funding your business 35


British Business Bank is also growing and seeking to provide solutions.


We note the reduction in lending stock referred to at the start of this article of £4.3b in the quarter to November 30, 2013, is a composite of an increase in lending by 10% and repayments of lending. This region is also more vibrant in the corporate space than others.


This resonates with feedback we receive in the market from banks that deposit bases are high, from receivables funders that facilities levels are not being fully utilised and perhaps is reflective of prudent strategies.


Our corporate finance partner Wendy Hart comments: "Corporate sentiment is much more positive now and over the next two to three years we anticipate investment in growth both organic and through acquisition will lead to an additional funding need for many businesses. The key for directors is to match the type of funding to its need and a clear strategy.”


Putting yourself in the right position


Firstly, get the basics right


Your Companies House record and management accounts should be up to date and three- year integrated forecasts and monthly cashflow forecasts should all be available and key sensitivities highlighted. The business plan should be clear and the finance function and controls all properly in place.


Bob Alsop, our advisory director specialising in due diligence says “I know that this sounds basic stuff, but you’ll be surprised how many companies don’t get their house in order before speaking to potential funders. In my experience, those companies who have a well-run finance function, and can demonstrate that they have really thought about the risks their business faces, will significantly improve their chances of securing third party funding.”


Secondly, in dealing with funders


• Product structure Ensure you fully understand


How to manage the


risks of LinkedIn More than 11 million people in the UK are LinkedIn users but there is increasing confusion within companies regarding ownership of connections


Employment law expert Katherine Maxwell from leading law firm Moore Blatch says a lack of case law clarifying the legal issue of who owns these connections means this area continues to be a minefield for employers.


“There are a number of areas which cause confusion and these often come to a head when an employee leaves,’’ said Maxwell who is a partner and head of employment with Moore Blatch.


She said there is confusion in a number of areas from whose interests are being served by these accounts and who owns the professional connections.


“LinkedIn is used to promote the individual as much as, if not more than, their employer’s business, and employees are often encouraged


to set up accounts to create new opportunities in the workplace,’’ she added.


“While LinkedIn is a valuable business and marketing tool, employers are becoming increasingly concerned that there is the risk that their


THE BUSINESS MAGAZINE – THAMES VALLEY – FEBRUARY 2014


the products being offered and be clear what you are asking for.


It is also key that you are comparing like with like. For example, with invoice discounting, understand the reserves that will be applied by each funder and the monthly fees.


• Get to credit or funding panels early


You need to understand the appetite of the funder’s credit team from an early stage and due diligence in most cases shouldn’t proceed without a “yes, providing”.


• Be realistic


Forecasts will be tested and significant improvements estimated in sales or costs understood and checked to supporting evidence. Funders will want to confirm you aren’t chasing turnover and to know you have properly considered the working capital implications of your strategy. The funder may also wish to set covenants in relation to forecasts, which if breached in the future could have serious implications.


Also in terms of timing, factor law


employees will use LinkedIn to compete with them after they leave and are increasingly calling upon us to look at implementing guidelines to protect their business.’’


Some cases have gone to court with rulings providing some guidance. In one instance a court rules that employees leaving a business cannot take with them the LinkedIn contacts their employer builds up and manages – this is particularly so when the connections are used in competition.


In another case the High Court stopped a group of employees who set up in competition from using LinkedIn group information – deemed to be confidential.


Maxwell said that despite a few recent cases involving the use of LinkedIn contacts, the confusion will remain until there are more court cases and companies need to be mindful of protecting what can be a valuable business asset.


She recommends that to manage the risks to the business when employees use LinkedIn accounts, employers should:


• Provide guidance on the use of www.businessmag.co.uk


the account, typically in the form of a policy that sets out clear expectations on appropriate content and appropriate groups for the employee to join.


• Require employees to replicate contacts on the employer’s own databases.


• Take steps to set up the employee’s LinkedIn account (for example, by using the company’s email address, photo and text, and generating a password that is surrendered on termination) and maintain the account using the employer’s systems.


• Add a clause into the employment contract assigning to the employer any interest in professional contacts added to an employee’s LinkedIn account during the course of employment.


• Tailor restrictive covenants to deal specifically with LinkedIn issues.


Details: Katherine Maxwell 023-8071-8094 katherine.maxwell@mooreblatch. com www.mooreblatch.com


in that funders will have a process to go through.


• Build a relationship


See this as a partnership with the funder which is also invested in the success of your business. Ideally you should also understand which relationship manager will be responsible for your account.


Finally, take advice


• While as advisers we would say that, we cannot overstate the importance of liaising with funders; considering products, structure and pricing; the due diligence phase; and also in ensuring changes are appropriate for your working capital cycle and will support the future of your business.


Details: Richard Lewis 0118-9839651 richard.lewis@uk.gt.com


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