In today's complex macroeconomic climate, businesses face a multitude of challenges when it comes to securing the necessary financial resources for their businesses. Amid economic uncertainties, evolving lending practices, and a wide range of financing options, it's no wonder that many founders are turning to commercial finance brokers for assistance.
Possessing the expertise, market knowledge, and industry connections needed to navigate the intricacies of the current financial landscape, commercial finance brokers can dramatically reduce time and effort taken to raise funding while also increasing the likelihood of securing capital.
We recently sat down with Dynamic Funding’s Director and longstanding friend of Uncapped, Alex Kourti, to dig a little deeper into the role of commercial finance brokers and the integral role they play in securing businesses vital funding needed to grow.
Thanks for taking the time to talk to us, Alex. Firstly, who are Dynamic Funding and what is it that you guys do?
At Dynamic funding, we work with UK SMEs, helping them secure innovative funding solutions to help manage cashflow, and grow. Typically, funding is raised in the form of unsecured loans, credit lines, revenue based loans, as well as invoice and supply chain finance. We have a panel of 100+ lenders ranging from banks, fintech lenders and private funds and we use our relationship with these organisations to secure our clients the most innovative and competitive funding solutions in the marketplace.
Amazing and vital in this climate. But what are the main reasons a business would use a broker when sourcing funding?
Commercial finance brokers have very specific experience in raising funding for companies, as this is their core business practice and I tend to split the reasons for using a broker into 3 main buckets:
- Experience: a broker will often think of new solutions and different ways of structuring a debt facility that the business owner may not have previously thought of.
- Network: brokers will usually have a good relationship with contacts within their lending panel, and can use these relationships to the advantage of their clients thereby sometimes increasing the likelihood of securing funding.
- Time/effort: a broker can take a single pack of financial information from a client and subsequently then access the whole of the market, saving the business owner many hours of administration through making numerous applications to different lenders.
Hugely valuable. But why wouldn’t a business just go straight to the funding source?
It comes down to experience. In all likelihood, Brokers have packaged thousands of applications previously, so we have gained a precise understanding of how to present information to lenders in a way that will give our clients the best chance of an approval. Essentially, applying through a broker will inevitably give a business owner a stronger chance of securing the funding they require to grow.
Additionally, brokers will nearly always have access to a wider variety of lenders than a business owner would, lowering the cost of funds through a greater choice of finance offers. It is also worth mentioning that in most cases, the funding terms offered would be exactly the same if the business applied through a broker compared to applying to a lender directly. Therefore, the business can often benefit from the broker's time, expertise and connections, without having to pay any extra fees for this service.
Love the sound of no extra fees for businesses as founders look to streamline business costs! But what are some of the other key challenges businesses are coming to you with?
A common challenge we are seeing is that businesses are struggling to access flexible solutions that help them to manage their cashflow. They want facilities that will allow them to take advantage of market opportunities and the option to draw down funds when new opportunities arise.
We have also seen business owners looking to reduce their personal guarantee exposure through refinancing existing debt facilities.
Interesting. And how are you helping your clients to overcome these challenges?
We have taken on board our clients’ comments and partnered with lenders who can offer working capital loans that allow monthly top ups and also lenders that can offer pay as you go facilities, where you only pay for what you use (no expensive service fees).
Although personal guarantees are now commonplace in the loan market, we do work with revenue based lenders who can offer funding on a completely unsecured basis. We often refinance existing borrowing to a facility with no security and the rate is often lower than what they are currently paying.
Real examples of working for your customer which is great to see. I am sure this has led to many successes over the past few years. Any particular standouts?
Over the past five years Dynamic Funding has been fortunate enough to have supported hundreds of UK SMEs and help them access close to €100m of commercial funding.
One standout has been supporting so many different types of businesses during the Covid19 pandemic, helping them not only to survive, but thrive in such a challenging period. It is great to see so many of those we provided a lifeline to during that time, go on to huge things as the pandemic started to subside.
Another thing that we are proud of is helping UK exporters access finance to increase their sales of British goods and services to growing overseas markets. It’s great to be able to fuel growth in additional ways and facilitate cross border expansion.
It’s one of the many reasons I think Dynamic Funding and Uncapped work so well together. How have you enjoyed working so closely with Uncapped?
Totally agree. It’s great to work closely with a lender who has a similar mindset, focusing on efficiency, professionalism and delivering the most innovative lending products in the market to our clients.
We have built up a close relationship over the years of working together, which has given us a strong understanding of what businesses are suited to their style of lending. Dynamic Funding have worked together with Uncapped to secure €10m+ of funding for our clients.
€10m+? How the time flies. How have your clients found the Uncapped funding process?
All funded clients have been delighted with their Uncapped facilities and I think what demonstrates that is that all of Dynamic Funding’s customers have taken additional funding after their first drawdown, which really illustrates the strength of the product.
To add to this, our clients enjoy the flexibility of the product, through having the ability to take regular top ups when required.
Beyond the amounts of capital available, our customers are also impressed with Uncapped’s speed of decision after making an application. Getting a decision in days, rather than weeks or months allows them to focus their time on running their business, rather than dealing with finance applications.
Another quality that comes highly regarded is that Uncapped funding is available without any debenture or personal guarantees.
Incredibly gratifying to hear and a huge thanks to Dynamic Funding for being such a wonderful partner. To finish this chat Alex, what final piece of advice do you have for businesses looking to access funding?
Information is key.
Businesses that cannot produce recent management accounts and provide up to date financials will struggle to get approved by the lenders that are offering the more competitive pricing in the market.
In a challenging economic environment, lenders need to be confident that they are making the right decision when lending their funds to a prospective client. They cannot make informed decisions without seeing the recent financial position of an applicant company.
Taking the time to update your accounting software and prepare the relevant information in a clear and concise format will massively increase your chances of securing the funds that you need to grow your business.
So ends our chat with Alex from Dynamic Funding providing us with insight into the benefits of working with a commercial finance broker.
Fundraising is never easy but working with experienced individuals who know the right people can make a difficult and time consuming process that bit more manageable.
So for funding peace of mind and a helping hand in achieving your fundraising goals, Uncapped and Dynamic Funding are here to help.
To find out more, get in touch with us today and let us help you take the first steps towards turning your fundraising dreams into a reality.