Pension Fund. Again, specialist
JB Commercial Finance

If My Bank Won’t Finance My Business, Where Else Can I Go?

If My Bank Won’t Finance My Business, Where Else Can I Go? Bank bashing has become a national pastime since the financial crash of 2008. The sight of bankers receiving a taxpayer bailout while continuing to pay themselves bonuses, plus the public scapegoating of the likes of Fred Goodwin made these institutions public enemy number one. Even now, over a decade on, I hear daily complaints about the major High Street Banks with the most common complaint being (certainly before the COVID crisis anyway) that they have either declined some business lending or, if they haven’t declined it, that the terms and conditions offered are so onerous that they might as well have declined it. It is unquestionable that the risk appetite of banks has changed dramatically since the crash, with restrictions being harder and more expectations of clients when it comes to providing personal or business security and deposits. This article hasn’t been written to discuss the merits of dealing with a High Street Bank and the pros and cons of this. It is rather about what to do if you have been to your own bank for a lending request and what to do if they have turned you down, leaving you wondering what to do next. In truth, this would be a useful guide to read even before approaching your own Bank for a request as they are not always the best option for you. Approach Another Bank: This may seem strange, but just because your own bank has declined your request, doesn’t mean that another bank will. All lenders have different criteria and banks are no different with emphasis on differing sectors and industries depending on their risk appetite at a particular time. Having a trading history with a bank doesn’t mean they are always the ones most likely to support your business. Banks lending policy is generally reasonable rigid so you may ‘not fit in the box’ for your own Bank but, for a lender desperate to increase their exposure in a certain industry, you may be a very attractive proposition. A Commercial Finance Broker: Well, I would say this wouldn’t I? A Commercial broker should have access to most of the High Street Banks, plus multiple other lenders. They will explore the marketplace for you and ensure you get the most appropriate deal for your circumstances. A couple of pieces of advice if dealing with a broker. Always make sure they hold the required FCA authorisations (https://www.fca.org.uk/) and are a member of the National Association of Commercial Finance Brokers (https://nacfb.org/) The Secondary Marketplace: No longer the alternative option for many business owners. In fact, many well established businesses are funded exclusively by secondary lenders. In the wake of the Banks contracting post 2008, the alternative market really stepped up to the plate with a range of innovative products being offered to help fill the gap. This influence continued to grow with the birth of the Fintech lender who are responsible for a considerable percentage of the business lending market in recent years. We have seen this continue with the involvement of Fintech lenders in the Government Loan Schemes during the COVID era. The Banks have also been reluctant to deviate outside ‘traditional’ lending products such as straightforward business loans and overdraft facilities. There are services available outside these which have been pioneered by alternative lenders which can offer a more bespoke offering to a business customer. Outside Investors: If it is impossible to secure conventional lending, it may be worth considering an outside investor. There are multiple ways of doing this. It can be possible to secure business loans (at commercial rates) from third parties or even giving part of the business away to an investor in exchange for a capital injection, known as equity finance. While the idea of selling part of your business can be very frightening, it can be a way to bring expertise and investment in without having to go through the rigmarole of applying for Bank finance. Other External Finance Methods: Many businesses do not consider looking at their existing trade arrangements when looking at funding. While it is possible that they do require a form of Bank funding, it may be equally possible they can tweak the way they currently work. For instance, can more credit be extended by
Raising Finance For Buying A Business

Raising Finance For Buying A Business

Once you have made the decision to purchase a business, your next question probably turns to practicalities- how do you make it happen? A major part of this is likely to involve funding the project, which may in turn involve raising finance to facilitate this. The method of raising funds for buying a business depends on a number of factors including: The nature of the business involved. The amount of finance required. The financial health of the business and the proposed purchaser Let’s talk about the most important factor here which is the third point above, the financial health of the business and the proposed purchaser. Funding for a distressed business purchase vs a healthy business While a distressed business sale has its attractions due to the ability to add value, it is usually more challenging to raise finance to purchase, as it’s likely that the trading figures won’t be able to display the ability to service any ongoing debt. This can be mitigated by the production of a business plan with detailed costings and cash flow forecast. It can also be attractive to a lender if the proposed new owner has a proven track record in the industry or a history of turning around previously struggling businesses. Despite this, it is considerably more attractive to a lender for the target business to show a healthy balance sheet and the ability to service any proposed debt. This can be calculated with a simple EBITDA calculation (Earnings before Interest, Taxation, Depreciation and Amortisation) plus any other ‘add ons’ which can be used to service a loan such as directors’drawings or any finance which won’t move with the change of ownership. Your personal credit rating is still important It is also important that the proposed owner has a clean credit profile, both personally and with any existing business they run. They should show the ability to service previous debt, a track record in their own business or working life and have no adverse credit history such as County Court Judgements or Finance defaults. If these are present, then obtaining finance will be considerably more challenging. It is also very possible that a lender will require a form of personal security when considering a lend for a business purchase. This may come in the form of a Personal Guarantee if the business is a Limited Company or even a legal charge over personal assets such as a residential property. For this to be considered, the property will have to have sufficient equity to cover any proposed debt plus some additional equity to offer some comfort to the lender. You’ll usually be required to take independent legal advice on personal guarantees. What sector the business being purchased is in counts Lenders all have preferred sectors, so it is considerably easier to raise funding if the target business sits in one of these. Sectors which lenders generally seen as ‘Green’ include Manufacturing, Accountancy Practices and traditional ‘white coat’ businesses such as Doctors and Vets. These are sectors with proven track records and are considered less susceptibleto economic volatility. Asset finance – the alternative business purchase finance Depending on the nature of the business, it may be possible to raise finance against the existing assets which are currently held. This funding be raised against ‘hard’ assets such as property, vehicles and machinery which have a tangible value,or against an ongoing debtor book. If the debtor book (funds which the business is owed) is of a good quality, then it’s likely that finance can be raised through a factoring or invoice discounting facility up to the value of approximately 80-90% of the outstanding amount. Goodwill – you’re paying for it but what is it As with everything, there are limitations on how much finance can be raised against a certain transaction. Most transactions of this nature will involve a value of the ongoing goodwill of the business which is a notoriously difficult thing to value. Goodwill is a hugely intangible asset and can be increased massively overnight or even destroyed totally in a split second (a rat seen in a restaurant, Ratner’s etc . Due to this, the parties involved in business transactions are often far apart with their valuations of goodwill and a lender will usually err on the side
JB Commercial Finance

The New Government Business Recovery Loan Scheme – An Overview!

The New Government Business Recovery Loan Scheme - An Overview! With the end of the Bounce Back Loan and CBILS Scheme, the Government announced the launch of the Recovery Loan Scheme beginning in April 2021. The key differences for the new scheme are as follows: There is no turnover threshold unlike the previous schemes Fees and interest are payable immediately, unlike the previous loans which had a 12-month capital and interest repayment holiday You can apply for thew Recovery Loan even if you hold a Bounce Back Loan or CBILS Loan while maintaining those facilities. It seems that the High Street Banks are utilising this facility in a similar way to the previous Enterprise Finance Guarantee Scheme which has run for over a decade. This was a scheme only really used after all available personal and business security had been utilised. This seems to suggest that the Recovery Loan wont prove to be the ‘silver bullet’ which many people hope it will be. To apply for the Government Business Recovery Loan Scheme, you are likely to require the following information: A full business plan including the strengths and weaknesses of your business A full explanation of how much finance you wish to apply for, the purpose of the borrowing and the benefits it will bring to your business Detailed financial forecasting including cashflow forecasts and profit and loss forecasts The most recent trading performance of your business including filed accounts and up to date management information Your most recent 12 months of business and personal bank statements You will also have to consent to personal and business credit scoring as well as provide a full analysis of your personal finances and assets. For more information about this scheme or any other business finance enquiries please get in touch or visit the British Business Bank directly - Click Here jbcommercialfinance.co.uk

Give your business a Christmas present.

If your business seems to be stalling due to insufficient funding and is starved of cash, why not treat it to a cash injection? There are many reasons why a cash injection for a business is the right decision for a business owner to take, but sometimes the reason can seem bigger than the solution. Here are some scenarios where getting a cash injection is the right choice to make: Growth If you have been running a business for the first two or three years then you have probably gotten over that initial start-up cash flow hurdle. It means you are now looking to grow or expand. A Buyout If you run a business with a partner and for some reason that partner leaves or you have the opportunity to buy them out. Then where do you get the money from? You need a cash injection quick in order to ensure the business continues operation and the exit of the partner doesn't unduly affect the running of the company. A short term unsecured loan can often be the answer to lending the money required to bridge the gap between buy-out and longer-term financial funding. Bad Debt From time to time every business suffers a bad debt. It could be a big invoice being contested, product return, insolvency, or it could be from a slow paying customer that is willing to let you take them to court to recover what is owed to you. Whatever the reason, it leaves your business in a short-term financial hole; you need that money to pay staff and pay suppliers, neither of whom are particularly sympathetic to your predicament (despite their indelible connection). An unsecured business loan can be a cost efficient method of securing finance to ensure that the day to day running of your business isn't affected by events out of your immediate control. Technology Is your business in danger of being left behind by technology? Can you afford to still be using that old Lenovo with Windows 8? Does your R&D department need a 3D printer? It can be a costly process but can reap quick rewards in improving efficiency and increasing output - something that can quickly repay your investment.

Planning for the NEW YEAR!

It is vital for business’s to keep on track with growth, performance and financial planning. New Year Business Resolutions might include: • Review and update your business plan, every small business must be guided by a business plan. ... • Consider your staffing needs for the New Year. ... • Check in with your customers. ... • Revisit your pricing. ... • Look into new software solutions. ... • Create a customer review policy. ... • Improve your marketing plan. ... • Do a website review. How additional finance can help? There are specific financing options that give you access to the tools and assets your business needs as it grows. For instance, hiring a fleet of vehicles or ordering brand new machinery to process the order. It depends on what your business needs, and using finance is a smart way to do this. It means you get access to the equipment without having to pay large amounts of cash up-front. This helps keep the business in a good cash flow position, which is important for any growing company. A cash injection could also open opportunities in relation to new customer contracts, being able to produce overhead funds to accommodate client needs prior to payments being received. It may also open up opportunities to allow the company to recruit more staff to improve each department of the business. This is the same for equipment that might support the business moving forward. Additional funds could support the company with the tools or equipment required.

How will Brexit Affect the UK Financial Market?

Will the UK lose its financial standing once it leaves the European Union? This is a question that is currently on the minds of politicians, businesses and employees both inside and outside of the UK. Businesses, looking on from the outside, will also be keen to understand what it will mean for their investments. While no-one currently has the answer they are looking form, it pays for all concerned to consider the ways in which Brexit could affect the financial market, at least then, contingency plans can be made. The first thing to note is that there has been increasing talk of preparations being made for ‘no deal’ when it comes to Brexit. While some feel this is a negotiating tactic on the British side to try to convince the EU that we could walk away from talks if progress isn’t made – others have raised concerns that this is apparently being considered. The impact of Brexit so far • Since the referendum in June 2016, UK GDP growth has fallen well behind the OECD and EU average. • While the FTSE 100 and FTSE 250 have grown since the summer of 2016 – their performance is skewed by the proportion of overseas firms listed. When looking solely at UK-focused stocks, these can be seen to have underperformed significantly by comparison. • Labour productivity has fallen even further. • Inflation has risen and reduced ‘real incomes’. • The fall in the pound after the vote has not yet boosted exports. • Many of the least well-off parts of the UK rely heaviest on EU money – which serves to highlight the over-reliance on London. Many feel the sluggish GDP, UK stock performance, labour productivity, inflation, weak pound and London reliance will only be exacerbated when the UK finally leaves the EU in 2019. 5 Ways UK businesses can cope with Brexit: 1. Keep calm and hold steady 2. Remember the UK labour market is strong 3. Protect the UK employer brand 4. Overcome the great divide 5. Look after your people The process to exit the EU will take time and change will be very gradual — until it is not. It is of course easier to adapt if you are smaller and agile. And for now, the UK labor market remains one of the strongest in Europe. Keep up to date with the latest financial developments from JB Commercial Finance
Commercial Mortgages

The Financial Crisis 10 years on – What have we learned?

Ten years ago, failure of financial systems caused crisis and a economic disaster. Since the crisis, the Bank of England has been building a safer system supported by 2 factors - First, it has been given responsibility for the supervision of individual banks and building societies. Second is the creation of an authority in the Bank with new powers – the Financial Policy Committee – tasked by Parliament to monitor risks in the financial system that could cause problems for the wider economy. • Banks are now disciplined by a leverage ratio. This protects the system from risks and uncertainties that are hard to measure through risk weights and models. • Large banks are taking fewer risks trading in financial markets. • Banks are less dependent on each other - interbank lending has fallen by two thirds since the crisis. • The Bank of England’s first line of defence involves supervision of banks and building societies. • Second line of defence is to stress test lenders to make sure they have the strength to deal with very severe recessions without cutting back on lending. Banks are less dependent on short term wholesale market funding which has fallen from 25% of total funding in 2006 to just 10% now. By now, financing options for all stages of the small-business cycle can be somewhat limited although definitely more achievable through working with an independent financial broker. Typically, start-ups and unprofitable companies have relied on credit cards and home equity loans. As their businesses begin to thrive, they might often turn to bank credit lines. And when it’s time for the next big growth spurt, they usually get a small-business loan. Why not contact JB Commercial Finance today and discuss your options!

Peer-to-peer lending has increased among small- and medium-sized enterprises (SMEs)

The latest SME Finance Monitor, from insight agency BDRC, shows 32 per cent of the 130,000 firms interviewed were aware of P2P lending in the fourth quarter of 2017 When combined with crowdfunding, awareness of these forms of finance was 46 per cent. This was up from 36 per cent at the start of 2017. P2P provides a new platform for helping people secure loans. Small businesses and budding start-ups are starting to use P2P lending as an alternative option to loans and banks. What is P2P lending? P2P lending is a loaning platform. This platform allows an individual to get a loan from a different individual through a P2P network. There are facilitators who have websites for P2P lending. The facilitators liaise with people who are in need of money and connect them to people who lend money, otherwise known as investors. The facilitators are in charge of linking these two individuals together, in order to initiate a lending process. Once the individuals have been linked, they can discuss the amount of loan they need and are willing to give. Currently, with P2P, individuals have to submit a loan application on one of the facilitator’s websites. Who should use P2P lending Funding still remains a concern for many small and medium businesses, especially in the UK. P2P lending is a good option for small businesses that are not eligible for loans from a bank. In addition, the interest rates are often much lower than banks. It’s important to note that it normally takes 7-14 days for a loan to receive funding, which is quicker than the majority of banks. Why not contact JB Commercial Finance today for more P2P information and advice and find out if option of lending could help your small to medium business.

LENDING ADVICE FOR MANUFACTURERS

Are you a Manufacturing company and having trouble in getting approved for finance? The manufacturing industry can take a little time to turn a profit because of the requirement to spend a large capital on materials and general production prior to sales. Getting a small manufacturing business off the ground requires some significant support from lenders. What financing options are available for small manufacturing business owners? How to Improve Your Chances of Qualifying for Lending If you have a well-researched business plan in place, you're far more likely to get your loan application reviewed for approval. A good small business plan includes: - Research about your market - Projections of sales, - Clear chart of your business' organization, - Overview of your company - A plan for advertising your products. Choosing the Best Financing Option The most commonly used financing option is a loan. Small business loans from the government are usually offered at very low interest rates. You may also request small business assistance by applying for a government grant to boost your manufacturing business. If your manufacturing business will add jobs to the local area or help to stimulate the local economy, you may be able to qualify for a tax-exempt bond from the government. While this may not add a lump sum of capital into your company account, it will give you a substantial tax break that saves you money every year you're in business. Finding financing for your small manufacturing business may be difficult, but it is not impossible. Why not contact JB Commercial Finance today and discuss your options!

JB Commercial Finance: LATEST CLIENT CASE STUDY

We recently supported a new client that was introduced to JB via an accounts firm. The client was a wholesaler, had been established for 20 years with an impressive turnover of 4m with £100k profit. Looking to refurbish their property with a figure of 150k in mind, the client began to explore what options were available to them, starting with high street banks, being the most obvious choice. After an initial meeting, they were advised by the bank that the most that could be offered would be 80k, this would include a charge on the Directors home and take approx. 3 months to process. After being introduced to JB via their accounts firm, we explained how being an independent advisor would open up more opportunities for the client as a result of the wide network of financial providers that we work with. The process was a success for the client and we managed to approve the full 150k required by the customer within 48hours of application. Funds arrived within 7 days and the client was very happy with the fast turn around and easy process which did not cause them any down time for their business by several bank meetings. This case was a great example to show how an independent advisor can offer the same if not more than a high street bank. A more tailored service to suit the clients requirements and within a timeframe that worked perfectly for them and their new refurb project. Here at JB Commercial Finance, we work with our clients on a 1 to 1 basis to ensure that collectively, we can achieve what is required in a professional manner which is cost effective for the client,

Calling all IFA’s, Mortgage Advisors, Accountants…

Do your customers come to you with business finance you can’t deal with? We can help! JB Commercial Finance is fully authorised and regulated by the Financial Conduct Authority, and we are a proud member of the National Association of Commercial Finance Brokers. We are keen to assist with all: • Commercial Mortgages • Bridging Loans • Development Finance • Invoice Finance • Business Loans Perhaps your client might be looking for a business working loan but have no property to secure against, or a bad creditor that has put them in a tight spot Our experience in the market and strong lender ties mean that no matter how complex or difficult the situation, we are placed well within the market to assist with your enquiry. This means that working with us will not only unlock more profit from your existing clients, but will increase the chance of referrals for your own business services. As a commercial finance introducer, your clients will be able to enjoy all the benefits of our extensive range of lenders to ensure you can get the most out of each enquiry. If relevant and appropriate, introductory commissions would also be available along with forward referrals from JB to clients in the market for relevant services that might be offered.

How does the summer affect business?

Over the summer months, there are a lot of factors that might result in a business being forced to operate with a lack of resources. From children’s school holidays, family summer holidays and the increase in temperatures, these items can all play a part in the business’s performance. Solicitors/holidays, summer as an excuse It can be very frustrating if your business is in the process of a legal pursuit. Perhaps a client that has not paid their invoice or maybe there is a civil matter that has resulted in cost increases through the interim period whilst the claim is being argued. What could possibly increase the frustration at this point? Working with a solicitor that for some reason has now started to delay their responses to supply updates on the situation, simply due to them going on their summer holiday or being short staffed as a result of a colleague doing the same. This continues to cost the business money, simply being advised that nothing can be done due to staff being on annual leave. The Solicitors Regulation Authority offers informative advice in relation to the billing/ working hours and how you can examine your costs submitted by your Solicitor. Items might include timescales, prices per hour etc but would be a great place to initiate any process that might assist in either lowering costs or giving the claim a helping hand forward. Planning cash flow for summer Cash flow is crucial to all businesses but can particularly be an issue throughout the busy summer months when staff might take advantage of the hot weather and take annual leave. Also you might find that suppliers are more difficult to work with as they also might have a staff shortage for the same reason. It is important for businesses to be even more vigilant about managing cash throughout these times. Have cash reserved. The first step to managing cash flow is to try and ensure that there is a cash reserve for the business. Think about alternative sources of finance. If the business has been turned down by the bank for finance, there are some alternative sources of finance to help get over those quiet or seasonal periods for the business. These include: Unsecured Loans An unsecured loan is a loan that is issued and supported only by the borrower's creditworthiness, rather than by any type of collateral. Unsecured loans might be appropriate for certain business owners as they are generally more convenient, efficient, a speedy process that do not require the involvement of assets or personal guarantee’s. Consider invoice discounting and factoring. Perhaps the most straightforward way of solving seasonal cash problems. If the company develop cash flow issues, this can be exacerbated by customers or clients who are on longer payment terms than normal or those that always tend to pay late. One way to regulate this is to look at invoice factoring and invoice discounting. These facilities will enable the business to draw cash from invoices immediately, all for a relatively small cost. This can provide instant cash injection into the business which could be vital during a quiet period. Used regularly, it can help to ensure a healthy cash flow throughout the year.

Do you have bad credit?…

Your business finance options may be expensive and somewhat limited If your small business is still in its early years, the chances of securing a loan from a traditional lending source can be quite unpredictable. Banks can sometimes disapprove even healthy small businesses, and will turn down if a credit score is not quite high enough. Why does bad credit affect loan options? Lenders are looking for a reliable borrower; they want to see that debts are paid on time and in full. They want to know how many different kinds of credit you have and how long you’ve been borrowing money. Your credit score summarizes this information for lenders, giving them an easy way to evaluate your trustworthiness as a borrower. If you’ve got bad credit, you may find you don’t qualify for a lender’s larger loan products, low APRs, or certain repayment schedules. Lenders don’t want to take the risk that you may not repay a hefty loan. Moving forward on your path to success Having poor credit never feels good, especially for an entrepreneur trying to get their small business off the ground. • Is taking out a secured loan against your home something you have considered? • What is the value of your home in terms of business finance? As a homeowner it's possible that you have a significant amount of value locked up in your home, and if you prefer to use your own equity and ability to raise cash rather than borrow from the banks, then utilising the equity might be an option to consider. Many banks are still reluctant to lend money to business and one of the ways in which business owners can still dictate the terms of their own success is using their own equity. There are some big advantages for your business if you decide to borrow against your home: You can borrow a lot more if you choose a secured loan vs an unsecured loan. It isn't unusual for lenders to offer higher values, when it is secured against your property. What are the most common facilities available for financing a business? A commercial mortgage is a loan secured by commercial property, such as an office building, industrial warehouse, or housing complex. The proceeds from a commercial mortgage are typically used to acquire, refinance, or redevelop commercial property. A bridge loan is a type of short-term loan, typically taken out for a short period, 2 weeks to 3 years pending the arrangement of larger or longer-term financing being arranged. Development finance is funding for either major new building projects or comprehensive renovations. New housing estates, office blocks converted to flats, etc. Factoring is a financial transaction and a type of debtor finance in which a business sells its accounts receivable (invoices) to a third party at a discount A business will sometimes factor its receivable assets to meet its present and immediate cash needs.

Unsecured business loans – an update

Unsecured business loans – an update As many of you know, I get heavily involved in quick unsecured lending to businesses. It can be quite eye opening to them when they realise what’s available, the timescales involved and the ‘non-traditional’ forms of repaying these loans. In response to this, here is a quick bullet point summary of the current marketplace regarding unsecured business loans: Its still a good time to apply for a business loan: If you are a profitable business who has a valid reason for looking to borrow funds then its worth consideration. Quick loans are available and can be in your account within a few days if required and availability is strong. Caveat – this may not last forever! Banks are continuing to move away from the lower end of the SME marketplace. Unless you have a well-established relationship with your bank, you are unlikely to be able to receive an unsecured loan over £25,000. Banks are still moving towards focusing on larger businesses and well secured lending against strong debtor books and property. Larger amounts which would traditionally require background security are still available. Banks have usually looked for security (a charge over an asset or property) when lending reaches £25,000. This remains the case. Unsecured loans through peer to peer lenders are still available up to £500,000! Clearly this is exceptional but loans up to a couple of hundred thousand pounds are still readily available with funds available within a few days. Lenders are being more creative regarding underwriting and repayment profiles. Some lenders are more concerned with bank account conduct than trawling through the last three years of accounts. This has led to a more flexible approach to repayments, with shorter terms and more frequent repayments (daily, weekly rather than the traditional monthly) becoming more common. Summary: If you are thinking of borrowing money for your business, then don’t put it off. If you have been to your bank, its worth a second option from an unsecured lender – especially if time is of the essence! Don’t be put off by the amount – larger loans are available on an unsecured basis if your business can afford it. Have an open mind with regards to repayment options – the frequency term of repayment may be new to you. If you would like to know more, please get in touch. James

Working capital finance

The UK’s economic growth is predicted to be between 1% and 2% this year and sterling is currently competitive in foreign markets. This means that there are excellent opportunities for businesses that want to invest in future growth. However, for many smaller businesses, finding the funds for these plans can be a challenge.  As well as business loans from the bank, there are grants and private investors - even crowd funding could be and option. Another possibility that can work for well-established smaller businesses is working capital finance. Working capital is the difference between your company’s current liquid assets (such as stocks, debtors and cash at bank) and current liabilities (essentially, your creditors). Working capital finance helps you to take advantage of opportunities or to launch a new short- to medium-term strategy. It can be based on fixed assets that you own or on the strong performance of your business. For short-term needs a business overdraft can be useful, but it will usually be limited to a small amount. Banks are increasingly reluctant to provide them too. Invoice finance or invoice discounting can speed up your payment cycle and remove the uncertainty of overdue payments. Once you have sent your lender a copy of your invoices a pre-agreed proportion of each invoice will be deposited in your account. This money can then be used to pay bills, repay debt, or as part your business growth plans. Of course there is a fee for the service and it might not release enough funding. For a secured working capital loan, you will need to use your business assets as security. The assets you have available will restrict the amount you can borrow. Unsecured business loans of up to £500,000 can be available if your credit rating is strong, although a personal guarantee might be needed. This means that your lender could seek to recoup any unpaid loan from your personal assets if your company became insolvent. If you accept card payments from customers, you might consider a merchant cash advance. If you are a retailer or run a hospitality business for example, you could receive a percentage of your average monthly card revenue (such as 125%). Repayments are taken at the source as a percentage of your future card revenue. If your tax liability is limiting your working capital, funding is available for paying VAT or corporation tax. A loan for your tax bill will allow you to spread the costs over three to 12 months, helping to release cash for your business plans. With so many types of working capital financing available choosing the right option for your business can be confusing. We are always happy to provide advice, so please get in touch.

Variable or fixed rate lending

Whether you are considering borrowing to buy a house or for your business, one of the things you will need to consider is whether you want a fixed or variable rate loan. Fixed rate lending If you choose a fixed rate mortgage the interest you pay will stay the same for a set period which is usually between two and five years, although some longer terms are available. A fixed interest rate means that you will know what your monthly repayments will be throughout the term. This will make your financial planning easier and, depending on variations in the interest rates you could save money. However, you might not have the flexibility to pay off some of all of your loan before the end of the term without a significant financial penalty. If interest rates go down, you will continue to pay the higher fixed rate. At the end of your fixed rate term you will normally move onto a variable rate and you could find you are paying a lot more each month. Variable rate lending A variable rate loan means that the interest rate you pay can go up and down, according to the market. There are two main types of variable rate loan. Your lender can set a standard variable rate which might increase or decrease at any time. For example, the rate you pay might be adjusted when the Bank of England’s base rate changes. An alternative is a tracker rate, which follows the movements of another interest rate, such as the Bank of England’s base rate. When the base rate goes up or down, so will the tracker rate. However, the rate you pay is normally higher than the rate being tracked. The main benefit of a variable rate mortgage is that, if base rates go down, your repayments will go down too. However, you will also pay more if base rates go up. Your choice A good mortgage broker will explain the differences and the implications of each option to you. However, the choice is yours. Your decision will depend on your mindset and what’s important to you. Your priority might be the ability to plan, especially if your monthly cash flow has little room for manoeuvre. If you are confident about your marketplace and your business, you might be comfortable with a certain level of risk. You might be happy to take advantage of turbulence in the marketplace. This can be especially important if you want to retain the flexibility to pay off all or part of the loan amount without harsh penalties. However, if interest rates rise significantly you might find that you loan quickly becomes uncommercial. We are always happy to discuss the best borrowing options for your business, so please get in touch.

Toys R Us – why did it fail?

A few days ago we discovered the world’s favourite place for children’s toys and accessories had lost its magic. Many of the products that children love are still great favourites that sell well in stores and online, so what went wrong for Toys R Us? Wrong place In the early 1950s, when the Toys R Us started in America, out-of-town stores with easy access and parking were popular with customers and cost-effective for businesses. When Toys R Us moved over to the UK in the 1980s, this model still worked. However, in recent years, these locations have become less popular as more stores - especially supermarkets ­­- started to diversify, introducing highly price competitive toy aisles. And, of course, the ease of online shopping has also made a difference. Wrong products The internet has not only brought a new way to shop, it’s also changed the leisure-time expectations of children and adults. Games and apps can be downloaded instantly and content can be streamed to any mobile device anytime, anywhere. To compete in this marketplace successful retailers gave their customers a reason to choose an immersive and engaging in-shop experience. In contrast, Toys R Us treated digitally enabled toys and entertainment as simply another product. They missed the important signs that their marketplace was rapidly evolving. Wrong price offer Toys R Us didn’t capitalise on their brand, which included a promise to ‘honour a price match for in-store purchases’. Many buyers, looking for a specific Barbie ® or LEGO ® product, for example, bought where they believed they would find the most competitive price. Few knew about the price match promise. And finally In 2005 the already struggling Toys R Us business was bought by a private equity venture. The deal left the company with debt equivalent to 82.7% of its total capital. It was assumed that reduced operational costs would allow the company to pay the interest on the debt. It was also assumed that the market wouldn’t change dramatically. As we now know, both of those assumptions were wrong. Conclusion Of course this is a very simple version of what happened, but it does highlight that if you fail to keep your distribution, products, pricing and promotions up to date, your business will suffer. If you make financial assumptions you need to have very good evidence and great contingency plans, in case things change. If you would like to discuss the financial options for your business, please get in touch.

Will Brexit bring on a recession?

An economic recession is defined as a decline in gross domestic product (GDP) – the market value of the goods and services a country produces - for two or more consecutive quarters. In the USA private equity investors are predicting a downturn in the UK’s economy over the next two or three years as a result of Brexit. Is there any foundation for their predictions and, if so, will it amount to a recession? Predictions Predictions that the referendum vote to leave the European Union (EU) in 2016 would immediately lead to an economic crisis were, fortunately, wrong. In fact, growth in the UK’s economy was estimated at 1.8% in 2016, second only to Germany's 1.9% amongst the world’s leading industrialised countries. Growth continued at almost the same rate in 2017. Some gurus are now predicting that another global recession might be around the corner. If this happens Brexit might be blamed for the impact in the UK.  There will certainly be much debate around whether it is better or worse for the UK to be outside the EU at the time. Timing Our departure, scheduled for at 11pm on Friday 29 March 2019, is unlikely to bring about instant changes. The agreed 21-month transition period has been designed to smooth our way into the new post-Brexit world. So, what is likely to happen between the end of March next year and 31 December 2020? Most importantly, businesses will be able to make their plans based on a clear understanding of the final Brexit agreement around issues like trade, travel and security. They will be able to carefully examine the implications of the deal while free movement of goods, services and people continues with the EU. Businesses will also be able to make their decisions in the wider context of the worldwide economy. During this period, the UK will also be able to make its own trade agreements, ready to take effect on 1 January 2021. In summary The International Monetary Fund (IMF) says that we need to make our economy more efficient and highlights that a weaker pound is reducing people's spending. It’s probably true that some businesses will put their investment plans on pause until the situation is clearer. In reality, driving towards a more efficient economy and a measured approach to business investment could be very good for the UK’s economy and for UK businesses. If a recession is coming, it is likely to be as a result of changing conditions globally, rather than Brexit. Whether the UK will be in a better or worse position as it moves away from the EU is difficult to say. UK businesses that are preparing for an uncertain future by making sure their efficiency improves and that their investment plans have been well considered are likely to be in a very strong position. If you would like some professional advice about investing in your business, then please get in touch.

What is development finance?

Whether you’re taking on the renovation of your own home or a property refurbishment project, short-term development finance can get you underway with funding for property purchases and building costs. Because you will add value by developing a property or site, you will be able to cover the cost of your loan by selling for a higher price or charging a higher rent. There’s certainly still an appetite for these projects in the UK and district planning authorities are more willing than ever before to give permission. The DHCLG (Department for Housing, Communities and Local Government) says that in 2017 planning authorities granted 49,600 applications for both major and minor residential developments, and over 10,200 applications for commercial development projects. Residential properties Development finance is available for everything from the renovation of a single residential property to construction of a large-scale housing complex. Once the work is complete, you can sell the property to pay off the loan and retain the profit. Otherwise, you could retain the property and charge a premium rent that will cover the loan and also give you an income. Commercial properties You can also choose this route to fund renovation or refurbishment of offices, shops, warehouses or factories. You can use it to give the property a makeover or to make good the fabric of a building. New builds Alternatively, you might need funding for a new building project, whether you’re going to demolish an existing property to build on the site or have an opportunity to build on a vacant plot. How much? The amount you can borrow for property development is usually calculated as a percentage of the property’s value, once the work is complete (the gross development value or GDV). You might be able to borrow the equivalent to 60% of the GDV, which is likely to be around 75% of the costs of the completed project. Usually funding is available for all the building costs for residential or commercial properties and for part of land costs (perhaps up to 50%). The money will normally be released in instalments as certain stages of the project are completed and certified. The costs All the fees should be properly explained to you before you make a decision. Once you receive a formal offer letter from your lender and accept the conditions, you will be expected to pay a commitment fee of around 2% of the total loan. There’s also likely to be a fee of around 2% for your broker. There are likely to be fees to pay for a solicitor and surveyor for valuations and assessments for instalment payments, as well as legal and administrative fees. You can normally pay in monthly instalments or you can ‘roll up’ the interest with the amount borrowed and pay it all back when your project has been completed and sold. If you defer your payments until the end of your project you are likely to pay back more in total. If you’re interested in development finance, we recommend you take the advice of independent broker. We will be happy to explain your options, so please get in touch.

What is working capital finance?

What is working capital finance? The UK’s economic growth is predicted to be between 1% and 2% this year and sterling is currently competitive in foreign markets. This means that there are excellent opportunities for businesses that want to invest in future growth. However, for many smaller businesses, finding the funds for these plans can be a challenge.  As well as business loans from the bank, there are grants and private investors - even crowd funding could be and option. Another possibility that can work for well-established smaller businesses is working capital finance. Working capital is the difference between your company’s current liquid assets (such as stocks, debtors and cash at bank) and current liabilities (essentially, your creditors). Working capital finance helps you to take advantage of opportunities or to launch a new short- to medium-term strategy. It can be based on fixed assets that you own or on the strong performance of your business. For short-term needs a business overdraft can be useful, but it will usually be limited to a small amount. Banks are increasingly reluctant to provide them too. Invoice finance or invoice discounting can speed up your payment cycle and remove the uncertainty of overdue payments. Once you have sent your lender a copy of your invoices a pre-agreed proportion of each invoice will be deposited in your account. This money can then be used to pay bills, repay debt, or as part your business growth plans. Of course there is a fee for the service and it might not release enough funding. For a secured working capital loan, you will need to use your business assets as security. The assets you have available will restrict the amount you can borrow. Unsecured business loans of up to £500,000 can be available if your credit rating is strong, although a personal guarantee might be needed. This means that your lender could seek to recoup any unpaid loan from your personal assets if your company became insolvent. If you accept card payments from customers, you might consider a merchant cash advance. If you are a retailer or run a hospitality business for example, you could receive a percentage of your average monthly card revenue (such as 125%). Repayments are taken at the source as a percentage of your future card revenue. If your tax liability is limiting your working capital, funding is available for paying VAT or corporation tax. A loan for your tax bill will allow you to spread the costs over three to 12 months, helping to release cash for your business plans. With so many types of working capital financing available choosing the right option for your business can be confusing. We are always happy to provide advice, so please get in touch.
James Blacklaws - JB Commercial Finance Leicestershire

Economy Finances – What would you like to know?

Economy finances – what would you like to know? For a start – what does it mean? In simple terms it’s about how decisions about money are made to make more money. The most critical factor is uncertainty, because financial markets are always changing. Or, to put it another way, it’s like your personal finances; you know you need to pay off your debts, save as much as you can and protect your future security. However, all of these things might be out of your control if your car breaks down or the central heating fails. For the UK, one of the biggest financial uncertainties is the outcome of Brexit. On 1 January the Financial Times reported some fairly gloomy views from economists in its annual survey. Forecasts for UK growth are around 1.5% this year with reduced consumer spending and reluctance to invest. However some experts think that the fall in the value of the pound following the referendum will put the country in a strong position for exports. More recently the National Institute of Economic and Social Research (NIESR) gave a growth estimate of 1.9% for this year, based on the growing global economy and the competitive value of the pound. UK businesses that are ready to take advantage of worldwide opportunities for goods and services could be in a strong position. While the Bank of England is expected to increase interest rates this year, they are likely to remain relatively low. This will mean that borrowing will remain a viable option for businesses interested in global growth.
James Blacklaws - JB Commercial Finance Leicestershire

Changes to Dividend Tax

Changes to Dividend Tax From 6 April this year the tax-free allowance for people who receive income from dividends will be cut from £5,000 to £2,000. You will be affected if, for example, you receive dividends outside your individual savings account (ISA) allowance or pension. If you are a basic-rate taxpayer you will pay 7.5%. Higher-rate taxpayers will pay 32.5% and the highest rate will be 38.1%. The Government estimates that 2.3 million people will pay more tax as a result of this change. The average additional tax bill is likely to be around £315 but, of course, many will pay more than this. One option to avoid this additional tax bill is to transfer any dividend-paying shares that you hold into an ISA. However, this can’t be done directly. Your shares will need to be sold and bought back again inside your ISA. The process is known as ‘bed and ISA’ and costs are involved, so it’s important that you take good advice about the pros and cons of this approach. For example, there will be dealing costs for the sale and Stamp Duty at 0.5%. If the sale value of your shares exceeds your annual allowance of £11,300 you could also be liable for Capital Gains Tax. If you are a lower rate taxpayer this will be 18% or 28% if you pay a higher rate of tax. There’s also a risk that you could sell your shares at a lower price than you can buy them back inside your ISA. You could also consider moving your investments into pensions to take advantage of your £40,000 annual limit, depending on your current income. You might also be able to transfer assets to your wife or husband to put into an ISA or if they have an unused dividend allowance. If you would like to know more, please contact your accountant.
James Blacklaws - JB Commercial Finance Leicestershire

Three lessons small business can learn from Carillion collapse

The collapse of the countries second largest construction company, Carillion, has caused panic amongst many SMEs in the UK who were exposed to this toxic company. The knock-on impact will likely take several months (or years) to fully be realised, as many smaller businesses take on additional debt to survive or tighten their expenses to respond to bad debts or a reduction in cashflow. Amongst the chaos, there are lessons to be learnt for SMEs businesses in this collapse. Lessons which may have saved many small businesses facing ruin in 2018. 1.Spread your debtor book: I would hazard a guess that of the businesses who deal with Plcs in the country, at least half would go under if the Plc went under first. Its only natural to chase larger customers and continue to increase your exposure when you finally ‘catch the big fish’. However, this can lead to disaster! Larger firms generally have longer payment terms, are less forgiving with regard to quality of work, and are more likely to take advantage of their position in the pecking order. Why not enjoy the benefits of larger clients with a balance of smaller, more regular income from smaller jobs? At least this way your business is more likely to survive the impact of a Woolworths/BHS/Carillion failing! But what happens when they fail? You can protect yourself from this with. 2. Consider debtor insurance: Nobody likes paying insurance premiums, but I am sure many businesses wish they had cover like this today. A debtor insurance policy usually covers the whole of the debtor book (some ‘spot’ deals are available) and insures the book up to a certain percentage in the event of debtor failure. For example, if your debtor book was totalling £200k and Carillion made up £150k of that (75%). In the event of Carillion’s failure, an agreed percentage (say 70%) of the outstanding debt would be claimed for under the insurance policy. So, in this example the small business would receive £112.5k back from the insurance company against the debt to Carillion of £150k. Not ideal but a £37.5k loss is a lot better than £150k! Indeed, this insurance would be likely to save a small business in the above circumstance. 3. Check your clients out – no matter the size: This one seems obvious but in the pursuit of larger clients, is easily overlooked. Some facts: On 10 July 2017, Carillion issued a trading update that referred to a £845 million impairment charge in its construction services division As a result, the contractor was demoted from the FTSE 250 Two days later, it was revealed that Carillion's losses for the six months ended 30 June 2017 totalled £1.15 billion In a further profit warning, on 17 November 2017, Carillion said it would breach banking covenants the following month, with full year debts set to reach up to £925m If you continued to work for this business after this then it is hard to feel a huge degree of sympathy for you. It is very easy to obtain financial information about trading businesses (especially Plcs) via several online portals for a nominal fee. You don’t even need to read the financial press! The collapse of Carillion is potentially a devastating blow to many small businesses, employees and throws the future of several large Government construction projects into doubt. Despite this, lessons can be learnt, and steps can be taken by small businesses to take responsibility, protect themselves and make sure that the failure of a larger customer doesn’t bring them down as well.   James Blacklaws  
James Blacklaws - JB Commercial Finance Leicestershire

Provocative Marketing at a local level – I don’t get it!

I was speaking to a reasonably well known local businessperson recently and he declared it a FACT that provocative marketing works. On further questioning it seems that they felt that by deliberately upsetting 50% of your potential audience then the other half will flock towards you and be desperate to pass business your way. In other words (to quote a buzz phrase) he was #findinghistribe. Is it just me or is this daft? First, a couple of points for clarity: I firmly believe that you should speak your mind and stand up for your principles. This should not be confused for deliberately being a dick! This will inevitably put some people off you and your business and that’s ok! It is very different for a large multinational company to use marketing this way. We have seen the likes of Benetton consistently use marketing THEY KNOW will upset people. This should not be confused with a small local business in a tight knit business community. I trade from Leicester and do a majority of my networking in the city or within about 25 miles of it. While this is a large geographical area the business community is reasonable small – and people talk. I am fond of the phrase that ‘Leicester is a village’ and the same applies for most business hubs. In a village, gossip spreads, mud sticks and reputations can be destroyed in a matter of minutes. Why risk this for some short-sighted attempt at keeping up with the latest marketing fad?? I see people adopting this method to get themselves attention on a variety of formats – mainly online on forums (especially the 4Networking forum sadly) and with online videos. I would like people who undertake marketing like this or have read a book/seen an ‘expert’ suggesting they do this to remember the following: Your footprint on the internet lasts forever. You may have a business now but what if you need a job in a few years? Would you employ yourself? Marketing fads come and go. The next one will be to ‘love everybody’ Why upset half your potential market for no apparent reason? Seriously, why? Offence is taken, rather than given sure, but why try and upset people. Surely we left the playground behind year ago? You may think you are being a big man and live in an echo chamber but never forget that people talk and business people have long memories. Lastly – just don’t be a dick! James Blacklaws
James Blacklaws - JB Commercial Finance Leicestershire

Are you really ‘busy’?

I am writing this while watching my eldest son swim at a Leisure Centre on a Wednesday night. I usually use this time to either go to the gym or if I am trying to avoid that, do some work. Usually, this isn’t high intensity work but simple day to day tasks which don’t need to be done in working hours such as emailing, some compliance work or similar. As I look around I see parents (and guardians) on their phones, chatting or simply staring into space and it got me wondering why? Why are they not using this time effectively? Why are they not taking advantage of a couple of hours peace and quiet to do some reading or work? And I wonder if these are the same people who are always moaning about how busy they are? As you network around local business communities you always find those who get on with things and those who are always going on about how busy they are but when challenged can’t actually tell you what is making them so busy. Are these the same people who close their business at 5 o’clock and watch three hours of TV every evening? Are these the same people who turn off the mobile at 3pm on the basis that if they call back the following morning this is still within three working hours so is an acceptable level of service? Are these the same people who moan and moan when you ask them to do something to help you but seem to be out every evening on Facebook? I have no problem with people doing what they like BUT if you are going to run a business then surely you accept that sacrifices must be made? When you next complain about being busy please think about what YOU would do when sitting next to the swimming pool! James