1 Invoice Finance Getting On With Your Business Winter 2011 THE DIFFERENCE THE NEwSLETTER OF LEUMI INVOICE FINANCE Let s get on with your business STRENGTH FLEXIBILITY EXPERIENCE ENTHUSIASM EXCEPTIONAL SERVICE Inside this issue: Invoice finance making the right choice... Lifting confidence for growing businesses... Deal successes... Regional round-up & contacts...
2 Invoice finance making the right choice The market is awash with funding options and it can be a minefield when trying to make important decisions about business finance. Traditional bank overdrafts and loans, the long-established methods of financing business start up and growth, no longer offer an easy solution as many high street clearing banks continue their reluctant approach to extending credit, both to new and known enterprises. Many businesses looking to improve their cashflow are keen to find out more about the benefits of invoice finance as a viable funding tool. We hope the following pointers will help... which is product and sector driven, and we hear many reports of businesses suffering from the formulaic approach adopted by larger banks. Limited product portfolios and low touch credit management due to a relatively high client to client manager ratio can combine to make clients feel there may be little understanding of their current and future needs. Particularly in times of uncertainty and economic instability business need more than a relationship that is managed at arm s length. Looking at invoice finance options, what are the main benefits over the traditional overdraft? Both factoring and invoice discounting are excellent solutions for boosting business cashflow in many business-to-business scenarios and across a wide range of sectors. Both solutions give you immediate cash availability, by bridging the gap between you raising your invoice and your customer paying that invoice. Unlike an overdraft facility, as financing is linked to your current sales, the level of funding available grows as your business grows. This makes invoice finance an extremely flexible solution compared to an overdraft and can greatly improve your cashflow position. what should prospective clients be looking for in an invoice finance provider? Having the right financing package in place from a provider who can be relied upon to support the business in the longer term is vital. Businesses should always consider the reputation of the finance provider and assess how well they might meet your requirements. For example, how are clients managed, will you have a dedicated client manager, how quickly are funding decisions made and how flexible is their approach? Consider how they support businesses with a high degree of seasonality in their sales cycle, or what support you may be offered if you decide to enter the export market. Look at any sector specialisations and find out about other clients in similar sectors and at similar stages of business growth. Recent client testimonials will help demonstrate their approach and show how they respond to specific challenges. Always look for a provider who tailors the solution to your individual needs, supported by good relationship management, rather than being product or sector driven. Is the approach of independent providers very different from the high street clearing banks? Many of the larger banking operations are driven by SIC codes to help determine risk profile. This can result in an approach By contrast, taking a solutions driven approach which is client focused and inclusive right from day one is increasingly valued by both clients and their professional advisers. Many independent providers, less constrained by rigid formulas, are well placed to offer exactly this approach. Their lower client to client manager ratio and overall can do attitude to building long term partnerships can make a big difference. what is different about Leumi Invoice Finance? Clients choose us for a number of reasons. Because we are independent from the high street clearers, whom many customers continue to regard with some suspicion, we can offer greater flexibility and innovation in our funding solutions. Unlike many independent lenders however, Leumi Invoice Finance has the financial strength and stability afforded by being part of a major international financial group, Bank Leumi (UK) plc, which has been in operation for over one hundred years. Where speed is of the essence we can move quickly. Short decision making lines give certainty and fast credit approvals and continuing involvement of the senior team throughout the relationship all contribute to an efficient process which benefits both clients and business introducers. Our entrepreneurial approach comes from having started and built businesses ourselves. CEO, Paul Hird and MD, Phil Woodward, have both experienced the highs and lows of growing businesses and understand the challenges faced by our clients. We actively support the regional business communities to help boost the cashflow of numerous healthy businesses, and work with clients from a broad range of sectors, including recruitment, engineering, distribution, healthcare, printing and manufacturing. We ve had a tremendous response from both dealmakers and clients, and Leumi Invoice Finance continues to grow, winning many new deals whether supporting new starts, pre-packs, refinancing or organic growth. As businesses across the UK increasingly seek flexible and reliable forms of funding to support current and future growth, Leumi Invoice Finance is well placed to provide a fast response and assist growth in continuing uncertain times.
3 Lifting confidence for growing businesses Welcome to The Difference, the newsletter from Leumi Invoice Finance. This Winter 2011 issue comes to you at a time of continuing uncertainty in the markets and prompts us to look at the ever increasing popularity of invoice finance as businesses seek to access reliable forms of alternative funding to fuel their growth. Here at Leumi Invoice Finance we re delighted to have supported a wide range of growing businesses across the UK and we ve included a few of our recent deal successes in this edition. There continues to be much divided opinion amongst commentators about the state of the economy and fears of a double-dip recession never seem far away. Banks continue to be reluctant to extend credit, even to well established businesses, and many successful businesses have been prompted to look elsewhere for a more long term financing partner. This all contributes to creating a mood of caution amongst prospective clients when entering into new finance agreements or transferring from one funder to another. Over the last few months, we ve seen many clients seeking alternative options. Our growing regional sales team covering Leeds, Manchester, Birmingham, London and the South, report that the pipeline for new deals is looking very positive. Our ability to underwrite deals up to 1m in-house means that, unlike many of the larger financial organisations, we can turn around deals very quickly to the benefit of both client and introducer. To meet the requirements of our growing client portfolio we have increased our client management team to three, adding valuable industry experience and expertise. This allows for a very low client to client manager ratio, enabling our service levels to remain high. This is particularly important at times of economic instability when clients may require a more hands-on relationship management approach. Our proactive culture and ability to move quickly to service our clients needs help to set us apart from competitors. Our clients and their advisers certainly notice the difference, and despite difficult market conditions we are confident that our projected targets will be achieved and predict a very healthy final quarter of Gary Fortune Tel: As your business continues to grow... We will make sure that as your business develops we are proactive in helping to maximise your liquidity. The full asset based lending capability we have as Leumi ABL means that many other funding options can be structured as your business grows. For larger, more established businesses seeking to improve working capital, make an acquisition, MBO/MBI or simply support organic growth, Leumi ABL can provide funding of up to 25m. Leumi ABL provides invoice finance, stock finance and plant and machinery finance. In conjunction with our parent, Bank Leumi (UK) plc, we can also offer trade finance, property finance and commercial banking. Our ability to structure multi-facility deals can often result in higher levels of funding for our clients.
4 Deal success stories Despite the continuing choppy economic backdrop, business confidence is growing, clients are forging ahead with growth plans and Leumi Invoice Finance is picking up some interesting deals. Here are just a few recent examples Progressive (UK) Ltd A professional car cleaning business specialising in providing car cleaning services to car dealerships was looking to improve their working capital and assist further expansion plans. Leumi Invoice Finance responded quickly, working to the client's timeframe which was critical to the deal, and a 225k confidential invoice finance facility was arranged. Leumi Invoice Finance was able to boost working capital to help support the business s sales drive and growth. Southern based haulage company (confidential) This business required funding to provide the cash to run a new fleet of vehicles. By using an invoice discounting facility they were able to show a more positive balance sheet that allowed licensing rules for the vehicles to be met. Leumi Invoice Finance fought off competition from two high street banks and provided a 600k confidential invoice finance facility to replace a 150k overdraft. The new client was impressed by the quality of service and access to decision makers which contributed towards a smooth take-on process with Leumi Invoice Finance.
5 Edenbrook Partners New start business, Edenbrook Partners, is an insurance focused executive search business based in London. Funding was required at short notice when the business got off to a quick start and had two contractors to pay within just a few months of the incorporation of the business. Leumi Invoice Finance reacted promptly and provided a 350k invoice finance facility. Patrick Goodwin, MD of Edenbrook Partners, said: I met with Leumi Invoice Finance when I set up my business. Following the initial meeting Leumi had provided a full offer within three days and we were able to draw down our first payment within two weeks. The speed at which they were able to operate saved me any worries about how I was going to fund the rapid growth of the business. Leumi Invoice Finance Sales Manager, Robert Wakeford, added: I have known Patrick a number of years and when he spoke about setting up a business of his own I had no hesitation in backing him. Within a few weeks he was a client! Manufacturing company (confidential) This was a leveraged MBI of a manufacturing company turning over 3m per annum. The deal was almost complete when Leumi Invoice Finance was introduced but they reacted swiftly to complete the deal within a couple of weeks. Leumi Invoice Finance provided a 500k confidential invoice finance facility to assist with the acquisition.
6 Regional round-up and sales contacts South and London The market appears to be more active again after the usual summer lethargy and advisers seem to be picking up business that traditionally may have gone to the high street banks. The general feeling is that businesses are still not being supported by the high street banks, including many solid and successful businesses that just require some support. I think the next six months will continue in this trend with more businesses seeking alternatives to the traditional bank route. Even speaking to the banks they freely admit that lending, to start ups especially, is restrictive. Businesses feel more supported working with an organisation that has the time and capacity to understand their business and requirements and, importantly, an appetite to lend to quality businesses. I have seen a number of start ups recently which is a good indication of increasing confidence as we approach the end of David Mullins Regional Sales Manager - South and London e: m: South East It s encouraging to see that many businesses in the South East region are trying to look beyond the current economic crisis and taking steps to ensure they are strongly placed to exploit new opportunities. They recognise that access to a flexible source of finance from a funder willing and able to support businesses during these tough times and beyond has become a major requirement. Leumi Invoice Finance continues to work closely with the region s dealmaking community, and we re pleased to have been able to support a number of deals to assist successful growth, such as Edenbrook Partners profiled in this issue. We recognise that speedy decision making is crucial, particularly in the current climate, and can provide certainty at an early stage to get businesses moving again. In this way, they are better placed to capitalise on opportunities in their marketplaces, in the knowledge that they now have a stable, known working capital position." Robert Wakeford Sales Manager - South East e: m: North West and Yorkshire The market in the North West may not be as buoyant as we would like and there continues to be a lack of good quality corporate finance deals out there. Many of my introductions over recent months have been for refinance deals where the incumbent lenders are desperately trying to retain the clients by reducing their prices. Leumi Invoice Finance takes a servicedriven approach, taking the time to get to know the business and working closely with them to understand their current and future requirements. In this way we are well placed to offer a competitive and long term solution, based on building a clear understanding right from the beginning of the relationship. In the current economic climate, a strong relationship and real flexibility take on a new level of importance in the minds of many clients. Daniel Harding Sales Manager North West and Yorkshire e: m: Midlands The current market is difficult for all in the finance sector, however I feel the Midlands is showing that it may be one of the first regions to see reasonable growth. Having recently joined Leumi Invoice Finance I m looking forward to meeting with new and existing business introducers across the region and being able to offer a wide range of invoice finance facilities. The track record we have as Leumi Invoice Finance means that we can demonstrate how we ve been able to offer a high degree of funding flexibility to growing businesses; we are competitive and have a real appetite for new business. Andy Norton Regional Sales Manager Midlands e: m: Leumi Invoice Finance Head Office: Pacific House, 126 Dyke Road, Brighton, East Sussex BN1 3TE t: f: London Office: 20 Stratford Place, London W1C 1BG Midlands Office: One Victoria Square, Birmingham B1 1BD Yorkshire Office: 2 Wellington Place, Leeds LS1 4AP Manchester Office: Peter House, Oxford Street, Manchester M1 5AN Thames Valley Office: Davidson House, Forbury Square, Reading RG1 3EU To find out more please visit: Leumi Invoice Finance is a specialist division of Leumi ABL Limited, the asset based lending subsidiary of Bank Leumi (UK) plc. With a great reputation for speedy decision making and a flexible, personal approach we work closely with you, ensuring you are in the best position to grow your business, free from immediate cashflow worries. We seek to work with both new start and established businesses that are well managed with a sound business plan. To read a copy of Leumi ABL s newsletter - VIABILITY visit - where you can download your free copy. Invoice Finance Getting On With Your Business
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