Business growth opportunities still remain despite economic challenges: Steve Lyon

A seismic shift in where and how people want to work, coupled with a rise in energy prices and the cost of raw materials, further compacted by supply chain delays, has forced many businesses to completely rethink their structure, goals and objectives.

We’ve also seen caution from banks throughout this economic uncertainty. There are opportunities for growth and diversification, but if businesses can’t access the funds to enable this, then unfortunately they cannot capitalise.

Over the last few years many businesses have borrowed cheap money through Government-backed Covid schemes and some now find themselves over-geared and under pressure from rising interest rates. In this context, finding the right equity partner to invest their resources can be a saving grace.

There are other challenges at play. We have seen pressures in the hiring of the right personnel, with a lack of quality candidates equipped the correct skillsets. This lack of supply has pushed staffing costs up which in turn negatively affects cash in the business. Supply chains have improved from where they were, in and around Covid, but the increasing amount of insolvencies now being seen is affecting companies who are having to search for new suppliers.

One might assume in times such as these that it’s a case of survival of the fittest. In my experience however, the challenges tend to bring out the best in businesses of all shapes and sizes, and at various stages of their journey.

Take our clients at UKSE. We provide loan and equity finance of up to £1.5m to existing companies which are growing and creating jobs. Their target markets are wide-ranging, their products and services are wildly varied, and their future ambitions are always unique, but they all have one thing in common – the desire to thrive, rather than just survive.

Offering patient capital without penalty clauses, alongside competitive terms, UKSE has opened the door for many businesses to hit future ambitions without the pressure imposed by debt finance alone.

UKSE has historically made investments to MBO/MBI’s, where the management team can see growth opportunities, allowing current owners to exit.

With younger companies who have expansion plans, we carefully consider their forecasted figures where required, as we understand that the current year’s performance might not relate to where they are going to be. Just because a bank has no lending appetite, it doesn’t mean that no one will consider your aspirations.

Looking to the future, we expect to see an increased focus on sustainability, social conscience, working from home/office balance, a partnership approach to funding, and increased flexibility.

UKSE has also moved to support the more eco conscious companies, or companies looking to improve in this area. Depending on their impact, we will discount our terms on both equity and debt packages.

UKSE will continue to support businesses in former steel areas with investments, loans and premises.

Steve Lyon is an Area Manager at UKSE