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How Finance Directors Can Release Value In A Business

Post written by Justin Grace

In this nail-biting time, it is vital to have the services of a Finance Director (FD) who can help your company to repair your credit rating and to obtain whatever funding you need to keep afloat.

The best FDs have access to a wide network of trusted experts who can provide any company owner or CEO with the help and information they need to access that life-saving financing and recover its credit rating.

Take, for instance, Justin Grace of Finance Director Executive Solutions, who provides not only virtual FD services to his clients but also referrals to his growing network of financial service professionals.

That’s network members like James Piper, Founder and Managing Director of Lightbulb Credit and Commercial Finance Broker Kyle Robertson from Evengate Financial Services.

Boosting company credit rating

Lightbulb Credit is the first whole market corporate credit repair business in the UK. In just under three years, it has helped more than 300 UK companies to improve their credit rating with such major credit rating agencies as Experian, Equifax, Graydon UK, Dun & Bradstreet and CreditSafe.

It helped Lightbulb Credit’s clients in a number of important ways, says James Piper.

That’s because business credit ratings have a direct impact on a company’s working capital, its credit limits with suppliers, funding rates and the opportunities to tender for contracts.

“There are three main prongs to the solutions we provide. The first being that companies can trade on credit terms again.

“Sometimes, businesses come to us when they’ve lost their trade credit. They’ve gone from having 30 or 60 days’ worth of credit terms to having to pay their suppliers on the day of delivery. If we can then move them back to 30- or 60-day terms, there is a one-time cash benefit to that business.

The second prong is improving the company’s ability to get funding.

“So we help smaller businesses when they’re applying for funding with either a bank or some of the lower parts of the funding market,” he says. A low credit rating can mean the application is declined.

Lightbulb Credit also helps its larger clients to improve their eligibility for tendering contracts.

“A lot of councils and blue chips who award one, two or three-year contracts, use financial due diligence involving credit rating as part of their tendering process.”

When your credit rating improves, it unlocks the potential of what your company can achieve, he says.

Thanks to the relationships Piper has developed with the main credit rating agencies over the past 15 years, he and his team can show why a company is deserving of a higher credit rating.

“We take companies out of the automated scoring algorithms and methodologies, and we paint some colour around what the business does, and also we are able to share up to date-sensitive data without this becoming publicly viewable.”

“We explain to the analysts at the credit agencies the positives of the business rather than the negatives.”

During the last recession, Piper became aware of what a difference a positive versus negative credit rating could have on a company’s operations. At the time, he was a qualified Corporate Treasurer at Barratt Developments.

“The recession and the financial crash caused credit rating agencies to terminate our recommended credit. We had zero credit. So I had to work with the credit agencies and explain the situation to them. This was the start of Lightbulb in my mind.”

While working for two private equity firms a few years later, Piper again worked closely with the leading credit agencies.

Through those experiences, he recognised there was a need for a company that could help SMEs to PLC’s to improve their credit ratings.

Their clients have turnovers ranging from £500,000 to £2.1 billion.

The impact of the COVID-19 pandemic has meant Piper and his Lightbulb Credit colleagues are more in demand than ever before.

“What we see at the moment with the COVID backdrop is that companies are facing reducing credit limits because of wider macroeconomic concerns and the certain sectors have been really impacted by the pandemic.”

Fortunately, Piper and his team can help companies to improve their flagging credit ratings within days.

“Between two and five days is the average. I’ve had some same-day results too.”

Getting Funding

Raising finance can be difficult at the best of times, but the coronavirus has made it that much more challenging, especially for businesses in the hospitality and retail sector.

It is knowing who to approach and how that can make the difference between getting the right finance with the most advantageous terms and being declined.

That’s where a Commercial Financial Broker like Kyle Robertson of Evangate Financial Services can help.

He does concede that the situation is difficult given the lending market has shrunk since the start of the pandemic. Usually, he deals with about 150 bank and non-bank lending institutions.

“They’ve shut up shop, and a lot of them have pulled out of the market,” Robertson reports.

“I’ve just had an inquiry for the refinance for £500,000 for a business with bowling lanes and child soft play areas. It’s quite a challenge. No one really wants to look at that type of business at the moment because there is no real idea when they’ll come back. Sectors like those are having a bit of a challenge at the minute.”

As a consequence of the current pandemic and its impact on lending, he’s focusing more on raising asset finance for his clients. Robertson specialises in land-based industries like construction, transport, agriculture and forestry.

“If you have a transportation company that was shut for a few months but is back up to a pre-Covid level, I might find it difficult to get CBLIS loan for you. If you own say three lorries valued at £50,000 apiece, I could help you to release up to 80% of the equity tied up in these assets.

“That would give you £120,000 capital to be repaid over five years.”

The good news is that while funders are taking longer than usual to consider other types of funding proposals, getting approval for equity release from financial assets can be obtained within 48 hours, he says.

What’s more, the money is often released to clients within seven days.

“When a client comes to me and says they need a loan, I say, ‘That’s great but tell me what assets you’ve got. Where is the potential to release some equity?’”

He has just helped one client who owns a Welsh garden centre restructure its existing financial agreements.

“The business has obviously been impacted by coronavirus. The owner wants to get back up and running by restructuring its existing finance. With my help, they’ve refinanced the property for £300,000 over 20 years. It makes the payments more manageable.

“It also means if the business has to furlough the owner doesn’t have to make huge payments to the bank because we’ve stretched the payments from five years to 20.”

Invoice finance is also proving to be a life-saver for companies in the current climate, says Robertson.

“Let’s say you are a stationery company, and you invoice £10,000 for ‘X’ amount of products, we can use invoice finance for that. We can release up to 90% of that invoice value within 24 hours.

“If your turnover grows in the current period or has been growing, but you’ve been limited to whatever overdraft the bank deemed fit, an invoice finance facility is fantastic. The Invoice Finance provider isn’t going to come back to say it wants security over your house.”

One of the most critical services Robertson and his colleagues offer to clients is advice on which lending tier to approach based on the company’s current finances and credit rating. Without such advice and guidance, it would be all too easy to sign up for a financial product that proves to be more expensive than necessary or to have the application declined.

“My job is to go away, do all the work, come back and then provide people with a couple of solutions, so they’re making an informed choice as to which solution they want.”



FREE Credit Overview of Your Company

If you want a free, comprehensive credit overview from Lightbulb Credit that will give you valuable insight into how the top five credit agencies view your company, click here now.

FREE Advice

To find out more from Evangate Financial Services about how you can access funding for your company, click here now.

About Justin Grace

Justin Grace is the Managing Director of FD Executive Solutions, a business that supplies expert Part-Time Finance Directors who have spent their corporate careers working in variety of sectors and organisations, bringing a wealth of skills and experience to make a difference to their clients. He can be contacted at

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