The need for funding isn’t complicated; a company wants to borrow money to either navigate its way through a difficult patch; take advantage of an opportunity; or simply grow the business.
So, the solution shouldn’t be complicated either. However, some lenders insist on making SMEs ‘jump through hoops’ before a decision is made, sometimes weeks later, as to whether they will receive the money or not.
We know this causes immense frustration to both the broker and the SME, causing some to miss ‘the moment’ the cash was needed, or make them find another funder.
At Reward, we believe that if the amount they want to borrow is covered by sufficient security, the company can afford the monthly payments, and the business is well run, there should be no reason why the funds should not be with them in a few days. In exceptional circumstances, we have been known to deliver the funds in a matter of hours.
Lending products should be straightforward too, in fact we have honed it down to a couple we have called Business Finance and Asset Based Solutions. The former is where the money can be secured against one asset class, such as property, the latter where it may require a combination of assets, such as debtors, property, plant & machinery and, in some instances, stock. Both enable companies to borrow as much as £5m for up to 36 months.
There’s no need for the paperwork to be complex either. Whether the company is borrowing against one or multiple assets, it should still be classed as one solution, thereby it only needs one legal agreement.
Not all companies need the money in one lump sum, it therefore makes sense to allow them to use the loan like an overdraft, which means they just borrow what they need, with interest only being paid on the amount drawn down.
This simple approach to lending has certainly proved to be a successful formula at Reward Finance Group, with ten years of continuous growth and the £100m loan book milestone surpassed last month.
It is an approach that can be applied to any sector too.
For example, we helped to get a company through a difficult patch, when we provided finance to a family restaurant needing a short-term capital injection to cover its costs when normal service was interrupted due to various lockdowns. The money was used to pay suppliers, rent, utilities and staff who worked throughout the pandemic, so they would be up to date with everyone when they reopened. We helped them not only survive but come through it stronger than ever with the loan repaid in full.
When it comes to helping a business to grow, we provided finance to a specialist automotive engineer, which has built up an excellent reputation for designing and building bespoke Land Rover Discovery accessories and specially designed six-wheel Hi-Lux chassis for emergency vehicles. This led to orders flooding in from the UK, Poland, and the Czech Republic. With plans to double the 15-strong workforce, and with expensive parts to buy, it naturally put quite a burden on working capital. We quickly provided the additional funds to help it expand and meet its growing order book.
As for helping a company grab an opportunity, we provided finance to allow a business to snap up a large industrial unit when it went under the hammer at auction. We also provided additional funds to enable it to subdivide the property into smaller high spec units, making it ideal for start-up businesses.
With a presence in Leeds, Manchester, and Birmingham, and plans to expand to other parts of the UK, brokers can be assured that we will continue to keep things simple and explore every opportunity to quickly provide funding solutions for their clients by being flexible and pragmatic.