Cratus were contacted by Charles Sandham, Chairman of August International Limited. He told us that his company was securing a major contract for their bespoke televisions for the forthcoming London Olympics and he was looking to increase stock levels to support the growing demand in Europe for their products.
To fund the additional one-off manufacturing costs this would need a short term increase in working capital. After five years of progressively increasing turnover and profits the company had not, as yet, needed finance outside its shareholders. They approached their bank for the first time and asked for a loan to cover the working capital needs of meeting this order.
They were informed that they needed to match the amount asked by the same amount from the shareholders and offer directors security for the bank loan. Our client was rightly beside himself at this ridiculous offer. If he and his shareholders had the cash required available, why would they have asked the bank and after 5 years of trading and a profitable track record, why should they provide directors guarantees for a short term loan?
The reality was that the high street bank had indeed made an offer to this small business, as required under the Merlin Agreement with the Government, but the terms required made sure that the offer was completely unacceptable.
We suggested that our client write to the Member of Parliament who represents the constituency where his business is based. It turned out that Mark Prisk was not only their MP but also Minister of State for Small Business in BIS.
Supporting August International Cratus helped craft a letter to Mr. Prisk that demonstrated that here was not just an injustice to be examined but an opportunity for the Minister. Our clients was giving him a perfect case study that demonstrated the realities for small businesses in the United Kingdom securing bank finance. The final letter was sent to the Minister by our client, we then followed up by forwarding the letter to the Minister’s office in the Department of Business, Innovation & Skills.
Our client was quickly invited to meet Mark Prisk, MP and soon after their meeting a letter was dispatched to the well-known high street bank.Our client has since been offered the required finance on terms acceptable to them and they are on target to deliver their special order on time.
Cratus support a wide range of clients in securing political support. On this occasion our role was to listen to the problem and then guide our client in whom and how to communicate the issues. Ranting letters of complaint make many of us feel better but Politicians need clear focused arguments that give them the platform to support those who need it most. We were delighted to help and thrilled with the speed of reaction by the Minister.
Kevin Davis said “Understanding the politics is our life blood, Charles is not alone and we would be happy to hear from others who are desperate to secure support for their companies. The politicians are there to help and keen to do so when they have the facts presented in a way that they need.”
Footnote: Christmas 2011, August International Limited recorded a 40% increase in sales, helped by increased stock levels!