After the turmoil, the COVID 19 pandemic inflicted in 2020 the new year did not get off to a great start when the country went into lockdown again on 4th January. As we enter the 2021 Christmas holiday season the signs look ominous again that there may be further restrictions ahead.
It’s certainly been a turbulent period for the economy but what we’ve observed over the last year is that the U.K.’s SME business community is resilient, to say the least. Yes, the Government’s various support schemes have helped but let’s not take anything away from all the SME owners who’ve worked tirelessly to keep their businesses going through these tough times. They’ve adapted and diversified to ensure they stayed in business, and I have tremendous respect for them.
PMD’s 2021 has been positively eventful, to say the least, and I’d like to share some of the highlights with you.
In 2021 we’ve so far written 2,363 facilities to the end of November and we’re anticipating this hitting 2,552 by year-end. This adds up to £182 million advanced and it looks like we’ll just get over the £200m mark before we’ve finished. This is a real milestone that the PMD team will be incredibly proud of.
These lending numbers were provided by PMD’s growing portfolio of alternative finance providers that is now in excess of 125. We greatly appreciate their support.
In February Tom Brown, Lee Schofield, and Rob Dermody bought out Mike Rodgers and I, the founding directors. The MBO provides an exciting, long-term future for the business allowing it to achieve its true potential. Mike and I will remain in our roles for the next couple of years to support the business through this transition.
Our people are the lifeblood of the business, and they create the great service levels we offer. I’m happy to report that due to customer demand we’ve added a further 10 people to our team.
Several of our current sales team came through our Accelerate Academy, which takes young dynamic people, who have no previous business finance experience and navigates them through a demanding but supportive training program. Further recruits have been into the Academy in 2021 and we’re eager to watch their growth next year.
Whilst our people will always be the key component to our service levels, we also implemented a bespoke IT system that has made us so much more efficient. Huge thanks must go to our Operations Manager, Jonny Kirkham, and our Head of IT, Luke Buckley who’ve devoted countless hours, along with blood sweat, and tears to this project. The way they’ve innovated and adapted the system to make us much more efficient is something that must be acknowledged. The business will benefit from this investment for many years ahead.
The alternative finance providers have pretty much taken over due to the lack of ambition the high street banks have shown. Many SMEs now have a diverse range of finance providers rather than being beholden to a bank that holds them back and limits their potential. It’s really been a ‘changing of the guard’. Most of these alternative providers don’t deal directly with clients but work through professional and accredited brokers like us. By the way, PMD now rumours to be the U.K.’s largest independent broker!
Our client base is diverse and as well as the traditional industries that regularly use asset finance such as construction, manufacturing, and haulage PMD also supports businesses that are in the B2C space, and these were particularly hit hard during the lockdowns. Businesses like beauticians, gyms, hospitality venues, etc. had to close and many found it difficult to receive any government support. However, it was inspiring to witness their resilience to survive. I’m happy to see the majority recover in the middle of the year with many back to pre-pandemic trading levels.
We supported many clients who utilised the Coronavirus Business Interruption Loan Scheme (CBILS) scheme that was designed to provide financial support to smaller businesses that were losing revenue and seeing their cash flow disrupted because of the COVID 19 outbreak. The scheme was launched in 2020 but phased out at the end of May 2021. It was then replaced by the Recovery Loan Scheme that will be available until June 2022.
The CBILS scheme offered very attractive terms for clients, many of who enjoyed zero interest and no capital repayments in the first 12 months along with competitive rates for the remaining term. RLS isn’t quite as attractive and hasn’t been as popular, but we’ve written our fair share of deals. The scheme appeals to businesses that can afford to take out additional debt. It can also be used for any legitimate business purpose, including managing cash flow, investment, and growth. One of the major benefits is that under £250,000 there is no requirement for a director’s guarantee. This is a comforting factor in uncertain times.
During the year many clients started to consider their exit plans. Especially with the pandemic challenges and worry about potential increases in capital gains tax. Acquisition, MBO, and debt restructuring activity were buoyant and our Structured Finance department enjoyed continued growth throughout the year. In September John Platt joined us to head up our property division. John previously worked for a high street bank’s corporate team for 20 years as a regional director. He brings with him a huge amount of experience and expertise to further enhance the Structured Finance department. John’s recruitment now allows us to handle all facets of corporate and structured finance funding in-house and we can provide a holistic asset-based lending solution to both clients and professional advisors.
Our property division provides the whole range of commercial property funding. This includes; acquisition, refinance, equity release, development schemes, and second charge funding.
We’ve further developed our professional partnership network, which includes accountants, debt advisory firms, and legal practices. The attraction is that their clients have access to the whole business finance market through one reliable and professional source. This allows them to source the best and most relevant solutions for their clients further enhancing their relationship.
Merchant Cash Advance is another addition to our product portfolio in 2021. Simply, this allows any clients who use a credit/ debit card terminal to advance money against future card receipts. The amount is repaid by a small deduction in future card takings. This helps tailor repayments to seasonal fluctuations and quieter trading periods. Funds can be advanced within a few days of application. This has massively benefited clients in the B2C space – including, garages, hospitality, beauty salons, etc. providing a much-needed cash injection when required.
Road Haulage Association
In March 2021 the Road Haulage Association appointed PMD as its preferred business finance partner and launched this to their membership base as RHA Business Finance driven by PMD. The RHA represents a huge amount of the U.K.’s hauliers and we’re happy to support them and their members. In addition to offering them our full range of services we also provide them with a unique benchmarking service. This allows them to check any business finance pricing on offers received. We also ensure the right finance product is in use and that they fully understand the nature of the transaction. This is a complimentary service that our clients receive well.
Our Sales Solutions Experts business handles ‘point of sale’ finance for suppliers of plant/ machinery, equipment, and commercial vehicles and has grown significantly especially, in adding multiple van dealerships to its portfolio. These range from smaller independently owned dealers to major franchise operators. Feedback garnered from our suppliers point to our differentiating features. These included speed, ability to place more deals, competitive pricing, and regular transparent communication through the sales process.
When I started to write this article, I didn’t realise how much we’d achieved this year. I’m sure you’ll agree we’ve not stood still in 2021 but have stayed focused on our objective. This is to make business finance easier to access so that businesses can grow and find their true potential. I’d like to thank all our clients, suppliers, and referrers of business for your support during 2021. It is very much appreciated.
On behalf of everyone here at PMD Business Finance, I would like to wish you a Happy Christmas and a prosperous 2022. Enjoy the festive period and I hope that we can continue working together in 2022.