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Daniel Owen-Parr, Head of Professional Sector & Auction at specialist lender Together, explains when SMEs can benefit from using specialist finance

The use of alternative finance for SMEs has been becoming more mainstream for quite some time now. In fact, the country’s largest banks are now referring clients that they can’t help directly to alternative lenders under the Government’s new bank referral scheme, a scheme which we are a part of and one which is expected to fuel growth in Britain’s SMEs.

At Together, we have 43 years’ experience in providing finance to suit a wide range of needs and often help businesses and entrepreneurs that require funding which may not fit with the more rigid criteria of the mainstream lenders. 

To help you to understand how alternative finance could boost your business plans, here are the five most common reasons businesses use our specialist lending services:

To purchase property

Often we are able to provide finance in situations where mainstream lenders are unable to meet the necessary timescales. When a property purchase requires a quick completion, for example, we can provide fast and flexible funding.

To seize an investment opportunity

Likewise, when businesses are looking to seize an investment opportunity, whether to purchase equipment or stock, expand operations, or to acquire retail or office space, our common sense approach means that we are able to work with businesses of all sizes and across multiple sectors in order to secure the funding they need.

To refinance existing debts

Refinancing can help small businesses by consolidating debts into one, making them easier to manage and enabling them to plan ahead.

Being able to refinance when necessary can also help improve cash flow, whilst paying off creditors and maintaining relationships with key suppliers can be crucial in securing the reputation of the business.

To release equity

Another reason businesses may need to use a specialist lender is to release equity, by allowing the client to raise money against the value of a residential property and providing funds for business use.

Here’s just a couple of ways in which our commercial finance has helped investors.

  • Fast funding saves commercial property deal

We delivered £2.5 million in just 12 days to secure the purchase of a large industrial estate, saving the client from missing out on the right to buy the land.

Key facts:

Loan type: Bridging loan

Amount: £2.5 million

Term: 12 months

Loan to value: 75%

Introducer: Prydis Group

Our client, Exeter Estates, led by Tony Rowe OBE, had taken an option to buy the 46-acre estate many years earlier, but risked missing the deadline due to funding. Only 12 acres had planning permission in place, which posed an issue for mainstream finance providers.

Together’s director of lending, Ritchie Watson, visited the site to assess the case. Exeter Estates is an established business and had an exit strategy planned, with the intention to refinance once full planning permission was obtained. The land was valued at £3.2 million, so adopting its usual common sense approach, Together agreed to provide the £2.5 million needed, with additional security provided. The funds were then delivered in 12 working days.

  • Tony Rowe OBE commented: “This was a great result for all concerned. Our intention, now that the purchase is complete, is to obtain planning permission for commercial uses on the full estate, creating industrial units and offices for businesses in Exeter. Time is of the essence when it comes to securing commercial property deals and the team at Together acted fast, demonstrating their commercial acumen and agility, in order to complete the deal in time.”

  • Jobs secured thanks to funding of new premises

We funded a £550k short-term loan to secure the purchase of a £1.65m industrial estate, safeguarding more than 40 jobs in the process.

Key facts:

Loan type: Bridging loan

Amount: £550,000

Term: 12 months

Loan to value: 33%

Introducer: South West Growth Fund

Our client, Waycon Precast, had to find a new base after the owner of their rented industrial estate gained planning permission to build houses on the site, meaning they had to move premises. The business had already secured a £385,000 grant from the South West Growth Fund but had been unable to find anywhere suitable.

When a 10-acre industrial estate near Honiton, Devon, came on the market, Waycon needed to move fast to secure the prime commercial site ahead of competitors. Our regional development director for the South West, Paul Chadney, visited the site and heard about the established manufacturing company’s plans to expand. We agreed to provide the additional £550,000 needed, ensuring a quick completion and safeguarding 43 jobs.

  • Raymond Gerson, director of Waycon Precast, said: “This move will also save money in transport costs, since we will now be 53 miles closer to the main Exeter M5 hub than we were at the previous location. The company now has a really bright future and, importantly, jobs have been secured.”

Find out if Together Money could help you with your finance needs.  Email Daniel Owen-Parr at Together Money quoting JDP.

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