“The One Where The Chicken Didn’t Cross The Road”


Even by my own low standards, this may be taking mixing metaphors and analogies a little too far – ‘Friends’ episode titles, fast food and chronic issues in UK supply chains. But given the high profile examples in the last week, it seemed to hit the spot.

Nando's announced that it had been forced to shut 40 restaurants (10% of it's chain in the UK) last week due to staff shortages at food processing suppliers - hot on the heels of KFC UK reducing its menu the previous week due to supply delays.

The UK supply chain landscape is suffering some chronic issues:

·       Staff shortages widespread in food processing, retailers and hospitality

·       A shortage of drivers in logistics, and container freight costs at record levels

·       Covid isolation issues still not out of the economy after further easing of rules last week

I have talked to a client this week who had a short notice and urgent order in from a client, and needed to source the product from Holland. He was quoted 4 weeks in shared haulage – or a dedicated lorry that week at 5 times the standard haulage costs. How do you rate his chances of maintaining any margin in the deal in the required timeframe?

If the major firms are restricting trading operations, imagine the effect these issues are having on SMEs broadly in the UK and the drain on their cash flow from long delays and far higher costs.

We help UK businesses fund their supply chain from within the UK and overseas with Supply Chain Finance and Trade Finance, and wanted to lay out how broadly it can help business in a variety of sectors in the UK economy – especially at the moment.

How can Supply Chain Finance and Trade Finance help you?

Let’s lose the common misconception first – Supply Chain and Trade Finance can be for stock, materials or goods sourced within the UK, as much as it can be used the purchase of raw materials and finished goods or parts internationally.

Trading with suppliers or manufacturers can begin with either an order from a client that you have to fulfil, or having to ‘stock up’ on the goods that you sell because your customers will expect a quick delivery after they make a purchase.

Depending on the nature of their business, companies either buy raw materials that they manufacture or assemble to create finished and saleable goods, or they will purchase ‘finished goods’ from a manufacturer or supplier – packaged and ready for delivery to their customers.

How can the finance be used?

Supply Chain and Trade Finance can be used to fit a wide range of business types:

·       Purchase raw materials or finished goods

·       Trade can be with UK based companies as well as overseas

·       Commonly finance companies are also experts in FX

·       Goods can be pre-sold, or to provide a stock for sale

Your business can improve prices and terms from having the backing of a trade facility and being able to pay earlier; Supply Chain or Trade Finance facilities can be flexible to accommodate deposits if required on order, and other costs including import VAT and freight / haulage if these are applicable to you.

Is the cost of taking finance justified for your business?

In the current environment companies need to conserve cash within the business as working capital can become strained without much notice.

Funding the purchase of goods or materials that are either pre-sold or to provide you with stock leaves crucial cash in the business to cover overheads and unexpected cash calls on the company.

This is especially true when supplementary costs like transport or freight may now be a multiple of what you had first budgeted for when pricing the project or order.

A common objection to arranging finance is the cost of the facility and funding these transactions; beyond the fact that lenders that we work with offer extremely competitive rates on their facilities, I would suggest that these are a great example of the ends justifying the costs of the means.

The cost of funding will slightly reduce your margin on the transaction – but with very little effect on working capital, and consequently you are still able to meet other demands that you face – as well as to fulfil any opportunities that are presented to you.


If you buy materials or goods in the UK or from overseas, don’t let that be the reason you cannot accept new business or orders, or take up any new opportunities.

Why not get in touch and discuss how we can support you with suitable Supply Chain or Trade Finance options?

How do you want to be supplied?

Mark Grant, August 2021.

info@fiduciacommercialsolutions.co.uk  / 01636 614 014

Are You Considering Buying A Company? We Look At Asset Based Lending To Fund Your Acquisition.


If you are looking at the acquisition of another business (MBO), or the purchase of the business that you already manage from its current owners (MBI), then top of your agenda will be your ability to fund the deal.

We are not all fortunate enough to be considering the acquisition of a FTSE 100 company – so the headlines about “all cash” or “cash and share deal” transactions do not apply to the vast majority of companies changing hands in the UK.

There may be an element of cash involved, either that is on the balance sheet of a company involved, or from new or incumbent directors in the business.

But as you look beyond cash for your source of funding, is a term loan the best solution or even viable? We’d suggest that you could do well to look at the assets of the acquisition company, or your existing company if an MBO, to source a suitable solution.

What is ABL?

Asset Based Lending (ABL) is exactly what is says on the tin – lending that is based on the assets of a business. This includes:

  •       Property and Land
  •       Stock
  •       Assets (such as machinery or vehicles)
  •       Sales Ledger (Debtors Book)

By using ABL to raise all or some of the required capital for your acquisition, the result is a bespoke finance solution based on the business and not a ‘one size fits all’ off the shelf solution.

ABL leverages the assets that one or more businesses involved already have, but may not already be using to generate capital yet – so they are potentially more efficient and cost effective than seeking unrelated and unsecured finance separately.

Property and Land

A company can own a variety of different property types or land, with or without planning permission. Where the business has headroom in the equity of this property or land, they can release capital towards the acquisition that they are considering with a secured loan.

For example:

A manufacturing business has a property worth £1m on its balance sheet that you are looking to acquire, with an outstanding commercial owner occupier mortgage of £300k.

Subject to credit assessment of the trading performance of the business, you may be able to look to raise up to 40% of the property value, or £400k, through refinancing the property, making a significant contribution towards your business acquisition.


A type of funding that will commonly be looked at alongside another facility, such as Invoice Finance, but where viable and relevant it can again help to release some capital in stock that is currently just ‘sitting there’ where the business commonly holds it.

Typically Stock Funding will release 15% - 20% of the value of stock levels, where the business demonstrates that it holds a fairly consistent level taking both sales and supply into account.

Assets (such as machinery or vehicles)

In simple terms, your company may own assets that are either unencumbered or partially financed. Lenders will commonly lend up to 70% of their current value less any outstanding finance.

On its own unlikely to be funding the complete business acquisition, but like Stock Funding you could get a valuable contribution from Asset Refinance towards the required total funding that you have.

Sales Ledger (Debtors Book)

You can help to fund the acquisition of the business by either leveraging the outstanding invoices of your existing business (your debtors book), or those of the target company in your acquisition.

The debtors’ book is an asset of a business, and when unencumbered it has the potential to release vital capital towards the transaction that you are looking to achieve.

This funding is then repaid through the natural flow of turnover through the business, and not via fixed loan payments every month no matter what turnover the business is doing – which could add a lot of value in the aftermath of your acquisition?

Packaging an ABL solution for your business acquisition

The beauty of using ABL funding is that is like a corporate tool box – or a funding “pick ‘n mix” almost. You literally just pick up and use the elements that are suitable and add value to your transaction.

To that end the funding does not have to be sourced all from one lender – and the ability to piece it together from more than one funding source can help you to achieve improved terms and rates – and ultimately the most suitable outcome to fund your acquisition.

We have experience of using multiple providers over a single lender for clients, and combining ABL where necessary with further funding facilities such as Term Loans and Trade Finance to complete the required acquisition finance package.


We work with clients to understand the acquisition requirement, and the underlying business/es involved in the transaction.

We do all the legwork to source suitable solutions to help the client achieve their required outcome.

How do you want to fund your business acquisition?

Mark Grant, August 2021.

info@fiduciacommercialsolutions.co.uk  / 01636 614 014

Fiducia's Commercial View - The Podcast - August 2021


Fiducia's Commercial View - The Podcast - August 2021

We have seen increasing demand for, and activity in, a diverse range of Commercial Finance products this month.

We felt that these HOT funding areas were worthy of our attention in August's edition of Fiducia's Commercial View Podcast:

Owner-Occupier Commercial Mortgages - With trading businesses increasingly back in action and planning for the future we have seen strong demand to fund the roof over their own company.

Commercial View with Allica Bank - We ask our panel lender about the reaction to their Commercial Mortgage rate promotion, and what it has told them about SMEs' outlook.

"It Ain't Heavy, It's Just Refurb.." - With the residential property market remaining RED HOT, we weigh up all the options to add capital value to investment properties.

Recovery Loan Scheme - An Update - 4 months into the scheme we ask if it is helping UK businesses, and whether you know all the ways in which clients can access it.

We look forward to the opportunity to find suitable solutions to your requirements in the coming month.

Mark Grant, August 2021.

info@fiduciacommercialsolutions.co.uk / 01636 614014