Finance: It’s not like it used to be!

I was reminiscing with a client recently about how different it used to be trying to raise finance from the bank, prior to the credit crunch.

Just over ten years ago our business moved office and had a lot of expenditure upgrading the premises, which put a strain on our cashflow. To help tide us over a quick email to our relationship manager outlining the financial projections of the move and the impact on our cashflow forecast moving forward, followed by a lunch, was all that it took to secure a 12-month loan, at a very reasonable interest rate and low arrangement fee.

The next day the paperwork was signed without any need for endless security, and by the end of the week the money was in the bank. I can always remember the manager’s words at the end of lunch. “Colin, you won’t let me down will you?”  Well no, I didn't let him down, and the loan was paid off in full over the 12 months as forecast.

How things have changed since the credit crunch! I know that banks are constantly saying they are open for business, but I cannot imagine a loan being granted at such short notice these days on the same terms.

One thing that still remains constant though, is the need for robust forecasts, both profit & loss and cashflow, that allow business owners to plan for the future.

These forecasts are vital if a business is looking to invest in new products or services, and if a bank is going to grant a loan they will want to ‘stress test’ a company to ensure that it can afford the repayments, as well as having necessary security in place.

Having a Finance Director within your business, whether full- or part-time, who is adept at putting these forecasts together, will help your company to gain considerable credibility with the banks and help secure funding. I believe this so strongly that I now work part-time with small businesses as an Associate at South West FD (SWFD), in addition to my long-standing role as Chairman and Finance Director within my own business, Target PR.

As the UK hopefully continues to recover there is likely to be more borrowing requirement to boost the economy. So let me unashamedly plug SWFD, which has a number of Associates who can give businesses financial credibility by putting in place budgets, forecasts and cashflow statements that will ensure you will be in the perfect position to approach either a bank, or external investor, to raise funds and move your business forward.

Colin Spencer

Chairman

All Roads Lead to Cheltenham

This week Cheltenham will be staging one of the UK’s premier sporting events as the 2013 National Hunt Festival is staged at Prestbury Park, featuring four days of top class racing.

Racing is a great passion of mine, so I’d like to share some fantastic facts, followed by a few nags that may be worth a flutter…

The event attracts around 230,000 spectators generating ticket sales of more than £7 million, with 27 races, offering more than £3m in prize money, culminating with the prestigious Cheltenham Gold Cup on Friday.

The Festival has grown significantly over the years and now generates a staggering £50 million for the local economy. Some of the statistics are quite amazing:

- 5,000 temporary staff are employed
- 10,000 beds in the town are sold each night
- 220,000 pints of Guinness are consumed at the course
- 12,000 people sit down to lunch at the course each day
- 30,000 cars and 2,000 coaches bring people to the course
- Over 600 helicopter landings, making this the busiest temporary airfield in the country
- Over £1m cash is withdrawn from the cash machines on course
- Over £1m passes hands in the betting ring for each race
- Off course, bookmakers take more than £600m on the Festival
- Unknown amounts are gambled in all night poker schools

If this is your first visit to Cheltenham, you may be surprised to find that, unlike other sports events, the crowd is constantly moving from parade ring to the stands, to the bar, to the toilet, to the shops, not necessarily in that order. I suggest you try and take time to go into the centre of the course so you can get up close to the horses jumping a fence and appreciate the speed and bravery of the jockeys. It’s a great vantage point to take in the huge number of people in the stands opposite and to hear the roar when a well-backed horse wins, especially one from Ireland!

The Jockey Club is always looking at ways to develop facilities at the racecourse and they are going to be renovating some of the older stands over the next few years, which is long overdue and a welcome improvement. It will be strange not to see Edward Gillespie at the helm this year, as he stood down after more than 30 years as Chief Executive. His forward thinking and organisation have made such a huge contribution to growing the Festival, making the venue a lot more than ‘just a racecourse’, and a place of which the people of Cheltenham can feel justly proud.

No article about the Festival would be complete without a few pointers to some winners this week! So here are some long-range selections for all 27 races, that should give you a run for your money:


Tuesday

1.30 - Dodging Bullets
2.05 - Overturn
2.40 - Fruity O’Rooney
3.20 - Rock on Ruby
4.00 - Arabella Boy
4.40 - Quevega (each way alternative Kentford Gray Lady)
5.15 - Shangani

Wednesday

1.30 - Lyreen Legend
2.05 - Taquin de Seuil
2.40 - Unioniste
3.20 - Sprinter Sacre (each way alternative Somersby)
4.00 - Pendra
4.40 - Bordoni
5.15 - Golantilla

Thursday

1.30 - Aupcharlie
2.05 - Seymour Eric
2.40 - Menorah
3.20 - Reve de Sivola
4.00 - Poquelin
4.40 - Frisco Depot

Friday

1.30 - Our Conor
2.05 - Edgardo Sol
2.40 - Conneygree
3.20 (Gold Cup) - Sir Des Champs (each way alternative Captain Chris)
4.00 - Cottage Oak
4.40 - Art Professor
5.15 - Tanks For That

Enjoy!

Colin Spencer
Chairman