Below is an article from "Print and Paper Monthly"
FINANCE FOR THE DIGITAL PRINT MARKET
Katie Dowse of Ideal Leasing and Finance says that some banks are beginning to lend to small to medium sized businesses again, as long as the right level of information can be provided.
Funding for a printer, whether you are a one man band, franchise, or employ 50 people, is essential to keep the business moving forward with current and modern equipment.
In the past three years, funding for the small to medium business has got increasingly difficult with funders tightening underwriting criteria, increasing rates, withdrawing from the market completely or at worst going bust.
At Ideal Leasing and Finance we are seeing a change, and a positive one. There are a few banks out there who are prepared to listen to the finance broker, hear what we have to say about the customer, you the printer, and not just purely ‘balance sheet’ underwrite. This is good news, as it means that, with the right information, the right deal from the supplier, and a good proposal put to the right funder, business can be written and essential finance given to customers.
So what makes a good deal from a bank’s point of view? We work with our funders to provide:
Accounting information – this must be up to date, accounts filed on time, or if not filed available for viewing.
Management accounts should be kept by all printers, whatever their size; this gives the banks the chance to see the business as it is today, not how it was a year or more ago. Times have been tough in the print industry but for those who have turned the corner, proof is required.
A well managed bank account – many printers run overdrafts; this is fine, banks understand this, and would expect to also see factoring facilities in many businesses.
The right reason for acquiring the equipment – are there savings to be made by upgrading your existing equipment? Do you have a new contract or product that the equipment will be used for, or is this your first piece of digital equipment? The better the financial proposition for your company the better the proposition to the bank.
The supplier – has the supplier put the right deal forward for you? If you are upgrading your equipment is the service pricing good? Does it give you significant savings? If not, is it worth waiting, particularly if you are still paying for an existing machine? Is it the right machine? Have you thought about reconditioned equipment, particularly if you are new to the market? Start with a machine you can comfortably manage financially, unless you really know you have the work for it.
Security – if your accounts are not in tip top condition expect to be asked for additional security. This could be in the form of personal guarantees, or taking litho equipment as security, or charges on properties.
We must remember that the world of banking has changed and how we obtain finance has changed. The government, as we hear on a weekly basis, tries to push the banks into lending to small businesses, but their argument in return is we will only lend if it is quality lending.
You may never have been asked before for certain information or guarantees but lenders have a duty to lend responsibly. Remember, in their eyes, if company directors or proprietors are not confident in providing good information or backing their business, then why should they? It’s harsh but unfortunately true.
We work very closely with our selective funders at the initial proposal stage, during the agreement and at the end of the agreement to achieve the right result for all parties involved, whether that be for leasing, refinancing or factoring. We do all want the same outcome: banks want business, manufacturers want to sell equipment, and most of all, you want a successful, profitable business with the finance to have the right equipment for you to be able to achieve this.
a great deal • just better • ideal leasing and finance