Rhiannon Wilkinson on how we’re working with banks
Finance Wales continues to work closely with banks
as well as other intermediaries to provide
commercial funding for businesses with sound growth
plans.
Finance Wales recognises that many businesses are faced with
problems and opportunities as they develop and grow. Rhiannon Wilkinson, Investment Executive explains
some of the ways in which we can work with banks to help them
achieve their lending targets as well preserve client relationships
in these difficult economic times.
Working alongside banks we can help with:
- Client retention
- Client growth
- Risk sharing
Some examples of how we can work with banks:
Asset purchases
We can lend to businesses which need to purchase equipment to
fulfil new orders where the bank’s asset finance provider requires
a larger than expected deposit.
Finance Wales can fund the increased deposit enabling the bank to
generate increased income.
Working capital for growth
We can lend to businesses with increased working capital requirements, for example where
the bank is unable to fund stock purchases. The working
capital must be needed to help the business achieve its future
growth.
Businesses with a lack of trading history
We can lend to businesses that require cash for growth and even
those with limited trading history. In this case we’d take
into account factors such as the strength of the management team,
investment from management and any signed contracts from major
customers, for instance.
Working with the business and its bank, we can help the bank
preserve its relationship.
Property purchases
We can lend to help businesses purchase owner-occupied business
premises where a bank can only provide a loan at a loan-to-value
(LTV) ratio lower than the business requires.
Finance Wales can provide the shortfall,
enabling the deal to go ahead.
Businesses with lack of security
Our lending criteria isn’t driven by available security, therefore
we can consider a cash flow lend or
an equity investment in certain
circumstances. This can allow the bank to share the risk and allow
for client growth.
Succession deals
Businesses may be considering an acquisition or current owners may
be looking to sell through a MBO or
MBI.
Often these transactions will benefit from having Finance Wales as a co-investor with our ability to
provide a cash flow lend or become an equity investor. Again,
allowing the bank to share the risk.