How Shawbrook Secures SME Lending Success

Shawbrook is a specialist lender armed with diverse industry experts and a high-service, client-focused approach to lending needs for larger SMEs and mid-market firms. Banks have faced their share of challenges; from the mid-2000s credit crunch to the recent Covid-19 pandemic. While global events will continue to impact financial markets in various ways, the durability […]

The post How Shawbrook Secures SME Lending Success appeared first on Real Business.

Shawbrook is a specialist lender armed with diverse industry experts and a high-service, client-focused approach to lending needs for larger SMEs and mid-market firms.

Banks have faced their share of challenges; from the mid-2000s credit crunch to the recent Covid-19 pandemic. While global events will continue to impact financial markets in various ways, the durability of banks is vital to the success of businesses, particularly those seeking lending facilities. Here, Shawbrook, a bank which services SMEs including firms in the mid-market space, has the tools to help today’s scaling companies prosper, explains managing director of Corporate Lending, Midlands, North and Scotland, and ABL lead, Mark Parsons.

For Parsons, who has spent over twenty-five years in the banking world, “finding a bank” to work for, such as Shawbrook, which has “the experience to lend well and the capital structure to do it under its own steam and with no third parties influencing things,” has been the dream. “We’re a traditional bank with a strong deposit book,” he states. “All decisions are internal and our lending decisions have been consistent over the years.”

Shawbrook is a bank that knows who its clients are, namely larger SMEs and mid-market businesses which are “too big” for simpler lending models and “too small” for larger more corporate ones; “we want to work with that forgotten middle,” he states.

Shawbrook isn’t a “challenger bank,” but a “specialist lender,” explains Parsons. It serves “businesses with complex operating models that do not fit within low-cost delivery lending models.” As such, Shawbrook provides them with “proper relationship support from really experienced people who aren’t afraid of taking time to understand a complex situation and deliver a bespoke solution.” Forget a standardised approach, Shawbrook’s service is customer-focused and highly specialised, boasting teams of banking experts with experience across many distinct industries, always with an eye on the client’s main goals.

Its team of specialists mean Shawbrook can support with a wide range of event-driven needs, delivering funding for mergers and acquisitions, refinance, growth and ownership transitions. The team works with clients across many different sectors; from manufacturing, technology and logistics to retail, wholesale supplies and even the wealth management sector. However, a three-point mission underpins all client encounters. These are “certainty, speed and deliverability,” where the Shawbrook team are flexible enough to “make decisions quickly” and stand by them, which means clients “trust us to deliver what we say we’re going to do.”

The firm’s success to date is not down to a unique offering but rather its specific, high-quality client services. “There are many others that can do asset-based and cashflow lending, and do it well,” he admits. “However, we’ve deliberately widened our asset-based and cashflow policies to give us maximum room to structure in an innovative way to work with businesses. Then, we back that up with really strong relationship support.”

In short, Shawbrook’s “hybrid structure” enables them to offer a sophisticated level of support to the larger SME space and mid-market firms. “While one or two others in the market can do this, they tend to operate at the larger corporate scale,” he adds.

If you were in doubt about Shawbrook’s capacity to weather economic hardship, look at the health of their corporate loan lending book. “We consolidated our facilities at the end of 2019 and created corporate lending at  the start of 2020,” he confirms. Despite this coinciding with the start of the pandemic, the lending book was worth about 250 million. Today, the book on a “funds in use” basis sits at 630 million. “This is through a period where there were various risks to consider, yet we have prospered by developing products SMEs want and by delivering them well.”

In terms of ongoing market challenges, Parsons is confident that Shawbrook can navigate any tricky waters that rise their way by “sticking to the same core principles” in how they assess clients. These include “understanding the business, the policy, the management team, technical capabilities, ability to generate cash, as well as their passion for developing the business and driving it forward, and then to lend against that.”

At Shawbrook, SME finance requirements range from the simple to the more complex, Parsons gives us an example of the latter. In this case, a Stoke-based company that “worked with a normal bank for a while then wanted a solution to enable them to support an acquisition strategy.” The company in question sought to acquire several small businesses “quickly and with certainty”, so the Shawbrook team “focused on that part of it rather than just refinancing what they already had.” According to Parsons, the client commended them for understanding what their key issue was.

So that’s Shawbrook, a specialist bank that is taking each business as an individual, and offering them bespoke solutions that work and set them on the road to success…

The post How Shawbrook Secures SME Lending Success appeared first on Real Business.