Greg Carter, chief executive of Growth Street
Greg Carter, chief executive of Growth Street, talks to BQ and offers an insight into how his firm can help the region’s SMEs fulfil their potential.
Midlands manufacturing is at the heart of the UK economy. It powers the engine of the West Midlands and East Midlands with economic output figures of £17.5bn and £15.9bn respectively, building on the towering presence of aerospace and automotive sectors, as well as many others. Around 323,000 people are employed in the manufacturing industry in the West Midlands and 293,000 in the East Midlands, highlighting the importance of the sector to the region as a whole.
The EEF Manufacturing Outlook Survey reported sustained momentum in manufacturing activity in the final quarter of 2017 with 34% of companies reporting an increase in output, a landmark level. Manufacturing exports are also rising, driven by a global upswing in demand and support from a cheaper pound, with dominant European Union (EU) markets accounting for 47% and 52.3% of all manufactured exports from the West and East Midlands respectively.
According to Sajid Javid, secretary of state for communities and local government and ministerial champion for the Midlands Engine, which looks to make the East and West Midlands an engine for growth for the UK economy: “The Midlands Engine already boasts over 14% of the UK’s high-growth businesses and its economy is worth more than £230bn – larger than countries like Denmark.”
There are also notable infrastructure developments in the Midlands of national and international significance, which are creating a substantial ripple effect, boosting regional supply-chains and the local economy. These include the £50bn HS2 project, as well as the extension to the Midland Metro linking the Black Country to Birmingham city centre and the Birmingham Airport runway extension.
Growth Street to inject £50m into growing Midlands businesses
The importance of the Midlands to UK industry has prompted Growth Street, an alternative finance provider for UK small and medium-sized enterprises (SMEs), to announce that it intends to deliver £50m to Midlands businesses over the next 12 months to help them drive their growth potential.
The call to arms from chief executive Greg Carter follows an important landmark for the business. Carter comments: “The Midlands is a UK manufacturing powerhouse, and we want to ensure that SMEs from Birmingham, Coventry, Wolverhampton and beyond are able to fulfil their potential with an investment boost. SMEs in the Midlands face an estimated £360m funding gap, and we are looking to contribute to closing this gap in the coming months.
“We recognise that issues that can challenge any business, such as the rising cost of materials, the continuing need to update machinery to improve productivity and trading fluctuations have the potential to create uncertainty. We founded Growth Street to give growing businesses the financial support they need to grow with confidence.
“With Brexit fast approaching, we believe that more than ever businesses need access to flexible finance, which can help mitigate risks as well as allowing fast-moving businesses to take advantage of opportunities.
“At Growth Street, we’re on a mission to not only give businesses access to finance, but to provide the tools that will help take growing manufacturers in the Midlands to the next level. This move should in turn inject significant liquidity into the local economy and could boost industry sectors and job prospects.”
The increasing use of accounting software, and secure data sharing via the cloud, allows Growth Street to better manage risk, while also simplifying administration and providing insights to businesses.
Greater Birmingham Chamber of Commerce chief executive Paul Faulkner comments: “We are delighted that Growth Street is planning to make this substantial investment in SMEs around the Midlands region over the next 12 months.
“Not only is it a further sign of business confidence across the Midlands, it reinforces the region’s status as a powerhouse for start-ups and SMEs. Initiatives like Growth Street are extremely important to provide local businesses with the tools they need to grow and flourish.”
The people behind the numbers
Carter adds: “Our focus is to create long-term relationships with ambitious businesses. We harness cutting-edge technology to facilitate a quick and seamless customer experience. At the same time, though, customers can always pick up the phone and speak to someone with financial know-how who can understand their goals.
“One thing that frustrates businesses about most lenders is that they don’t take the time to understand the business in detail. Every manufacturing business is unique, they all have particular aspects of their business model or their growth plans that a lender really needs to understand and that can only be done through personal interaction.
“It may seem slightly counter-intuitive to talk about an over-dependence on machines in this context, but we have seen a prevalence of algorithmic approaches to finance elsewhere, that have resulted in a lack of human interaction. A personal approach, access to the right people at the right time, local knowledge and a willingness to listen to and understand businesses are all critical to creating the optimal funding solutions. I am therefore delighted to welcome Richard Steele to Growth Street as our business development manager in the Midlands, who brings with him a wealth of business finance experience gained within the region.”
GrowthLine – maintaining manufacturing momentum
Steele says: “All too often, manufacturers are faced with having to compromise between the level of funding available and the flexibility of the facility. We don’t believe that this should be the case.
“In our view, no business should be paying over the odds for finance – by borrowing more than they need, for longer than they need it, paying more than they should or being pushed into full ledger invoice finance when they really don’t want or need to.
“That’s why our flagship product, GrowthLine, is used by manufacturers in a variety of scenarios, both tactically and strategically: to fund new contracts, smooth over cyclical or seasonal cash flow, make investments in new plant and stock and upskill teams as well as embarking on acquisitions and buy outs. Unsurprisingly, with this level of versatility, GrowthLine is recognised by Midlands manufacturers as a flexible, innovative funding facility.”
GrowthLine is a revolving line of credit that allows businesses to access up to £1m as and when they need it. Once a limit is agreed, customers have the flexibility to draw down funds and make repayments as often as they like, much like a conventional overdraft.
The limits themselves are based on the size of the borrowing company’s working capital assets, such as unpaid invoices and stock. This means GrowthLine limits can grow alongside the customer’s business, potentially giving owners greater confidence in being able to plan ahead. When business owners don’t need additional headroom, they can simply pay back – without ever having to pay for funds they are not using.
Steele continues: “GrowthLine is a revolving credit facility, so there are often fewer administrative requirements than invoice finance agreements. This frees up borrowing businesses to focus on what matters: their customers.
“Since we look at the entire working capital position, we are potentially able to provide manufacturers with a balanced facility that reflects the strength of the business. We have a simple process, our pricing is transparent, and we are able to complete transactions quickly and easily. Our service is designed to work for the long term.
How GrowthLine is powering success for Midlands-based manufacturers
The EEF’s Manufacturing Outlook for the fourth quarter of 2017 observed that “manufacturers have been more focused on capitalising on the improving global economic demand picture than the domestic political challenges that continue to dominate the headlines.”
Commenting on the report, Carter says: “The conclusion from the Manufacturing Outlook report mirrors our experience at Growth Street. We live in a news environment where there’s a lot of pessimism about the UK economy and manufacturing. I really believe the media consensus is a lot more pessimistic than the reality, particularly when you look at the manufacturing industry, which has been able to thrive since the UK voted to leave the EU.”
He continues: “One of the things we often find with manufacturing businesses is that they are looking to access funding to invest in plant and machinery to drive productivity improvements. I was talking to a second-generation cardboard box manufacturing business recently, which is looking to borrow a significant amount of money to improve its operations and allow it to unlock a 50% increase in turnover over the coming year. This is a business struggling to get access to the capital it needs to expand and drive productivity growth. It’s a common challenge.
“We also recognise that with regular payment obligations falling due for wages, suppliers, raw materials and energy costs, as well as plant and machinery maintenance, there are inevitable pressures on working capital for any manufacturing business.
However, as a business grows, inevitably so does the extent of the funding gap.
“A number of manufacturing businesses that joined us in 2017 have used GrowthLine to extend their capacity through investing in stock and other assets, whilst strengthening their working capital positions. Two such companies that have already secured significant competitive advantage in their respective industries through using GrowthLine are a valve manufacturer and a mobile phone recycling specialist.”
Greg Carter, chief executive of Growth Street, says: “We are delighted to support both of these fast-growing Midlands-based businesses with a flexible GrowthLine designed to resolve many of the issues they face every day, whilst enabling them to take on substantial new orders. Speed of execution often forms a key component in respect of these transactions and in both of these cases our team reacted at short notice to meet their needs and put the appropriate funding lines in place.
“We hope that these examples have provided a flavour of just some of the ways in which we are helping manufacturers in the Midlands region to grow their businesses safely and securely with facilities that are tailored with precision to match their needs.”
Carter concludes: “We’re real believers in the manufacturing industry at Growth Street, and we’re keen to encourage businesses to approach us if they need support for growth. We want Growth Street to become the first choice for Midlands manufacturing companies looking to grow.”
Growth Street Exchange Limited is registered in the UK, company number 09495712. Growth Street Exchange Limited is an Appointed Representative of Resolution Compliance Limited, which is authorised and regulated by the Financial Conduct Authority (no. 574048).
Our BQ Bulletin emails will land in your inbox at 7.30am, Monday to Friday, with a mix of the latest local business news, national news, and features to inspire you. Sign up here!
Click here to read our privacy statement