Shawbrook’s head of corporate leverage, Chris Walton explains how the bank’s personalised and flexible approach to finance helps SMEs reach their strategic objectives.
Growth is a top-level goal in any ambitious SME. At Shawbrook, a specialist consumer and business savings and lending bank, facilitating SME growth by providing a personal, practical and creative approach to lending is what they are all about, explains Shawbrook’s head of corporate leverage, Chris Walton.
Shawbrook helps SME clients achieve their growth objectives by providing the finance they need to embark on ambitious projects or business milestones. This includes helping them to buy other businesses, known as acquisitions: “They [acquisitions] enable growth-minded businesses to accelerate, leapfrogging into a new marketplace, geography or product area. It’s an opportunity for them to achieve greater scale and make their business more resilient. All sorts of SMEs approach Shawbrook for support; from “mature family-owned businesses operating for decades” to younger firms set up with acquisitions in mind. Shawbrook is sector agnostic, and supports firms from a range of backgrounds. Ideal candidates for acquisition finance include SMEs with “typically strong revenue streams, good margins, and high cash conversion.” It largely works with clients with earnings “north of £1m” with a “typical lending of between £3-20m.”
Chris has advice for SMEs thinking about accessing this form of finance, “do your prep work”. This includes taking the time to “think carefully about what sort of businesses they want to buy,” and whether it “complements their existing business.”
Chris Walton, Shawbrook’s head of corporate leverageThere is a growing trend of SMEs seeking acquisition finance despite recent economic hurdles. Chris believes some of the challenges arising from government policies, Brexit and Covid-19, have created opportunities for ambitious SMEs, who are able to buy out busi
nesses at attractive prices. “Sensible acquisitions enable them to thrive,” he explains.
While the National Insurance hike is a talking point among his clientele, Chris confirms it hasn’t diminished their appetite. However, they are “looking carefully at financial forecasting” and the hike has “impacted the price paid for targets with earnings reduced from tax changes.”
Shawbrook’s market differentiator in the acquisition finance space is its specialist staff and individual approach to supporting clients through their lending journey. This begins via early-stage meetings with management teams where Shawbrook works on “understanding the business” including the “critical components of how they interact with their own clients.”
Discussions on the client’s market and business strategy, and even site visits for tangible businesses, are part of the service and all help Shawbrook understand their unique story to structure the ideal financing package for the client, “there’s no one size fits all.”
With loans typically spanning between three to five years in duration, it’s a “long-term relationship.” Clients are contacted and supported regularly, especially if there’s a big event such as a major acquisition or refinancing needs. “There’s capacity as the business grows to provide follow-on financing”, Chris comments.
Unlike traditional lenders, Shawbrook clients deal with a smaller, dedicated team of experts, enabling close relationships and an environment of trust to take hold. With Shawbrook, clients regularly speak to “two to three key contacts, including senior managers.” Shawbrook also provides “consistent, high-quality service” with “no long drawn-out processes” or “chopping and changing the deal” which can happen with traditional lenders. The personal approach is delivered through dedicated teams that manage a smaller number of clients to ensure a consistent level of service, and enable decisions to be made faster due to shorter lines of communication. “Our client-facing colleagues speak directly with key decision makers to get insight on how they may structure a deal,” he says, “which is simply not possible with high street lenders who have much larger portfolios and more complex organisations to navigate”.
Crucial to this personal service is the strong interpersonal skills among the Shawbrook team: “A lot of our clients are first-time borrowers, and don’t have as much experience of complex financial products, so we take them on that journey and clearly explain the facilities and processes needed to support with their requirements.”
“We’re a specialist lending bank, my team’s sole focus is to structure finance to support ambitious business owners in achieving their goals” Chris concludes. Well, if you’re a growth-minded SME with strong foundations in need of financing for the next exciting stage of your journey, work with the experts!