Pitch Perfect - Jo Haigh

Positioning yourself with your prospective funders has always been important but never more so than now. Banks are, by and large, looking for reasons not to lend rather than in the good old days (possibly never to return) when you knew who to approach and you could line up several options.

Only a select number of banks are actually looking for new business and, where others are lending it, it’s tending only to be to their existing customer base. Don't assume that an existing relationship will automatically make the pitch any easier or convertible, the words “caution” and “to the wind” will never feature in the same sentence uttered by a bank manager ever again. 

In order to gain access to any new debt funding there are some “must haves” and some “desirables” as in any mutually advantageous position. Whether it is a marriage, new recruitment or, in this case, a funding agreement the more ‘desirable’ boxes ticked the better the chance of success appears to be.

In terms of essentials I think clarity of the proposition itself, utilization of the funds and most importantly security for the lender are key.

In the proposal lay out exactly what you can offer, don't ‘blue sky’ it too much and, in terms of security, be prepared to give a personal guarantee if essential. The question always asked by the funder in this area is if you won’t guarantee the scheme why should they have confidence in your proposal.

Funders that are lending are overwhelmed with enquiries and credit commitments so super cautious deal time is more prolonged than ever. In terms of the journey, give yourself plenty of time to get to the finish line, expect a minimum of 8 weeks for any decision, it could be much more.

Chase up the lenders without becoming a pain but keeping a bit of pressure on won’t harm you.

Consider alternatives simultaneously when making your propositions. One horse races are always risky, this could be alternative funds (if there are any) but more likely alternative types of funds e.g. releasing cash from assets by sale and lease back, personal loans or equity if the deal warrants it.

There will always be funding for the right business, the problem now more than ever is finding that funding and securing it before anyone else in what is clearly a shrinking market.   

Jo Haigh
Head of Corporate Finance for MGR

www.mgr.co.uk
Jo.haigh@mgr.co.uk
0114 223 8621 / 0207 644 9674