Pressure and frustration? There’s an alternative

By Damon Walford, chief development officer

Damon Walford, chief development officer at ThinCats, examines how the one-size-fits-all approach from high-street lenders can clash with SME business culture.

For businesses of every size and shape, the right type of investment at the right time is critical to facilitate growth, promote development and achieve targeted ambitions. Traditionally, bank loans offered the main option for accessing finance, but more and more businesses have become frustrated by their cumbersome systems, restrictive criteria and unresponsive methods; the alternative finance sector came into being to offer a different way forward.

Some alternative finance providers have focused on specific industry types, particularly property and construction, or regions, while others have differentiated themselves based on size or types of loan. ThinCats, conversely, provides funding for SMEs throughout the whole of the UK and across a huge variety of industries, facilitating a diverse array of growth and development objectives.

A very good illustration of this breadth is given by W. Bruford, a chain of retail jewellery shops, operating on the south coast, which needed funding. It is a particularly well-established business with a 131-year trading history. Such longevity is impressive, and while it’s certainly not a precondition for qualifying for funding, the passion and commitment behind the business was obvious.

W. Bruford set up his first shop in Eastbourne in 1886, at a time when Robert Louis Stevenson had just published Dr Jekyll & Mr Hyde, Karl Benz’s first ‘Patent Motorwagen’ rolled out of his workshop, and Geronimo surrendered to the US army after years of heroic resistance.

Business owner Ashley Pugh joined as general manager in 2001 and then led an MBO in 2003. He expanded the business to two shops in 2009 and added the third unit, a Pandora franchised store, in 2014. Since Ashley joined the company, he has increased the turnover five-fold.

“We were looking to refinance because of pressure from our existing lender, a mainstream bank,” he explained. “We had been with them for 17 years, had never breached a covenant, but obviously their lending criteria had changed. They no longer seemed to want our business.”

In August, the company applied for funding from ThinCats, to refinance three existing loans.

Ashley described the process: “It was quite a bit of effort getting the deal over the line, but ThinCats’ people were good: they meant what they said, and our solicitors were very happy with the paperwork – there was no ambiguity. It was more straightforward than dealing with a high-street bank.”

This is just one of many businesses that have approached ThinCats with a story of frustration and dissatisfaction with their mainstream lender. Alternative finance is beginning to plug the gap, offering a way to fund business projects that many traditional finance providers haven’t got the skills or the knowledge to consider, and providing a vital stream of finance for the businesses that are keeping Britain’s economy alive.