• Assets for growth


    As a survey from the Asset Based Finance Association predicts sector growth of 9% in 2013*, we talk to MARK PARSONS, Director of Lloyds Bank Commercial Finance, about what's driving this.

    “The increase we’ve seen in the sector is partly due to businesses taking a much tighter hold of costs and managing cash flow more closely,” says Mark Parsons. “But that’s just part of the story. What we’re also seeing is asset-based lending becoming much more part of the mainstream strategic solutions that savvy corporates are exploring.”


    It’s a move mirrored by Lloyds Bank’s joined-up approach, which is seeing its Commercial Finance teams working closely with their relationship colleagues to deliver the financing packages that work best for business.


    “We certainly see it as an important element of the Bank’s support for businesses and industry,” agrees Mark. “For example, some 25% of the £700m we’ve committed to UK manufacturing consisted of invoice finance.”


    For businesses considering growth – whether by acquisition, management buy-out or other investment – asset-based lending can offer increased flexibility and agility when used alone or as part of a funding package. “Companies are realising that, as well as being incredibly flexible, asset-based lending often doesn’t impact on the business’ other credit lines, as security is intrinsic,” remarks Mark. “This can offer additional headroom for those companies keen to pursue growth.”


    Many companies have used asset-based lending to grow their business – Timbmet, ANA Aviation and Aston Manor Cider are a few good examples.


    For Oxford-headquartered Timbmet Group an asset-based lending structured funding package provided the capital to support day-to-day operations and finance to develop its business in international markets. “Working with the Commercial Banking team, we created a hybrid solution for Timbmet using traditional bank debt to support its property needs and asset-based lending against its stock and debtors,” says Mark.


    The innovative solution supported the company’s goals, says Timbmet’s Chief Operating Officer, Paul Rivers: “We’re looking for a long-term relationship with a banking provider who understands our market and specific finance requirements. Lloyds Bank structured a bespoke financial package that supports our day-to-day needs and provides us with the headroom to grow our international operations.”


    Growth was also on the agenda for Crawley-based ANA Aviation as it sought an MBO to secure the next generation of the business. Structuring a pan-European funding solution that encompasses each of the countries where ANA operates, Lloyds Bank Commercial Finance implemented a £10m multi-currency facility, as well as providing essential working capital support.


    For Andy Leslie, Managing Director of ANA Aviation, the solution will help to address a key objective: “We are looking to significantly expand the business over the next five years. It’s good to know that the company has the right funding structure in place with Lloyds Bank Commercial Finance to help us achieve that growth.”


    When West Midlands cider producer, Aston Manor Cider, was looking to invest in new plant and machinery to increase its production capacity and drive efficiencies, an asset-based lending solution, which included hire purchase facilities, provided exactly what the business needed.


    "We have identified some key growth opportunities, which will require some investment in our operational capacity,” says Managing Director of Aston Manor Cider, Gordon Johncox.


    “The asset-based funding from Lloyds Bank Commercial Finance means that as our business grows, the inevitable requirement for further working capital is met. We see this as a very elegant solution to working capital squeeze, which is a classic problem for rapidly growing businesses,” adds Aston Manor Cider Finance Director, James Ellis.


    And, as Mark points out, these are just a few examples of how businesses are using asset-based lending to grow. “Using their assets to fund growth is more and more being seen as a logical step for companies,” he says. “Whether that’s to fund domestic and international expansion, invest in machinery to increase or streamline production, or use asset-based lending to grow organically or through acquisition, businesses are increasingly seeing the potential that asset-based lending can offer.”


    *Source: www.abfa.org.uk (News release 27/3/2013)


    For more information on Lloyds Bank Commercial Finance, please visit www.lloydsbankcommercialfinance.co.uk/


    Asset Based Lending facilities comprise of a range of products and services offered by Lloyds Bank Commercial Finance, a trading name of Lloyds Bank Commercial Finance Ltd. 

9/28/2020 10:08:21 PM