Summary
• Pontrilas Group secured an £8.3m refinancing package from Lloyds TSB this year.
• Banks are looking for businesses with a clear strategic direction.
• Prudent management of costs and working capital impresses banks.
• Companies looking to the future should take advantage of opportunities available now.

There has been much talk in the media about the chancellor urging the big banks to lend more money to the business community. As a result, many in the timber trade are asking how they can get access to finance.

For all the talk of green shoots, there is no doubt that many businesses in the industry and right across Britain still face some turbulent times. But banks are willing to write cheques in tough times as well as good, and there are still opportunities for ambitious, well-run firms.

One such company is Herefordshire-based Pontrilas Group Ltd, which secured an £8.3m refinancing package from Lloyds TSB earlier this year to enable the company to continue investing in its two trading subsidiaries, Pontrilas Timber & Builders Merchants Ltd and Pontrilas Group Packaging Ltd.

Established in 1947, Pontrilas Group is a £26m-turnover, third-generation, family-run business that provides timber and timber-based products to a wide range of industries, including construction for new build projects, repair and renovation, as well as the manufacturing and distribution sectors.

Pontrilas Timber & Builders Merchants operates from a 24-acre site in Pontrilas, near Hereford and distributes timber beams, fencing and decking, while Pontrilas Group Packaging, based in Llanelli in Wales, manufactures timber-based packing products.

Ongoing plans

In order to support its ongoing plans, Lloyds TSB Corporate Markets provided Pontrilas with £1.8m of facilities and worked alongside its asset-based lending division, Lloyds TSB Commercial Finance, which provided a £6.5m funding package.

As a result of the new funding, the company expects to expand, develop new markets and continue to invest in the renovation sector, which is now worth around £4bn and represents almost half of the total building work carried out in the UK.

So how can your business secure the funding and support it needs to stay successful in these challenging times? Drawing on our experience of working with companies in the industry, here is some straightforward practical advice that can help your business.

Practical advice

Firstly, banks are looking for well-run businesses with a clear strategic direction. Before committing to lending, banks want to take time to get to know the management team and develop a real understanding of what you are trying to achieve and how you intend to get there. As a result, they can offer the best financial package.

Secondly, both bank and business need to develop and maintain a close working relationship. It may sound simple, but it is essential that companies communicate with their banks regularly and this becomes even more important in challenging times. It is necessary for banks to understand the important issues and challenges their customers face, so that they can support businesses as trusted advisers.

Thirdly, firms that can demonstrate a prudent management of costs and working capital are likely to succeed. As well as knowing that companies have a good understanding of their working capital position and cost structure, banks are keen to see that management teams are able to take considered but decisive action.

Finally, the attitude and skills of the management are all-important. Management teams should have a breadth and depth of experience with clearly defined responsibilities, including non-executive directors challenging the board’s decisions. What’s more, good leaders learn from their experiences. It’s no surprise that those companies led by management teams who have survived previous downturns are the best prepared for these current times. These are also likely to be the people and businesses who will eventually lead the UK out of the current recession.

Future growth

There will come a point when people will start looking to the recovery and it will be the companies taking advantage of the opportunities available now and positioning themselves for future growth that will perform well in the future. Around 60% of the companies that emerge as leaders from a recession are not the leaders going into it.

Companies need to be clear about what they want to achieve and have a solid business plan in place, setting out how they are going to get there. Firms need to consider their own strengths and weaknesses, predict likely obstacles and the resources needed: all of which your bank can help you do.

Great relationships are the basis on which successful businesses are built, and the one with your bank is no different. We want to help our customers in the timber trade thrive, not just survive, in every economic climate; after all, the long-term success of our business depends on yours too.