On the 2nd way of Christmas funding

On the 2nd way of Christmas funding,
Sterling could source for Santa

Trade Finance


As we all know many products are Made in China (by the Chinese Elves) and purchased by Santa for gifts.
Not being entirely unaffected by the global financial crash and somewhat scared by a misdirected Court summons (intended for Iceland – the country not the store) he just avoided having his assets frozen.
Santa was anxious that Santa Enterprises has access to sufficient and appropriate finance; Sterling Capital stepped in and arranged Trade Finance.  The Chinese Elves demanded payment up front which concerned Santa as in the past some of the goods were delivered late.
To solve the problem we suggested Santa Enterprises pays via a Letter of Credit so if the goods aren’t received on time Santa won’t be out of pocket.

Sterling Capital Reserve Limited is a broker and not a lender
and is authorised and regulated by the Financial Conduct Authority

Remember funding isn’t just for Christmas

1st way of Christmas funding

On the 1st Way of Christmas funding,
Sterling could source for Santa

Invoice Finance


Throughout December Santa will be appearing at thousands of Shopping Centres and Garden Centre Grottos, but would you believe he won’t get paid till March! Hold onto your holly and fret ye not, Sterling Capital have arranged a confidential invoice finance facility for Santa Enterprises and his customers won’t ever know he was strapped for cash.


Sterling Capital Reserve Limited is a broker and not a lender
and is authorised and regulated by the Financial Conduct Authority

Remember funding isn’t just for Christmas

12 ways of Christmas funding


How we could source funding for Santa

We all appreciate that Santa delivers the presents, but have we really thought about the logistics and the funding requirement that goes on behind the scenes in this massive logistical operation?

Just suppose for one year that their bank couldn’t assist Santa Enterprises Ltd, for whatever reason…  What would Santa do?

If his Bank referred Santa to our “elves”, this is how we may be able to assist.

12 ways of Christmas funding
starts tomorrow…

Sterling Capital Reserve Limited is a broker and not a lender
and is authorised and regulated by the Financial Conduct Authority

Remember funding isn’t just for Christmas

APN’s (accelerated payment notices)

APN’s  (accelerated payment notices)  were introduced in 2014, but are now starting to bite on UK businesses.

Basically, any business utilising a tax avoidance scheme, will now need to pay up first and dispute later.  This has far reaching consequences on UK businesses, especially on Cash Flow.

Since the new rules were introduced in 2014, over 60,000 APN’s have been issued , this has forced tax avoidance scheme users to pay up £3bn of disputed tax upfront while their tax affairs are investigated by HMRC.

Under the scheme, which removes the economic advantage of taking part in tax avoidance by forcing them to pay up first and dispute later, a taxpayer with an outstanding tax bill has 90 days once an APN is received to pay up or make representation to HMRC if they consider the notice incorrect.

HMRC comment: “The vast majority of avoidance schemes just don’t work. We’re determined to change the economics of tax avoidance by making it harder for the dishonest minority to cheat the system – collecting disputed tax upfront and tough new sanctions for enablers of tax avoidance will mean people will think twice.”

We have recently seen many businesses approach us for finance that are  “trapped” in this situation.  Typically, they have taken out a tax scheme, and enjoyed the extraction of cash blissfully thinking that the issue will “go away”.

Now HMRC come along and demand a “deposit” of the amount of tax potentially avoided, if you want to contest the case, obviously all businesses do…..  HMRC’s attitude is – If “we win” we keep it, “if you win, you can have it back”.

This has a potentially massive impact on cash flow, especially as HMRC are reluctant to enter into any Time to Pay agreements beyond 12m (if you are lucky).

As a bCommercial Finance Brokerage, we have access to funders more than happy to provide funding against these sort of scenarios.   
We have arranged 3 similar refinances this week alone.

Looking for No 4 …………..Contact us

MBI Funding

Sterling Capital Reserve have vast experience in advising management teams on debt funded management buy-in (MBI) procedures where a new merger team take ownership of the business.

Obtaining finance for a management buy in is traditionally a difficult process, particularly when compared to a management buyout. From a lender’s perspective, a key consideration for MBIs will be the high inherent risk attached to an incoming management that will not be as familiar with the business as the incumbent management team. It is because of this risk that funding can prove trickier to secure. Banks can often be hesitant to lend for this reason but thankfully, through our key relationships with a variety of niche lenders and private lending consortiums, we have access to a wide range of funding options that can make the difference.

We are recognised as a leading adviser on MBIs with the experience, commitment and relationships to manage the often complex and time consuming process on behalf of management Buy-in teams.


We are regularly called in to assist Accountants and Corporate advisers source funding for MBI’s for their clients.  We are also referred to many proposed transactions by banks who can’t provide MBI finance.  We help fund the deal, then the bank takes the client back (at a cheaper rate) in 12 months time as a refinance.

Revolving Credit Facilities

We are seeing an increasing use of revolving unsecured credit facilities that are now provided by niche lenders. These facilities are totally unsecured, but utilise credit insurance on the borrower.  So if the borrower is profitable, has net assets in excess of £250k and established more than 2 years, an insurable limit can usually be obtained.

Funding up to £1million, can be used, repaid and reused as often as cash flow cycle requires. The lender simply pays the supplier direct, no lien is taken over any purchases and the “credit line” can be utilised for up to 120 days.

There are no set-up fees and no minimum transaction volumes. As charges are only made when the facility is used, it offers an excellent back up finance facility without charges on the company or personal guarantees. Also because this facility does not compromise the security arrangements with other business funders, this unsecured credit facility can work alongside existing business bank finance.

Advantages of a revolving credit facility:

Additional Funding over and above existing lines
Pay as you use arrangement
No security required
No personal guarantees required
Take advantage of opportunistic purchases
Negotiate supplier discounts for early repayment

We have utilised this facility for a number of our clients, for a variety of purchases from steel, raw materials, food through to caravans and motor vehicles.

It works and clients like the flexibility.  It’s good to see Alternative Lenders coming up with innovative and appropriate financial products to compliment bank lending.


Concentrated contractual debtors, can be tough to fund through Invoice Finance but…

Concentrated contractual debtors, in this case construction, can be tough to fund through Invoice Finance but…

We recently took a call from one of our Invoice Finance contacts, they were unable to help a prospect which had secured  significant work with a PLC main contractor.

In the evolving Alternative Finance sector there are now a number of lenders/platforms who will consider lending in circumstances like this and some will even led against applications rather than waiting for the invoice to be raised.

In this instance we were able to arrange a 75% prepayment against the invoice with the Lender content to continue to support the business through the term of the contract.

Happy client, and the introducer has indirectly supported the prospect, added value and strengthened its relationship with the prospect which may well lead to future business.

The Commercial Finance / Alternative Finance Market is constantly changing not every situation is fundable but It’s always worth giving us a call.


Funding for MBO’s / MBI’s

In the SME sector, banks continue to have limited or no appetite for providing cash flow loans for Management Buy Ins (“MBI”) or Management Buy Outs (“MBO”) where the EBITDA is below £500k.   Whether this is due to higher risk, lack of skill set within the banks at this level, or not enough return to the banks (or a combination of all three) the banks won’t be drawn, it is accepted that is just their policy.

We have funded MBO’s and MBI’s using debt finance from a private lending consortium thereby providing a line of funding to transactions that can complement and blend with other funding lines including invoice discounting, asset finance and commercial mortgages to get away transactions that would otherwise flounder.

This alternative funding line has become more and more prevalent in funding corporate finance transactions, as the consortium lenders have far more empathy with the proposed transaction than most banks and are therefore willing to take a commercial viewpoint.

We view this funding as a “means to an end” to get the transaction away, and have helped many Corporate Finance professionals get their deals over the line . Within 6 to 12 months the bank is more than happy to take the deal back by refinancing the debt.   They are happy to do a refinance, but not a MBO/MBI !

Community Interest Companies

We have access to a specialist syndicate actively looking to provide finance to CIC’s. This enables viable commercial businesses with charitable or community objectives to borrow directly from a like minded syndicate where historically banks have been reluctant to lend. This is conditional upon the business qualifying for, and the lenders receiving SITR (Social Investment Tax Relief) at 30%.

This opens up additional funding lines for over 10,000 UK registered CIC’s. We are looking at a number of projects at the moment including funding artificial pitches for community football clubs, refurbishment of a community theatre, providing loan funding to CDFI’s, finance for a medical charity and even the purchase of a steam train.


7 Deadly Sins of Funding

Another chance to see our blog on the 7 deadly sins of funding

7 Deadly Funding Sins

7. Pride

Well, you’ve made it to the end…our final deadly sin of funding.
Hopefully you’ve been taking them all on board and perhaps nodding along recognising a few of these traits in your own approach and also noting the ones you have been wise to avoid?
Great stuff. You know it ALL!
Careful. This can be dangerous ground. The last sin and the last thing that you want to seep into your property empire is PRIDE!
This doesn’t just apply to our advice (although we hope it has provided some great food for thought) but also to your experiences so far. Perhaps you’ve been in the game for a number of years, you’ve seen it all, boom, bust, boom again.

Before you know it, you’re toying with how it could have been if you had just had that bit of luck. How you would do what they have done with the place only far better. Well, you’ll show them. Next time, you’re having it, come what may. See how they like them apples!

Nothing phases you.

Maybe you somtimes hold court with your friends and colleagues about where they are missing out or going wrong in their approach? This can be invaluable of course, especially if they are just starting out, as a skilled mentor can really help new investors to avoid the pitfalls and trip wires.

However, we all know the old maxim, pride comes before a fall.

So how do you make sure this doesn’t happen to you? Well, might we humbly suggest that speaking to professional advisers like ourselves can be the icing on the cake?

We have the market knowledge that not only covers changes in funding and legislation but we are also incredibly well connected to others in the industry.

A chat with us might not only reveal some solutions to make your empire meaner, leaner and more productive financially, it might also just unearth a little gem of a deal that nobody else knows about.

It would be great to chat if you think we can help.

7. Pride

6. Envy

So…how’s the blood pressure after Nic revealed “Wrath” as our last deadly funding sin?
It’s easy to see how someone could get drawn into a bidding war as vengeance isn’t it? The problem is, there’s another banana skin waiting for you just around the corner of the auction room…Envy.
If you are following our guidance, you’ll know by now that you MUST put in the hard yards and do the research to back up your moves in the market. This is not a time to be throwing darts at a map and you know this. So you’re doing your research, you’ve been to numerous sites and you’ve sat in on a few auctions and gone after a few opportunities.

You know the market and you know the movers and shakers.

In fact, you are starting to feel that you them a little too well. You open the local paper and glancing through the property section you see that office unit you had your eye on the other month that you couldn’t quite stretch to. Surprise, surprise, guess who bought it? The usual suspects.

Oh and look, there’s that retail opportunity that you thought was in the bag only to be gazumped at the last minute by that anonymous phone bid. There they are, bold as brass doing a ribbon cutting on the place. Aarrgghhh!

Keeping your wrath in check (well done) you start to carefully make a list of ALL THE OTHERS that developer picked up that you could have had. The ones that got away. It feels a little like Arsene Wenger days after transfer deadline day (sorry Gooners, couldn’t resist!).

Before you know it, you’re toying with how it could have been if you had just had that bit of luck. How you would do what they have done with the place only far better. Well, you’ll show them. Next time, you’re having it, come what may. See how they like them apples!

The problem is, you’re losing perspective. It’s gone, let it go. Good luck to ’em. Stop focusing on what other people are up to and keep your eyes on the prize. There will be another along soon, in fact, it might be the perfect catch, even better than the one the other bloke is hoovering up. Keep your cards close and marshal your resources ready for the next opportunity that comes your way.

Now is not the time to blindly follow the herd or keep up with the Joneses.

PS – you’re lender will appreciate your laser focus, even if your rivals don’t.

6. Envy

5. Wrath

Consider our last deadly funding sin, which Andy considered last week,…Sloth.
Imagine the lethargy, the casual effort, the lazy approach. Now, strap yourself in, grip the edges of your chair, let the storm clouds gather in your mind and prepare to get really wound up…it is time to wreak your vengeance, it is time for WRATH!
Only…it isn’t. Or it had better not be. All the way through this series we have warned against letting emotions get the better of you and this is perhaps the classic case.

You’re at the auction, you’ve just been bidding for a unit you have had your eyes on for ages. You’ve done your research, it fits your model, you can afford it.
This is THE ONE!!
But wait, it has all gone wrong at the last minute. The chap sitting in front of you has outbid you at the last minute. You know you can’t afford this, in fact, you secretly think he can’t either. You gracefully bow out – well done.

Wait a minute, that’s not fair, that was MY lot, it was all so perfect.

Oh look, here he goes again, he’s after that little retail unit now. It’s not perfect but it’s not bad either. Actually, here’s your chance, you’ll show him, greedy so and so. You don’t want it that much but you can make this work yet and it will be one in the eye for him too! Perfect!

You start bidding but he’s still going. You up it a bit. Still going. Hmmm…not so sure you want this now but you’re in the red zone. The mist has descended.
We’ve all been there. Whether in a game of cards, monopoly or even in the queue at the bar, you feel hard done to if you missed out. It’s not fair. Well, all’s fair in love, war and property funding I’m afraid.

Stick to your guns but make sure they are firing in the right direction. Keep focused. Don’t get carried away bidding on something you have your heart set on if it blows your entire budget. Also, don’t set out to make up your perceived loss with a quick win somewhere else.

Stay cool my funding friend. Revenge is a dish best served cold but even then, it rarely tastes sweet if you can’t stomach it 24 hours later.

5. Wrath

4. Sloth

Ok, so last week Nic established last time that Greed CAN be good but it needs to be tempered. Scurrying around, chasing down your latest deal can be a real drain on resources.
So much so that it might eventually lead to the very opposite… Andy Hunt continues with Sloth.
So you want to be a property investor? You’ve watched a load of programs on TV now and quite frankly you are convinced you can do better. You just need that first big break.

However, we all know by now that those breaks are mainly made and very infrequently stumbled upon. I think it was Gary Player who said “the harder I practice, the luckier I get.”? Take that advice. In terms of property development and funding, the work is done in terms of research.

Start out with a blank piece of paper and set your objectives. This is a business and you need a sound business plan, especially if you are looking for funding down the line. On that note, do you know what your vision is? Is this a few buy-to-lets or is it a portfolio of commercial properties? Are you entering into a consortium? Is it, or could it be, part of a pension via a SIPP?

Once you have your cunning plan, you need to get out from behind your desk and get out into the field. If you haven’t invested before, get along to some auctions so you can get a feel for it. If you are already in the market, keep vigilant. Read the trade press and the local press – it is full of useful information and trends which you can leverage.

Finally, don’t let bad habits creep in due to sloth. Get the basics right and make sure that you are still visiting properties and sites. Yes, we know it can seem like a drag but it is crucial that you treat this as a business transaction.

Keep Sloth at bay and you will reap the dividends in the future.

4. Sloth

3. Greed

Greed is good. Or is it?
Nic Rotton is back to explore the next in our series of #7DeadlyFundingSins
Following close on the heels (probably quite slowly) of Gluttony, we have Greed – a close but subtly different sin for you to get your head around. Either way, it remains potentially deadly to your property portfolio if indulged.

Greed is defined as an “intense or excessive desire to acquire more than one needs or deserves”. Let’s park “deserves” for this one, it is the need and acquisitive streak that we need to deal with when it comes to property investment.

Who can forget the film Wall Street and its motto “greed is good”? Perhaps, on a market level, it IS. Or at least, it is needed, in order to keep the wheels of the market spinning and for folk to keep acquiring and selling. However, when it comes to your specific portfolio, be careful.

Greed in our context might result in a damaging bidding war at auction. You’ve seen it and you want so they CAN’T have it. You start bidding for things you neither need or, quite possibly can afford. OK, maybe you can afford it on paper but what will this next trinket do for your portfolio? Does it add balance? Does it fill a gap that you have been seeking to plug? Do you know that there is value in this so it is the right deal to pursue? If so, great. However, you have to keep in the mind the bigger picture.

Acquiring for the sake of status and reputation or perhaps out of spite to get one over on a rival is only going to end up costing you in the long run. Sure, the initial buzz might be wonderful but, “caveat emptor” as they say…examine your motives and make sure they fit your strategy.

Greed can be good but…bigger isn’t always better and you know what they say…more money, more problems.

Please feel free to contact us if you wish to repent your property funding sins

3. Greed

2. Gluttony

Last time out, Nic Rotton dealt with Lust and the importance of keeping a level head and being strategic with your property investments.
Next up, Andrew Hunt considers Gluttony which is going to be linked closely to Lust.
Gluttony stems from the Latin “gluttire” which means very simply to “gulp down or swallow” (you learn something new every day) but what it pertains to in funding property is pure overindulgence.

Now, you could be lusting after your next deal, as discussed before but something tells you to keep it in check. You know it isn’t quite right so you pass and move on. Wise. However, if that reflex doesn’t go off, we’re into the realm of Gluttony. Imagine yourself at an auction, you’ve seen something that looks just like your last successful deal, this is TOO easy, you start chasing after the deal, whether you are ready or not.

You want it because you can have it. We’ve all been to the all you can eat buffets and felt the thrill of getting a “bargain”. However, we’ve all also had the same indigestion and feelings of remorse after too much indulgence. It looked so tempting, it was right there and you were allowed it but beware gentle buyer.

Prevention, as they say, is better than the cure.

So, don’t start chasing after a deal just because you can, take a step back, make sure it fits your model. Does it complement your current portfolio or perhaps add some welcome diversification to spread your risk? Have you got the cash flow to support this or will it end up being an albatross around your neck. The last thing you want is it weighing you down and eventually strangling your resources.

2. Gluttony

Whilst every deal is different; residential, commercial or industrial, there are some consistent rules to follow. In fact, there are 7 to actively avoid.

We call them the #7DeadlyFundingSins

Nic Rotton from our Property Team starts with…
1. Lust

Cool your passions. Is the property you are interested in a part of your long-term strategy or are you blinded by its kerb appeal? Remember, this is a business decision.

Does it fit as part of your portfolio? Have you had success in this area and you KNOW that it will perform for you or is this a gut reaction?

Don’t bet on a property purely because of postcode snobbery, do your research. You may well find that for the same amount of money you could find two properties in a less “desirable” postcode but with a far greater return on investment.

Investing in your property portfolio should be based on sound decisions backed by evidence and experience. Speak to your advisers and other professionals who know the market and the location. Find out what return other people are getting but remember, don’t get carried away lusting after what someone else has, this has to be right for you.

Let’s say that you discover that commercial office opportunities can offer 10-12% yields but your model is currently in residential and you earn only 7-8%. Whilst it might well be tempting to lust after high short term yields in other sectors with which you have little experience, the long term impact on your portfolio could be dramatic. Stick with what works for you or if you do start to peer over the fence at other opportunities, ensure you have strong advice from someone with sector knowledge.

1. Lust