22 finance


Tap the potential of invoice financing


Tracey Bevis, senior new business manager at Pulse Cashflow Finance, looks at alternative sources of funding for cash-strapped corporates in the Solent area


Financiers to the business sector have long been a target for criticism from politicians and the media alike for not supporting SMEs. We have consistently believed in SMEs and their importance in the local and national economy.


There is no doubt that access to finance is one of the greatest challenges facing SMEs today. However, contrary to popular belief, funding is trickling its way through to Hampshire businesses. Yet, it’s not always obvious to owner-managers what sources of alternative funding are available to them. For instance, banks can provide finance through their invoice finance divisions as can numerous independent invoice finance companies.


Some businesses in the Solent area are facing challenging trading conditions and do not have a strong track record of profitability, while others have lenders who are not providing funding commensurate with the level of business being written. When assessing the historic financial performance of a business, we take a more relaxed approach than others.


Hampshire businesses can talk to us about securing crucial funding through our invoice finance and credit and ledger services. We offer a fast turnaround and simple, transparent pricing, with clear monthly financial outgoings. In addition, we can provide high levels of support, as well as outstanding collection credentials that could add significant value to funding and increase the working capital within the business.


Historically, our transactions fall into the £10,000 to £1.5 million bracket, providing customers with ample scope for their day-to-day funding requirements and development plans. Unlike other lenders, we do not restrict funding with a facility


www.businessmag.co.uk


Growth positive but still below pre-recession levels


Business confidence in the South East remains stable according to the latest ICAEW/Grant Thornton UK Business Confidence Monitor (BCM).


cap that requires constant review as the business grows.


We are optimistic about the prospects of the Solent region, always acting quickly to provide businesses with the funding they need to grow.


CASE STUDIES


• Pulse Cashflow Finance completes an invoice financing deal with a Welsh recruitment company serving the rail sector. The £6m turnover business was going through a busy period and required more working capital. The customer was able to transfer to us from another lender to ensure it didn’t miss out on the business opportunity. We verified that it was quality debt and the transaction was completed within 15 days.


• Pulse Cashflow Finance completes an invoice financing deal with a printing company with an annual turnover of £10m. The Essex-based company needed to buy more time for its advisers to draw up a refinancing plan. In this case, the business was able to transfer from another lender and Pulse was able to provide funding on the basis of a quality debtor book. The transaction was completed in seven days.


Details: Tracey Bevis enquiries@pulsecashflow.com www.pulsefs.co.uk


The region now has a Confidence Index Score of +10.6 and stands slightly above the UK average of +8.1. Key financial performance indicators remained stable in the first three quarters of 2011. For Q3 2011, businesses in the South East report an increase of 3.8% in turnover during the past 12 months and a growth of 2.9% in gross profits and sale volumes. Although positive, these indicators remain below their pre-recession levels when annual growth of over 4% was typically recorded.


Capital investment growth has also remained steady with businesses in the region reporting growth of 1.3% and forecasting growth of 1.9% during the next 12 months. Again while this is positive, these rates of expansion still remain below pre-recession levels when annual growth was typically 2.5% - 3%.


In addition, the growth rate reported by South East businesses for investment in research and development also indicates a relatively cautious approach. R&D budgets are reported 2.4% up for the past 12 months with expansion of 1.2% expected for the year ahead. South East businesses report a basic salary growth rate of 1.7%, up from 1.1% over the year to Q3 2010 and total salary growth remains unchanged from the same quarter last year at 0.9%.


Norman Armstrong, partner at Grant Thornton Southampton, commented: “Few expect the UK economy to return to pre- recession levels for some time, so it is to overseas markets that business owners are turning to fuel growth. Uncertainty about the eurozone, which accounts for approximately 40% of UK exports, means markets further afield, such as South America, India, China and South East Asia, present the biggest opportunities.“


VAT loophole closed


A court has ruled that a VAT loophole exploited by retailers such as Amazon and Tesco operating in Guernsey and Jersey will be closed.


The big name companies were taking advantage of Low Value Consignment Relief (LVCR). Seeking to continue LVCR’s application to the sale of goods such as CDs, DVDs and contact lenses, the Channel Islands took the Treasury to judicial review recently and lost.


The Channel Island governments opposed chancellor George Osborne’s decision to target greater funds through the abolition of LVCR, which was announced in


last year’s Budget. From April 1, thousands of items valued under £15 are subject to VAT.


Ruth Corkin, head of VAT services at accountants and business advisers James Cowper, said: “Channel Islands-based companies will have to pay sales tax and their prices are expected to rise. We anticipate local suppliers becoming more attractive to consumers in future, generating a welcome boost in sales for many regional small shops and Internet traders.“


Hundreds of mainland businesses have been forced to close since the late 1990s when sellers first started to take advantage of LVCR.


Formaplex receives £3.5m


Havant-based Formaplex, which supplies the automotive, F1, defence and aerospace sectors, has received £3.5 million working capital facilities through banking partner NatWest to aid business expansion.


The company was founded in 2001 and specialises in injection-mould tooling, composite tooling and the


manufacture of plastic components. It is bucking the trend by winning new contracts to supply tooling and machinery expertise to assist with the manufacture of the new Ministry of Defence Foxhound vehicle and tooling for components for the new Range Rover Evoke and Ford Fusion among others.


THE BUSINESS MAGAZINE – SOLENT & SOUTH CENTRAL – MAY 2012


Page 1  |  Page 2  |  Page 3  |  Page 4  |  Page 5  |  Page 6  |  Page 7  |  Page 8  |  Page 9  |  Page 10  |  Page 11  |  Page 12  |  Page 13  |  Page 14  |  Page 15  |  Page 16  |  Page 17  |  Page 18  |  Page 19  |  Page 20  |  Page 21  |  Page 22  |  Page 23  |  Page 24  |  Page 25  |  Page 26  |  Page 27  |  Page 28  |  Page 29  |  Page 30  |  Page 31  |  Page 32  |  Page 33  |  Page 34  |  Page 35  |  Page 36  |  Page 37  |  Page 38  |  Page 39  |  Page 40  |  Page 41  |  Page 42  |  Page 43  |  Page 44