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Paul Stephens, Head of Corporate and Asset Based Lending at Close Brothers Commercial Finance, says accountants can play a crucial role in helping companies manage their working capital. 

These are challenging times for SMEs, and in unusual times, they need to manage their businesses prudently. That is the view of Paul Stephens, Head of Corporate and Asset Based Lending at Close Brothers Commercial Finance. Stephens says SMEs can be increasingly agile in managing their working capital. 

Close Brothers Commercial Finance is a division of Close Brothers Group, an FTSE250 company listed on the London Stock Exchange. The organisation first opened its doors in Ireland during the 2008 financial crisis, offering bespoke products, including invoice financing, asset finance and asset-based lending.

As the Irish economy continues its recovery from the COVID-19 pandemic, SMEs face a new era of economic and global political turbulence. Stephens says Close Brothers Commercial Finance’s prudent approach means they are ideally placed to help SMEs consolidate and build their businesses in the months and years ahead.

“SMEs have shown resilience, and they need to manage their working capital.  At Close Brothers, we run a regular business barometer. One of the interesting insights we have found is that 30 percent of businesses say they mainly go to their accountant for advice and support in managing their working capital, “ he says.

“As an accountant myself and a member of the institute since December 1999, I realise that SMEs are heavily dependent on their funders. The number of pillar-banks in the market is decreasing, but other alternative funders are entering the market.” 

“It’s a challenge for SMEs to navigate their way through the sea of options out there, and they need their accountants to help them figure out who can best meet their needs and provide certainty of execution. 

“We share a lot of the values that accountants have. Like us, they seek to build long-term relationships with customers and grow with them. We are here for the long-term, and we’ll be here to help businesses through this cycle and future cycles as we have been in the past.“

One of Close Brothers’ key value propositions for SMEs, says Stephens, is that they operate on an all-Ireland basis.

“We have offices in Belfast, Cork, Dublin and Galway, and we have been able to give dual jurisdiction funding to SMEs so that they haven’t had to rely on a bank that only operates in one. We can lend across both Ireland and the UK, which is where we can give more help to SMEs.” 

Seeking funding through invoice finance and asset based lending

Invoice finance, says Stephens, provides quick access to cash and offers an alternative to traditional types of business finance. It can also be more flexible than an overdraft or loan which may not grow with businesses as readily. 

“If we look at the barometer, 37 percent of businesses say they have missed opportunities in the last twelve months due to lack of available finance. They can make a sale, but getting invoices paid on time is challenging. Our invoice financing and asset-based lending products allow SMEs to fund key requirements,” he says.

Asset based lending (ABL) offers a combination of invoice finance with funds released against other asset classes on a company’s balance sheet. It can be applied to stock, property, plant and machinery. ABL can be an option for businesses looking to fund a management buy-out/buy-in, a merger or an acquisition. The extra funds raised through ABL can also be used to generate additional working capital, or facilitate investment.

“Based on the information we have obtained from our business barometer, 59 percent of businesses plan to seek funding in the next months. Our commercially-focused products will be able to support many of them,” he says.

Stephens says Close Brothers Commercial Finance’s ABL product is entirely bespoke, based on the specific requirements of transactions and the structure of each business. “We fund against a range of assets, including inventory and property, on a flexible basis and can provide up to 90 percent prepayment on accounts receivable, as well as cash flow loans,” he says. “We can also offer asset finance solutions, such as hire purchase, refinance and leasing.”

These alternative products are becoming increasingly important for Irish SMEs, says Stephens, helping to release equity tied-up in working capital assets. 

Further information on Close Brothers Commercial Finance is available at www.closecommercialfinance.ie. You can contact Paul Stephens on +44 2890995701 and +353 19015224.

This article is sponsored by Close Brothers.