Finding the right financePosted by Rebecca Bendle
Rebecca Bendle of WWFP with tips on the best financial solutions for small businesses.
Our commercial department were recently challenged by a business to find a finance package for them. They were looking to expand their hotel business and had outgrown the leasehold premises they had occupied for the last five years. They had seen a freehold property for sale nearby that suited their requirements and would allow them to continue to grow over the coming years.
Originally they had approached their high street bank, asking for a commercial mortgage, but because of a lack of acceptable security in the bank's eyes, they had been refused.
This could have been the end of the line for their expansion plans, but our clients were determined to find another solution. The first step they took after their initial setback was to approach us as their financial advisers. Because of that, we'd like to share the story of how we were able to find a way for their business to grow as it's relevant for many businesses out there.
When our clients first approached us, they told us they'd been nervous initially about talking to a financial adviser - not an uncommon statement for us to hear. Talking to an adviser can seem daunting, but we assure you that the advisers at Worldwide are not at all threatening and really quite ordinary!
In all seriousness though, any good independent financial adviser will recognise that taking advice can be a big step for someone to take. When we're contacted by new clients, the first thing we do is listen.
This was the case with our clients who owned the hotel. During the first consultation with them, they told us all about their business, what they wanted to achieve and we established the current position the business was in. That's probably another area that we advisers have an advantage over banks - we're able to take the time to really get to know clients and their businesses.
As soon as we had that vital information, we decided that in this case we could give the bank a second chance. The next step in the process was to request from the hotel owners the information we knew their bank would want to make a re-assessment of the proposition. We then organised the information in the best possible way and presented it to the bank.
A few days later, we had our success story - the bank agreed to arrange a commercial mortgage as part of the solution topped up by access to a government backed scheme - Enterprise Finance Guarantee (EFG) and Asset Finance - which was secured against some of the assets the business already owned.
So what caused the problem originally? The trap the business had fallen into was being unaware that they had the ability to raise more finance within their own business. This has been true for many of our clients, who have been unaware of the potential of the assets they own. Even with the best of intentions, banks can, at times, be a little narrow-minded and so focused on the product that they miss vital aspects of your business.
A good independent financial adviser will be able to take a much broader look at the whole of your business and find solutions that your bank might not have been able to. Think of a good adviser as being a little bit like a detective, tracking down all the assets your business has and the best financial solutions for it.
As well as being a detective, your adviser will also take on the role of negotiator and liaison officer, working with you and all the other professionals involved in the financing of your business.
Maybe most importantly of all though, your financial adviser is there to support you and your business gain the success you deserve.
Your property may be repossessed if you do not keep up repayments on your mortgage or any other loan secured on it.
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