New lender in for long haul as it seeks firms that need funding

Leeds-based Reward Commercial Finance has initial funds of over £10m and is on the look-out for companies that need between £50,000 and £750,000 to expand their business.

Its initial target sectors are manufacturing, engineering, print and packaging and distribution and haulage.

Reward Commercial Finance partner Andrew Ward said the new lender was looking for companies that required long-term funding.

“We will provide revolving loans which will grow as the company grows,” he said.

“We’re looking to buy into people, into businesses that want to expand and want to achieve things, but they can’t get money from traditional sources.”

Reward Commercial Finance will target the SME sector in the region and across the North of England with initial funding provided by an international investment company.

“We’re different to banks because we’re quick, we’re local and we’re very flexible about the assets we lend against,” said Mr Ward.

“We’re not a telephone number in London. We will have no sector bias and will look at each individual case.”

Reward Commercial Finance, which will open its doors for business today, is the sister company of the short-term business funder Reward Capital, which was established by Mr Ward in 2010.

He said the difference between the two funders was that Reward Capital funded businesses on a short-term basis of between a few weeks to less than 12 months.

In contrast Reward Commercial Finance will be involved with companies for many years.

Mr Ward is in talks with a number of well-known financiers in the region to boost the team.

“We’re hoping to sign up some heavy hitters, hopefully in the next few weeks,” he said.

Mr Ward has already been joined by partner Tom Flannery, who founded the Leeds base of Euro Sales Finance prior to its sale to Royal Bank of Scotland.

Mr Flannery also worked for Sheffield insolvency practitioners Wilson Field on the sale of Overfinch Bespoke Vehicles.

The new company said it would offer flexible invoice and asset- backed finance solutions to businesses that required flexible working capital funding.

It launches today with a team of five staff based at Reward’s existing Leeds offices in Wellington Street, but will aim to provide funding for businesses throughout the region.

Mr Ward launched Reward Capital in November last year, backed by the same South African investment company that will provide the funding for the new venture.

Since its launch a year ago, Reward Capital has lent more than £2m to six businesses across the North of England including cast stone product specialist Abbey Artstone in Keighley and contract flooring firm Site Form in the North West.

“We know that there is a need for a responsive, locally based and decisive asset-based lender to assist businesses with working capital and transactional cash requirements,” said Mr Ward.

“We have the funds available to do this quickly and efficiently.”

Mr Flannery said: “We have the ability to get to know businesses quickly, understand the true value of their assets and move to inject finance rapidly.

“We have the experience to really get to know businesses in a way that banks and larger lenders can’t.

“We can open up new options for businesses that have possibly failed to secure the correct funding structure in the past,” he added.

Reward Commercial Finance will provide funding of between £50,000 and £750,000, depending on the company’s needs and levels of security.

It will target companies with a turnover of between £250,000 and £10m.

“We will support local businesses in a way that will help the SMEs get back on the growth track and as a result provide important job opportunities in difficult conditions,” said Mr Flannery.

While the initial focus will be on manufacturing, engineering, print and packaging, distribution and haulage, Mr Ward said the new lender would consider working with businesses in almost any sector.

“We know that the SME market is underfunded, and there are a great many good businesses that face issues solely related to their access to working capital, and they are the type of companies we expect to work with,” he said.

SMEs predicting cut in production

Sentiment has fallen sharply among small and medium-sized manufacturers, as firms predict a decline in production, the CBI said.

In line with expectations of stagnant orders and falling stocks, manufacturers expect output to fall slightly over the coming quarter.

Lucy Armstrong, chair of the CBI’s SME Council, said: “Small and medium-sized manufacturers have seen domestic demand flat-lining in the past three months, and will be particularly disappointed by an unexpected fall in export orders.”