Happy New Year from all the team at Navigate Commercial Finance. It probably feels like a distant memory now with the exciting starts you’ve had to 2023!!
We look back with fondness on 2022 after a successful year at Navigate Commercial Finance. Highlights include an office move to Boutique in Colmore Row, Birmingham, the recruitment of Adam Cooksley to expand our sales reach, total funding enquiries smashing through £150m, and achieving an impressive conversion rate of one completion in every four new opportunities received. Our progress supports and reaffirms what we set out to do when we launched in 2021, for Navigate to become your trusted outsourced commercial finance team.
Without so much as pausing for breath, 2023 has started as 2022 finished, fast and busy, with 70% of new enquiries seeking finance for growth or investment opportunities. This is despite the backdrop of economic challenges from declining GDP, high inflation and increasing interest rates. There is no doubt 2023 is set to be a roller coaster year, but let’s not forget there are still pockets of confidence out there and plenty of opportunity, so share the success stories please, we’ll do our bit!
As always, thank you for your continued support and all the very best for 2023. We look forward to updating you again with what we are seeing and how we have supported businesses in our summer newsletter.
Paul Varley
Managing Director
Economic Update
Whilst there’s recently been some more positive noises in relation to a gradual improvement in business confidence, with stubbornly high inflation and increasing wage pressures, combined with flatlining GDP, many businesses have continued to feel the squeeze as we move into 2023. Energy inflation in particular is expected to subside over the coming months, however, at Navigate we have noticed an increase in the number of businesses requiring working capital assistance to get through this intervening period.
Whilst the Recovery Loan Scheme (RLS) 3.0 hasn’t been adopted at the pace of previous government assistance programmes, there are still several lesser utilised alternative funding solutions available to support good, underlying businesses during this time including Invoice Finance, Cash Flow Loans, Asset Finance and Revolving Credit Facilities.
If business owners can see cash pressure on the horizon, it’s important that they explore options early to ensure that as many solutions as possible are available to them. Therefore, if you or your client need assistance in this area, do not hesitate in contacting one of the Navigate team who have a wide breadth of experience in assisting businesses during challenging times.
Even if companies are unable to successfully navigate through this tricky period, all is not lost, as there are a variety of funding solutions available to support acquisitions through restructuring and insolvency processes. Over the past couple of months, Navigate has been involved in securing the funding of three purchases out of administration, so are well aware of both the funding options available and the speed required to deliver these type of restructuring solutions.
Funding for Distressed
Although the majority of funding we secure for clients is to support growth opportunities, given the current climate, it is only natural that we are seeing a number of turnaround, distressed and restructuring opportunities, so we thought we would share some hints and tips on the subject.
First and foremost, management need to have a clear vision for how the business is going to ‘turnaround’, supported by robust and sensitised forecasts. From there, consider the lending required and how you can play to your strengths. Is a cashflow provider, who are technically unsecured, going to lend to a business with a history of losses despite a sensible turnaround plan and forecasts? Unfortunately, highly unlikely, however, if that same business has assets (think receivables, plant and machinery, purchase orders, property) there are specialist asset-based lenders who can better secure their position allowing them to consider these scenarios and provide solutions from Invoice Finance to Asset Finance, to funding purchase orders and Revolving Credit Facilities.
We recently secured funding to support a retail business, who had to restructure via a prepack administration due to the impacts of COVID and escalating energy costs. With a robust set of forecasts, and using off balance sheet assets as collateral, we secured a Revolving Credit Facility which supported the day one consideration and ongoing capital requirements.
In Focus
Spillard Safety Systems Ltd are a West Midlands based, forward thinking supplier of specialist safety equipment that can now kick on to support two exciting new contracts that will improve safety and reduce the risk of incidents on site for their clients.
To fulfil these contracts, Spillard needed to increase stock levels from Chinese suppliers who operate with payment terms of 30% on order and 70% on shipment.
Working with the director, Navigate Commercial Finance, in conjunction with Alex Ford from James Evans Financial Services, identified that an Asset Finance facility, together with a Cash Flow Loan, would be the most appropriate blend of finance to generate the additional funding required to fulfil these contracts. Both solutions were secured within the three-week timeframe.
Craig Spillard, Director at Spillard Safety Systems Ltd, said:
“Paul took the time to understand our business and funding requirements then mapped out solutions that were the best fit for our growth plans. It is clear from working with Paul and his team that they’re experienced in their field. They were a pleasure to work with and I’d have no hesitation in using Navigate should we require business funding in the future.”
Navigate Commercial Finance are delighted to have supported Spillard and wish Craig and his team every success with the new contracts and look forward to working together again in the future.
Adam Cooksley Update
I’m amazed at how quickly the last four months have gone by since joining Navigate. It feels like a lifetime ago when the Bank of England base rate was at a lowly 2.25%…we’re now hearing rumours of it being 4.5% by March!
It’s been an interesting journey with a steep learning curve, but I’ve enjoyed every minute. Especially getting to learn about different lenders and solutions, and how they help SMEs through tough periods as well as more prosperous times of growth. I can honestly say I’ve never felt happier in my career, and this is down to my clients, introducers, lenders, and of course the team at Navigate, so thank you all!
In December I achieved a milestone that I’ll never forget – completing my first deal! I’m glad to say there are many more exciting opportunities in the pipeline and with a vast majority of these relating to growth, I’m excited to see what 2023 has in store!
Contact Us
Should you wish to talk through the contents of this newsletter, or should you have a client that wants to understand what funding solutions are available to them, please contact Paul Varley on 07421 145 704 or by email at letstalk@navigatecf.com.