Shawbrook’s head of asset-based lending, Oliver Wilson, explains how his team’s flexible approach, emphasis on communication and growth mindset are delivering for a range of UK SMEs.
Shawbrook, an established specialist in SME finance, continues to evolve its proposition, including the launch of a new “dedicated asset-based lending (ABL) team”, says Oliver Wilson, the firm’s head of asset-based lending. ABL, he explains, is a growth area for the business with key interest from SME clients due to its flexibility and emphasis on growth.
Long associated with working capital, the ABL proposition has evolved significantly at Shawbrook to provide not just cashflow headroom but also the firepower to fund strategic investments.
By looking at a company’s assets, whether stock, real estate, accounts receivables or more, Shawbrook can offer “a level of flexibility and certainty” that clients can’t get with other types of debt structure. Furthermore, “where profitability is growing, we can assess both the assets and the cash flows to come up with the most flexible debt structure”, says Wilson.
The client experience is also important when considering the right funder and the most flexible facility. “Our dedicated ABL team has absolute focus and expertise in the markets we serve,” he says. “As we continue to work with more complex requirements we need to ensure we have the right knowledge and experience in the team to provide the best service.” This service includes a high “ability to understand the different types of assets and how suitable they are for collateral” to create a facility that is flexible and beneficial to a client’s growth prospect.
For those still unsure about whether ABL is the right lending structure, Wilson makes crystal clear the benefits. Firstly, as the facility is designed to revolve, there’s often more flexibility on capital repayments, which “can seriously reduce pressure on the cash flow of the borrower.” ABL facilities can also “grow with the customer, expanding in-line with the growth of the business”, and, crucially, quantum is “based on both the wider asset pool of the business as well as taking into account profitability,” he says. “This more holistic approach often means businesses can access a larger amount of borrowing via ABL.”
Wilson goes on to explain that funders with the expertise to provide both ABL and leveraged finance within the same structure for the same client are few and far between, particularly outside of the US. But at Shawbrook, “we can provide both ABL and leveraged finance to the same customer during the same transaction, it’s the best of both worlds and not many can combine this as we do.”
A recent example of this in action involved Goodfish Group, a leading provider of plastic injection moulding, assembly and extrusion manufacturing services. Goodfish approached Shawbrook, and their ABL team was able to construct a flexible ABL facility to support its acquisition of Schneider Electric’s UK extrusion and assembly business in Flint, Wales, and to super-charge its working capital facilities for future growth. Not only did the multi-asset facility support the complex nature and timelines of the transaction, it also helped the firm expand its footprint and meet rising demand for its services in the building and construction sectors. “Borrowing more in the right structure can support growth and profitability rather than being a drain on it,” Wilson summarises.
As Shawbrook is focused on helping clients with their growth journey, regular contact and good communication is key to a successful relationship. Managers run small portfolios of between twelve to fifteen clients only, so have stronger and more personal relationships with each management team, including regular ad hoc communication and face-to-face meetings quarterly as a minimum. “I’ve sat in front of hundreds of SMEs,” explains Wilson, “and what’s important to them when choosing a debt provider is they want flexibility, a solid and reliable relationship and certainty of delivery.”
When it comes to Wilson’s ABL team, “technical expertise and financial skill sets” are a given. But what is arguably even more important to its success with clients are the soft skills, helping them to “listen to what the customer wants, communicate effectively, manage the risk on our end and give them the best solution.” With this dedicated approach in mind, they have moved on with team expansion with Wilson having recruited “an experienced originator focused on supporting North based clients and two skilled analysts to support our originators and clients.”
“There is little shortage of lenders out there,” Wilson concludes, “but building rapport and a relationship where there is trust and open communication is different, and it’s at the front and centre of how we operate.”