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August 5, 2020

New study on SMEs outlines what they need to succeed post-Covid

Business bank, Allica Bank has combined data and insight from over 1,000 UK SMEs with a multiple regression analysis to determine what factors most closely aligned with an SMEs’ chances of success and separated the highest-performing businesses from their peers. These ‘rules for success’ have been compiled from the research data to support British businesses as they look to chart a course to post-Covid recovery.

The full report identifies six behaviours for small and medium businesses to follow, to maximise their chances of a successful Covid recovery. The six top-line rules emphasised by the data were:

Rule 1: SMEs should regularly train staff
Of the top-performing businesses analysed, 47% provided training for employees at least on a quarterly basis, compared to just 32% of other businesses. Regular employee training was linked closely to success by the model.

Despite this, many small businesses have neglected training and nearly half (46%) of the small businesses analysed only provide training for employees about once a year or less often. This included 15% that never provide employer-funded training. This discrepancy could represent a significant opportunity for small businesses to unlock the potential of their employees and thrive in the post-Covid economy.

Rule 2: SMEs need to focus on innovation and technology
Looking again to the best performing businesses, 76% were found to either continually (39%) or often (37%) be considering new opportunities for technology in their business. This is compared to only 51% for businesses considered to be outside of the top ranks, out of which only 27% admitted to continually looking for new technology opportunities.

Rule 3: Small business must have a formal, long-term vision
Nearly two thirds (66%) of the most successful businesses in the survey had a formal, long-term vision, compared to just 50% of businesses outside the top 100. Looking to the businesses that scored the lowest on the SME Performance index, only 37% claimed to have a formal, long-term vision.

Rule 4: SMEs should broaden their customer reach and find new markets
Of the top-performing businesses, 65% of these have overseas customers compared to just 40% of the worst performing businesses. Among the best performing SMEs, over a third (34%) identified international expansion as one of the top three drivers for their success.

Rule 5: SMEs need to develop reinvestment plans
22% of the best performing SMEs reinvested some of their profits into the business in the past three years with an average 9% of profits being redeployed. Tellingly, this is nearly double what other businesses admit to reinvesting in their business (5%).

Rule 6: SMEs should engage with local business organisations and networks
Of the top 100 SMEs, 30% had obtained external credit to expand over the past three years (compared to 24% of other businesses). Meanwhile, only 16% of all other SMEs had engaged with local enterprise partnerships or growth hubs in the past three years (compared to 23% of the top 100 SMEs).

Chris Weller, chief commercial officer, Allica Bank, said:

“All small businesses are different, as are all small business owners, but one trait they share is an innovative resilience. Whilst the coming months and years will undoubtedly continue to present extreme challenges, there is no doubt that small and medium sized businesses across the UK will rise to meet them head on.

“To give them the best chance to succeed, though, they need to be equipped with the right tools. There is certainly no silver bullet or panacea for every small business, but as this study has found, there are a number of common factors found in the most successful businesses that allow small enterprises to thrive and that they can consider individually for their business.

“This research has identified common ‘rules for success’ that speak to every aspect of running a business, not just the financials. Once we saw these results, we wanted to use them to help small businesses begin to re-build and prosper, by outlining common factors and then examining how best they can be practically applied to businesses in all sectors of the economy.

“Small business owners and their employees have been hit hard by the crisis, but they have the drive and resourcefulness to breathe new life into the economy and bring energy to post-Covid Britain. Our commitment at Allica Bank is to give them the support they need to do so, every step of the way.”

The full report contains a wealth of additional data and insight into each of these topics. As part of its mission to empower small businesses, Allica Bank is making the findings freely available and running a series of free online workshops with relevant partner organisations for businesses to attend.

August 5, 2020

White Oak UK provides £50m in CBILS support to UK SMEs

Independent business lender White Oak UK has today announced it has successfully distributed over £50m of loans to SMEs throughout the Covid-19 crisis, as part of the government’s Coronavirus Business Interruption Loan Scheme (CBILS).

White Oak UK provides business loans, equipment finance and asset-based lending solutions to SMEs and mid-corporate clients across the UK. The company was accredited as a CBILS lender in early May and quickly mobilised to support over 300 business with loans paid out from £75,000 to £750,000, with the ability to lend up to £5m.

With offices in London, Glasgow, Southampton, Manchester and Ewloe in Wales, White Oak UK benefits from national coverage, and its 100+ origination force has approved loans for SMEs and mid-sized corporates around the country with 79% lent to SMEs outside of London.

The company’s cross sector expertise has provided financial support to a wide range of businesses throughout the pandemic, including:

  • £14m to companies in the construction and manufacturing sectors
  • £12m to solicitors and business support services
  • £6m to retailers and wholesalers

At a time when fast capital has been essential to the survival of SMEs, White Oak UK’s hybrid business model has allowed it to access funding from its own balance sheet and external funders to minimise red tape and provide efficient capital. Under CBILS, interest is covered by the government for 12 months, and additionally, White Oak UK customers can benefit from a payment holiday of up to 12 months, enabling them to recover from the crisis without the immediate financial burden of repayments.

White Oak UK is set to continue providing valuable support to SMEs and mid-sized corporates through the crisis, with an additional pipeline in excess of £50m, and ambitions to lend £200m before the scheme closes on 30 September 2020.

Andy Davies, managing director of Leases & Loans at White Oak UK, said: “The financial support provided to SMEs, backed by the British Business Bank, has been critical to the survival of thousands of businesses across the UK. We’re passionate about helping SMEs through the good times and the bad and stand ready to help more companies secure the vital support provided by the government’s CBILs scheme.”

Andre A. Hakkak, chief executive officer and founder of White Oak Global Advisors, LLC:

We are proud to have quickly mobilised over £50m in financial support to SMEs who are the economic engine of the British economy. For over three decades, White Oak UK has worked with dynamic businesses to provide them with the strongest platform for growth. Now, with the unprecedented challenge created by pandemic, we have redoubled our commitment to helping more businesses make, build and grow their way back to prosperity.

August 5, 2020

YUDU doubles down on growth with £400k funding from Rosebud and CBILS

YUDU, a software company specialising in digital publishing and crisis communications, has secured a £300k loan from Rosebud, a fund managed by GC Business Finance, to accelerate the growth of its flagship product, Sentinel.

Sentinel is a crisis management platform that improves operational resilience by enabling mass notification alerts, document sharing, communications via chat channels and instant conference calls.

YUDU has already used the loan from Rosebud to expand Sentinel’s Lancashire-based development team and recruit marketing experts to promote the product more effectively. The funding has also helped YUDU to launch Sentinel Check-in, a new track and trace solution for pubs.

To compensate for a shortfall in sales due to the Covid-19 pandemic and ensure that the Rosebud loan is ringfenced to support Sentinel’s growth, GC Business Finance has also delivered a £100k loan to YUDU under the Coronavirus Business Interruption Loan Scheme (CBILS).

Rosebud provides business finance to growing businesses in Lancashire County Council’s administration area, backed by Lancashire County Developments Limited. Managed by GC Business Finance, it provides loans of £10,000 to £300,000 to businesses in a number of high-growth sectors.

As an accredited provider of CBILS, GC Business Finance also supports businesses in the North West with term loans of £50,001 up to £250,000 under the scheme.

Richard Stephenson, CEO at YUDU, said: “After launching Sentinel, we quickly recognised that we needed financial support to build on its early success. We sought a partner that recognised our position in the market, offered suitable rates and could support us through the coronavirus pandemic.

“GC Business Finance took the time to understand our strategy and make appropriate recommendations, enabling us to focus on growing the business. The finance from Rosebud has already helped us to launch a new track and trace solution for pubs, while the CBILS loan has ensured that we can remain agile and respond to market conditions under Covid-19.

“YUDU is a global company but we are incredibly proud of our Lancashire heritage, so we love that we can work with Rosebud as a local financial provider.”

Matt Robinson, fund manager at Rosebud, said: “As a leading software company with a fast-growing product, YUDU was the perfect fit for a Rosebud loan. The fund was established to support growth, create jobs and enable Lancashire businesses to reach their full potential, so we are delighted to be supporting YUDU as they grow and develop their Sentinel product. The funds, together with the CBILS loan provided by GC Business Finance, have supported YUDU to maintain growth momentum, and will deliver a significant boost to Lancashire’s local economy at a time of market uncertainty due to Covid-19.”

County councillor Michael Green, cabinet member for Economic Development, Environment and Planning, Lancashire County Council, said: “The Rosebud Fund is designed to support Lancashire’s businesses and enable growth, so we’re delighted to be able to support YUDU. The finance provided by Rosebud, alongside the support provided by the Coronavirus Business Interruption Loan Scheme, means that YUDU can continue with their growth plans whilst withstanding the challenges that the Covid-19 pandemic has brought to many businesses across Lancashire. Supporting economic growth and promoting resilience are core purposes of the fund, so it’s encouraging to see that businesses like YUDU are continuing to thrive in the face of change.”

August 4, 2020

Covid-19 forces 1 in 3 small businesses to shut down

Nearly a quarter of small retailers and hospitality firms don’t know when they’ll open their doors again after being forced to shut down because of the coronavirus pandemic and lockdown, according to new research carried out among the UK’s once thriving small business sector.

Nationally, a total of 35% of all SMEs said they had been forced to shut down during the Covid-19 crisis. While 18% said they were planning to reopen, 17% admitted they were unsure when they would be able to get back to work. The figure was fairly consistent across most industry sectors, but the retail and hospitality sectors were worst hit, with 24% saying they didn’t know when they would be up and running again.

The UK’s small businesses have been badly hit by the impact of Covid-19 in terms of both income and working practices, which could take years to recover from, according to the first Small Business Monitor from WorkLife, the new employee benefits service from online money manager OpenMoney.

Almost three quarters (73%) of firms saw their income reduce during the pandemic, with 46% reporting that it had fallen by up to 50%. Perhaps more worrying is the fact that 62% of SMEs expect their income to remain subdued over the next 12 months, with 42% saying it will be reduced by up to 50%. A small but significant 5% of firms don’t expect to recover any income at all over the coming year, putting their futures in doubt.

With Britain’s small business sector employing more than 16.5 million people, this will also have a devastating effect on the country’s workforce, many of whom are already struggling financially themselves. Almost three million cash-strapped people have been given payment holidays on their mortgages and credit cards.

Rob Marshall, managing director of WorkLife, believes that companies and employees need help to get back on their feet. He says: “We’ve all seen our high streets devastated during lockdown with shuttered shops, pubs and restaurants. The likelihood is that many won’t reopen.

“But for those that can reopen, as our Small Business Monitor shows, the worst is far from over. Income has reduced, while the changes needed to operate under social distancing rules are likely to push up their costs even further. This is a massive strain on everybody working there.”

August 4, 2020

60% sales boom for food manufacturer during Covid-19

A food manufacturer and wholesaler in Shrewsbury has been able to expand its services and safeguard the future of the business with the help of a six-figure Coronavirus Business Interruption Scheme (CLBILS) package from Lloyds Bank.

Oriental Food Express, which supplies Asian food ingredients to restaurants and oriental supermarkets including Wing Yip, saw a significant increase in demand for its products immediately following the coronavirus outbreak as people spent lockdown honing their cooking skills and experimenting with new dishes. Its sales doubled in March compared with the same period last year, and were up by 60% in April.

The loan helped the business to ramp up production of its popular Chinese dumplings and Xiao Long Bao Buns, while investing in development of new flavours and varieties to expand its range. As production increased, it was able to continue paying all staff wages, meaning that none of the forty staff at its Shrewsbury production site were placed on furlough or lost their jobs.

The funding has also been crucial in offsetting income lost from a drop in export sales, which normally account for around 40% of Oriental Food Express’s sales and which have been significantly affected by the pandemic. The business is anticipating a longer-term dip in demand from international students who usually make up a big proportion of their target audience and may no longer be attending courses in the UK for the coming academic year.

Daniel Wang, general manager at Oriental Food Express, said: “We saw a huge spike in demand during the lockdown period, which presented a big opportunity for our business, but also meant we faced a number of operational challenges.

“The finance package provided by Lloyds Bank provided us with the cashflow we needed to react quickly to make the most of this demand. It will also help to provide us with extra support as we move forward and demand continues to fluctuate.”

Numan Rezaul, relationship manager at Lloyds Bank Commercial Banking, said: “Oriental Food Express is a fantastic example of a business that was able to quickly adapt to the changing landscape after the coronavirus outbreak, and reap the benefits as a result.

“We’re pleased that we have been able to support them during this time and will remain by their side as they face new challenges in the months ahead.”

August 4, 2020

Thousands of businesses that survive a Covid winter will die of debt

The UK200Group, the UK’s leading professional services group of independent chartered accountancy and law firms, is calling for government action now to put in place measures for the handling of billions of pounds worth of business borrowing as a result of Covid 19 which will be payable in the Spring of 2021.

The specific issue is how debts that have been deferred in 2020 are going to be treated by the government and their agencies. Without clarity many businesses will take preventative measures now in order to minimise the risk of being unable to pay the likes of deferred Income Tax, VAT and their Bounce-back loans. The most likely impact will be higher redundancies than might be necessary.

Specifically, many businesses and their proprietors are facing payments next Spring of:

Income tax deferred from July 2020, now due on 31 January 2021

VAT deferred from June 2020, now due by March 2021

Bounce-back loans and CBILS have 12-month repayment holidays, and so payment will start in spring 2021.

The UK200Group is recommending the government consider a number of options including: the provision of a single consolidated business support loan owed to HMRC. Additionally to establish a procedure for loans repayments based on a criterion such as: average profits of the business for the last 3 years, the size of business and the size of loan.

Says Andrew Jackson, head of corporate tax, Fiander Tovell and chair of the Tax Panel of the UK200Group;

“Business is largely supportive of government initiatives so far. But it is looking increasingly likely that an upturn is further away than hoped for and as a result those businesses that have needed to defer their VAT or take advantage of a bounce -back loan are unlikely to have the cash available in as little as six months to make payments.

“We are not proposing writing off debts, but we are calling for ways for businesses to manage their finances over a longer period, so that they don’t have to take preventative measures now which may be unnecessary, but most likely mean more redundancies”.

August 4, 2020

Cynergy Bank receives increased lending allocation for CBILS

Cynergy Bank is pleased to announce that its lending allocation under the Coronavirus Business Interruption Loan Scheme (CBILS) has increased. This increase, in addition to the original allocation in April 2020, means the Bank will be able to continue to offer government backed guaranteed loans to both new and existing business customers.

CBILS, delivered through British Business Bank accredited lenders, is designed to support the continued provision of finance to UK smaller businesses (SMEs) during the Covid-19 outbreak. The scheme enables lenders to provide facilities of up to £5m to smaller businesses across the UK who are experiencing lost or deferred revenues, leading to disruptions to their cashflow.

Following the announcement in April 2020 that Cynergy Bank had become accredited under the scheme, the Bank extended its offering to new customers in June. The Bank has already received applications for CBILS lending that will result in over £100m in CBILS lending.

The Bank will now be able to provide extra financial support to its target market – ambitious small and medium sized businesses that want to scaleup across the UK.

This scheme is designed to support UK based small and medium-sized businesses, with a turnover of up to £45m, who have a viable business proposition but are facing challenges as a result of the Covid-19 outbreak.

Commenting on the CBILS funding, Nick Fahy, CEO of Cynergy Bank said:

“As long-time advocates of ambitious businesses that have the capability and desire to scaleup, we want to be able to support them through the good times and the bad. Scaleup business will drive the economic recovery post Covid-19 and they often don’t get the service they need from the retail divisions of the big banks but want more than an app-based approach from the neo-banks.”

“We are already actively working through loans of over £100m through swift implementation of our CBILS scheme, and we are delighted to have the additional government backed lending guarantee so we can assist more viable scaleup businesses who are struggling because of the current economic downturn.

“We stand ready to support customers across the UK and we expect the loans we advance to be in the range of £1m to £5m. We put relationships at the heart of all that we do and with our new funding for CBILS lending we can continue to be there for those that need extra support during these challenging times.”CBILS

August 4, 2020

Innovation in technology, transport and housing in £66m package

Eight ‘shovel ready’ projects, ranging from the National Brownfield Land Institute to Very Light Rail developments are to benefit from £66m of government funding secured for the region.

The money from the government’s Getting Building Fund is aimed at projects which can be started quickly and completed within 18 months. This creates jobs and drives investment to aid the economic recovery following the coronavirus lockdown.

The West Midlands Combined Authority (WMCA) working with the Greater Birmingham and Solihull LEP, the Black Country LEP and the Coventry and Warwickshire LEP delivered the region’s prioritised list of projects to the Ministry of Housing, Communities and Local Government (MHCLG), which has been confirmed today.

The National Brownfield Land Institute in Wolverhampton is one of the eight shovel ready projects to benefit from the £66m funding package. (L-R): Professor Geoff Layer, Vice-Chancellor at the University of Wolverhampton, Tom Westley, Chair of the Black Country LEP Board, Cllr Ian Brookfield, City of Wolverhampton Council Leader, Jane Stevenson MP, and Andy Street, Mayor of the West Midlands and Chair of the WMCA

Combined, the projects will create about 2,110 jobs, as well as support 1,419 construction jobs during development.

The projects are:

  • £15.1m towards the redevelopment of University Station in Edgbaston
  • £1m towards WM5G’s work with small and medium sized business to develop ground breaking apps
  • £10.8m to provide innovation spaces and research laboratories at the Birmingham Health Innovation Campus
  • £12.4m for the Very Light Rail Innovation Centre in Dudley where new modes of transport which are both green and cheaper and quicker to deliver than traditional tram or rail are being developed.
  • The National Brownfield Land Institute, at the University of Wolverhampton will receive £14.9m. It will research and develop new construction methods and ways of regenerating contaminated land
  • £6m towards Coventry City of Culture to support various initiatives to make the most of the opportunities presented by 2021 – including the creation of a new heritage park
  • Coventry’s Very Light Rail project to receive £1.8m
  • £3.9m towards improved facilities at the Ricoh Arena, Coventry as part of the Commonwealth Games legacy scheme

Andy Street, the mayor of the West Midlands, said: “At a difficult time for the West Midlands’ economy brought on by the coronavirus pandemic, it is great to see the Government putting further cash on the table to help aid our recovery.

“This £66m from the Getting Building Fund will go towards exciting, shovel-ready, projects across the region that will make an immediate difference by helping to create and secure local jobs for local people.

“As well as an immediate investment to re-boot our local economy, the money secured through the fund is also an investment in our future, to secure the West Midlands’ place as a global leader in green and clean technology, life sciences, transport of the future, and construction.

“This announcement is just one part of our much bigger plans to reset, recharge and rebuild the West Midlands economy by investing in the future and retaining current jobs and creating new ones.”

Cllr Ian Brookfield, WMCA portfolio holder for the economy and leader of the City of Wolverhampton Council said: “In our recovery blueprint we have set out clear priorities to get the West Midlands back to work and the economy back on track.

“These eight projects are ones which, with this extra money, we can get started on straight away to create thousands of jobs and generate further investment.

“We are also looking to the future through these projects, such as the National Brownfield Institute in Wolverhampton, which will develop innovative methods and approaches to unlocking brownfield land and help us meet the demand to build more houses.

“It will be part of a nationally and internationally significant centre of excellence for built environment technologies and will help the city and the region develop a global reputation in this field.”

Tim Pile, who chairs both the West Midlands Strategic Economic Development Board and the Greater Birmingham and Solihull Local Enterprise Partnership (LEP), said: “The projects highlight the real breadth of opportunity to accelerate recovery here in the West Midlands; not only aiding a swift bounce back with an injection of new skilled jobs, but supporting our businesses to lead the way in major new markets that will be drivers of sustainable economic growth in the future.

“Delivery of these projects will play a key role in achieving a wider vision for the region to build on its unique heritage to become a world leader in innovation and creativity. The LEPs will continue to work closely with the WMCA to bring forward investments and see the full potential of the West Midlands realised.”

August 4, 2020

NatWest brings Apple Pay to business credit cards

NatWest today brings Apple Pay to its business credit card customers, providing a safer, more secure and private way to pay that helps customers avoid handing their payment card to someone else, touching physical buttons or exchanging cash — and uses the power of iPhone to protect every transaction.

NatWest and its subsidiaries including Royal Bank of Scotland and Ulster Bank have integrated Apple Pay across a range of Mastercard credit and charge cards for its business and commercial banking customer base, complementing the existing range of payment options for SMEs.

Customers simply hold their iPhone or Apple Watch near a payment terminal to make a contactless payment. Every Apple Pay purchase is secure because it is authenticated with Face ID, Touch ID, or device passcode, as well as a one-time unique dynamic security code. Apple Pay is accepted in grocery stores, pharmacies, taxis, restaurants, coffee shops, retail stores, and many more places.

Matt Tuck, head of customer propositions & delivery, commercial Banking, NatWest Group:

“After providing the service to our business debit cards last year we are delighted to extend Apple Pay to our credit and charge cards for our SME business and commercial customers. We are proud also to be the first of the big 6 banks to offer this to our customers. Apple Pay allows customers to make safe, fast payments with minimal effort. This innovation supports our broader efforts to assist customers during this time with flexible, safe and easy options, and ultimately helps them to continue running their business.”

Debbie Suttle, head of commercial issuing, Mastercard UK & Ireland:

“We are thrilled to have worked with NatWest to be the first of the main high street banks to roll out digital wallets to its commercial credit cardholders. We have seen an acceleration in the use of digital wallets for retail customers, so it is only natural for this to now extend to business. This innovation will offer NatWest business customers further speed and convenience when making payments, all underpinned by the safety and security you would expect from Mastercard.”

Customers can also use Apple Pay on iPhone, iPad, and Mac to make faster and more convenient purchases in apps or on the web in Safari without having to create accounts or repeatedly type in shipping and billing information. Apple Pay makes it easier to pay for food and grocery deliveries, online shopping, transportation, and parking, among other things. Apple Pay can also be used to make payments in apps on Apple Watch.

Security and privacy are at the core of Apple Pay. When customers use a credit or debit card with Apple Pay, the actual card numbers are not stored on the device, nor on Apple servers. Instead, a unique Device Account Number is assigned, encrypted, and securely stored in the Secure Element, an industry-standard, certified chip designed to store the payment information safely on the device.

Apple Pay is easy to set up. On iPhone, simply open the Wallet app, tap +, and follow the steps to add eligible NatWest Group credit or debit cards. Once a customer adds a card to iPhone, Apple Watch, iPad, and Mac, they can start using Apple Pay on that device right away. Customers will continue to receive all of the rewards and benefits offered by NatWest Group cards.

For more information on Apple Pay, visit: https://www.apple.com/uk/apple-pay/

August 4, 2020

Aldermore appoints new head of sales support for asset finance

Aldermore bank has appointed Rania Pugh as its new head of sales support for asset finance.

Rania has over 20 years’ experience in the asset finance sector, most recently working at Hitachi Capital, the finance solutions provider, as a project model office manager. She has previously spent over six years at Aldermore, including as head of business support and as a sales support manager for asset finance.

In her new role, Rania will help strengthen Aldermore’s asset finance offering and relationship with the broker community.

Lee Rhodes, commercial director for asset finance at Aldermore, said: “I am delighted to have the opportunity to work with Rania again. Rania’s experience and understanding of the asset finance industry will once again be invaluable to Aldermore. Rania is passionate about our brokers and people. I am excited to see Rania and her team develop and enhance our broker experience.”

Rania Pugh, head of sales support at Aldermore, said: “Having worked with Aldermore in the past for over six years, I’m very excited to be starting my new role. Working closely with my team, we will look for more ways to add value and provide exceptional service to our broker community.”

Rania is an active member of the Leasing Foundation and holds an MBA from the University of Surrey.

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