Timing is crucial for investing in growth

As we enter another crucial stage in the economic recovery, many businesses are facing a common problem – the peril of growing too quickly.

In an upturn a company may secure a significant uplift in orders, but the danger is they lack the required investment to fund the working capital.

Many companies in this situation are left high and dry, as they struggle to raise the finance required to recruit and train new staff, buy raw materials, or invest in new machinery and facilities.

Take a successful trading business; let’s say a specialist contracting business. It wins an order from a major customer, but to fulfill the contract it needs a piece of specialist plant and five new staff.

This requires a significant cash outlay that could leave the business short of reserves. It’s where a strong relationship with a funding provider, where the company can call on a flexible range of solutions, comes into its own.

As a proactive measure to help companies take advantage of quality growth opportunities, Yorkshire Bank has launched its ‘Investing for Growth’ initiative.

This latest initiative follows the bank’s October pledge to advance up to £10 billion of new lending to business and mortgage customers in the UK over the next two years.

Investing for Growth offers a dedicated planning service and a flexible approach to investment finance, including payment holidays and interest only loan periods. Our aim is to help support business cashflow, while easing debt commitments.

Both new and existing business customers can take advantage of Investing for Growth. The business planning and customer support package includes:

• Switching loan repayments to ‘interest only’ for an agreed period rather than ‘capital and interest’ payments
• Lengthening the term of a loan over a longer time period to reduce payments
• Offering a ‘payment holiday’ to allow funds for debt servicing to be redirected to investing into the business
• Fixed-rate business investment loan deals

As part of the initiative, we are helping new customers switch banking provider by offering support including, for example, legal or advisory costs.

Following every recession, there comes a point when businesses feel confident enough to start investing again.

The challenge for trading businesses is to identify when this point is and what to do about it. As customer confidence increases, we will be there to support and help develop their business growth plans.

Sean Williams
Managing partner
Yorkshire Bank Preston, Lancaster and Fylde Coast