Sector Focus
Finance
Medium-sized firms must make ‘radical changes’
Open for business: Sam Howard of Magnet Capital
Record month for Magnet Capital
Development finance lender Magnet Capital has recorded its best month ever since launching in 2018, with the level of new business written having increased by a third. The specialist lender, based near
Watford, targets the development finance market below £2m and is backed by the Merry Hill developer the Richardson family, who have equity ownership in the business. Additionally, Magnet Capital has
seen enquiries up by 33 per cent year-on-year, something they attribute to its ‘consistent approach to lending’, that has not changed significantly through the pandemic. Sam Howard, managing director
at Magnet Capital, said: “We have thrived in May by being open for business during this difficult period. “Whereas other lenders
immediately pulled down the shutters, our cautious lending model and years of experience enabled us to make sensible funding decisions, limiting potential exposure but continuing to lend. “We have a mantra in the office
to be the tortoise not the hare and not to bite off more than we can chew. “We understand how much value
our borrower and broker partners place on consistency and reliability and this is what long-term relationships are built on. In these tough times this is certainly bearing fruit.
“We are delighted but not surprised with the recent numbers. Whilst the UK continues to suffer from the Covid-19 outbreak and things may not return to normal for some time, there is a real sense that people want to get on with their lives. “The fatigue of the Brexit years
plus the seismic shock of the pandemic, has taken its toll but SME developers are seeing beyond this and thinking 15 to 18 months into the future. On that journey and beyond, we will continue to be their partner.”
52 CHAMBERLINK August/September 2020
West Midlands’ medium-sized companies predict they will only survive the impact of the Covid-19 crisis by making radical changes to their businesses, according to a survey conducted by accountancy and business advisory firm, BDO. In the first of a bi-monthly survey of 200 medium-sized
businesses – which together represent £3.5bn in revenues and more than 40,000 employees - BDO’s ‘Re-thinking the Economy’ explored the impact of coronavirus on these businesses and their plans for the future. While 79 per cent expect to recover from the impact of
Covid-19, more than half of those (56 per cent) believe their businesses will be fundamentally different as a result. Additionally, 42 per cent of medium-sized businesses
expect revenues to return to pre-Covid levels in less than a year, but the same number believes it will take up to three years for trading to recover, with 42 per cent of businesses say they have stopped exporting and nearly half (47 per cent) have reduced the number of services and products they offer. The survey also found that Government support has
played a key part in business survival, 83 per cent have made use of the Chancellor’s business support measures in some way. Richard Rose, head of BDO in the Midlands, said: “The
way in which medium-sized businesses in the Midlands emerge from the pandemic will play a huge part in the recovery of the region’s economy. “We know that companies have been hit hard and job
losses have been and will be a painful outcome. But it is encouraging to see that medium-sized businesses are confident about their overall prospects and are planning for long-term recovery. “They are making swift changes to their operating
models to give their companies the best chance possible, with some seizing the opportunity to expand into new areas. “There is no denying that this will be a long haul and
improvements will be gradual. Careful management of the transition to life without government support will be critical.
“Medium-sized businesses are saying they are ready to
take decisive action and are hopeful they will come through this, returning their businesses to pre-Covid trading levels.”
Richard Rose: Recovery will be a ‘long haul’
Pub operator secures funding
Mitchells & Butlers has secured £100m of additional funding from HSBC UK and Santander UK as part of the Coronavirus Large Business Interruption Loan Scheme (CLBILS). The funding will support
Mitchells & Butlers through the continued disruption of Covid-19 and help to secure the jobs of more than 45,000 employees. The funding was split equally
between HSBC and Santander, and is one of the first CLBILS deals
since the Government updated the scheme last month to allow loans of up to £200m. As one of the largest operators
of restaurants, pubs and bars in the UK, Mitchells & Butlers saw its 1,700 sites temporarily close at the start of lockdown – including household names such as Harvester, Toby Carvery and All Bar One. This loan ensures the business
can continue operating and reopen its sites.
M&B finance chief Tim Jones
said: “We are grateful for the strong working relationships we have with our banking group enabling us to put together this support funding in uncertain times. “As we come through the challenges posed by the abrupt shutdown of the hospitality sector we now look forward to welcoming back guests into our sites, where safety will clearly be of paramount importance.”
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