‘Look to the future’ – Ryecroft Glenton Corporate Finance’s Carl Swansbury urges firms to plan ahead

Business leaders and finance bosses must start shifting their focus from the impact of coronavirus to measures capable of delivering future success, a senior advisory firm official has said.

Carl Swansbury, partner and head of corporate finance at Newcastle-based Ryecroft Glenton Corporate Finance, said companies need to “consider the question of medium-term strategy… to take advantage once the green shoots of recovery start to appear”.

Speaking in a webinar hosted by recruitment agency Nigel Wright Group, he said many clients have been extremely busy dealing with immediate priorities, such as introducing new structures like remote working.

He also said they are accessing Government financial support to prepare for a period of softened performance.

“It is a very uneasy period, but any market creates opportunity and businesses must be in a position to react when positivity returns,” said Carl.

“During the first three or four weeks of lockdown, the focus was on businesses finding a way through this period of under-performance and uncertainty.

“However, they must now consider the question of medium-term strategy, along with the growth capital required, so they can take advantage once the green shoots of recovery start to appear.”

Carl also acknowledged one of the major challenges is the ability for businesses to accurately forecast the coming three to six months.

“Our advice is prudence,” he said.

“Be cautious with financial forecasting rather than assuming normal business will resume in the short-term, thus enabling you secure the amount of funding you need to trade through the pandemic.

“Ryecroft Glenton is well-placed to help businesses prepare the financial forecasts needed to secure loans available via the Coronavirus Business Interruption Loan Scheme (CIBILS) and, as a result of our strategic collaboration with RTC North, we are able to reduce the cost of us providing this advice to our clients.

“For example, the preparation of a financial forecast by Ryecroft Glenton, to aid with an application for a CBIL, which may cost £3000, would attract a 40 per cent subsidy from the Scaleup North East programme, reducing the cost to our client by £1200.”

Richard Morgan, associate director of finance and HR at Nigel Wright Group, who chaired the webinar, added: “Businesses have been through several phases over the last six weeks from initial crisis management, reshaping overheads, securing short-term funding and now they are entering the recovery and look forward planning phase.”

Carl said that to access the Government’s CBILS, businesses must demonstrate they are commercially viable and profitable with an ability to repay the interruption loans in the short to medium-term.

He added that while the application process for loans of less than £250,000 is improving and becoming more-straightforward, the difficulty lies with loans in excess of this amount – as banks need to take a more stringent approach when assessing these applications for many reasons, including business complexity, along with the fact the Government only underwrites 80 per cent of those loans greater than £250,000.

Carl added: “While there are a number of Government schemes that support working capital, such as CBILS, it is vital businesses assess what level of growth and development capital they need.

“This pandemic provides all businesses with the opportunity to reassess its current strategy and to ensure that it is fit for purpose moving forward.

“This might include changing current business models, diversifying from a product or service proposition perspective or pivoting towards more insulated sectors or clients, which can be achieved organically or indeed by making a strategic acquisition.

Carl continued: “This can be funded in many ways, including by accessing private equity investment, debt from a clearing bank or debt fund, or by leveraging the target company’s assets.

“This is about encouraging businesses to focus on the medium to long-term by securing the growth and development capital needed now to be deployed once COVID-19 is behind us.

Webinar participant Chris Blaxall, of NBS, said: “There is a future out there and we now have to look to that future and look at the strategic options for business to operate in a very changing world, which will see digital play a much greater role.”

Carl added one lesson learnt from the current situation was the need for businesses to communicate promptly and effectively – with both customers, employees and their supply chains.

He said: “It’s important to have proactive conversations before a problem becomes a problem.

“That might involve understanding a supplier’s predicament and agreeing sensible payment plans that work for all involved.

“One thing this pandemic has done has been to encourage the need for early and proactive communication and for leaders to lead.”

He added it is also important for business leaders to be aware of their mental wellbeing, especially when many work in isolation, and advised of the benefits of joining online peer group meetings or engaging with a business coach or mentor to gain an independent perspective.

The webinar included 25 business leaders and chief finance officers from across the region, such as e-Quality Learning’s Michael Hall, Donna Wilson, of TaperedPlus, and Mike Conn, of Atlas Cloud.