Addressing SMEs Concerns for their Financial Future

With 99% of businesses in the EU falling under the “small business” umbrella, it is easy to see why many consider them to be the backbone of the economy. As well as powering the economy, these businesses make important contributions to innovation, employment and accelerating economic growth.

Yet, despite their importance, banks have continued to reduce or outright deny vital funding to many SMEs – a factor that has only worsened since the 2008 financial crisis. This has left many SMEs concerned for their financial future. Largely, banks are failing to provide the funding solutions SMEs so desperately need, and even those who do manage to access financing from a bank often find that borrowing is a cumbersome, inflexible and time-consuming process which diverts their attention from their business.

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Ultimately, the current situation is unsustainable. As SMEs provide two-thirds of private sector jobs across the continent and contribute more than half of the total value created by businesses across the European Union, more needs to be done to overcome market deficiencies.

To solve this problem, there has been the emergence of alternative lenders, like Capital on Tap. Whether its term loans, credit cards or invoice factoring – more of these services are being provided by non-bank lenders like ourselves and as a result we are the increasingly popular choice among SMEs.

At Capital on Tap, we offer highly automated decision engines, transparency on pricing and excellent customer service, and unlike with bank-backed funding options, our customers receive funds in hours or days, rather than weeks or months. Additionally, as alternative lenders, we continue to innovate and work on robust technology platforms, which give businesses easier access to information and lower operating expenses. We find that once SMEs start using these alternative solutions, they tend to stick around for a long time as they prefer it to their bank.

Given the uncertainty of Brexit and other economic clouds gathering, SMEs need funding certainty now more than ever. Thanks to alternative lenders like Capital on Tap, SMEs are able to access solutions perfectly crafted for their businesses. As we look to expand into Europe, alternative solutions like ours could be just what is needed to help SMEs overcome their financial fears and provide them with a more stable future.

Getting to know our customers: Drink, Shop & Do

Drink, Shop & Do’s Story:

Coralie and Kristie began hosting a Wednesday wine and paper mache evening at their home soon after graduating from university and starting their careers. As the weeks went on it became more and more popular to the point that their living room could not accommodate for the demand. They both realised that there was a market for this and decided to host a pop-up shop in an ex-Victorian bath house based in Kings Cross. The pop-up was such a success that they never left. In fact it has been such a success that Coralie has also managed to open a members bar across the road.

What makes Drink, Shop & Do stand out?

Delicious food and a range of cocktails are not the only characteristics that make this place unique but the transformation the venue makes throughout the day. There are also a range of activities to keep you busy from Lego Robots to Play With Clay and Papier Mache Monsters. By day, Drink, Shop & Do is a mild-mannered King’s Cross café and spritz bar serving a range of teas, coffees, healthy lunches and cakes. By night it switches to a merry den of drinking and dancing, where guests can reconnect with their inner big kid.

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Our visit:

We were welcomed in by Coralie and her friendly staff who showed us to our tables and explained the rules of our challenge, the Lego Robot competition. Whilst constructing and creating stories for our robots which would have to be explained at the end of the session we drank beers and wine and snacked on a range of finger food. Coralie explained the journey of building her business to the thriving place it is today. Like many of our clients, Drink, Shop & Do has utilised the product we offer to assist this growth.

Cheers for a great afternoon; Drink, Shop & Do! Some of our staff enjoyed the atmosphere so much that we stayed much longer than we had planned to.

Find out more about Drink, Shop & Do by visiting their website: http://drinkshopdo.co.uk/

How Flexible Financing Can Drive Growth for SMEs

SMEs are the lifeblood of the European economy. According to advisory group, Interreg Europe, they represent 99% of all businesses and two-thirds of all private sector jobs in the EU, while according to the European Investment Fund’s SME Access to Finance Index: “together, SMEs produce more than half of value added in the EU.”

That is why the success of SMEs is so crucial to the overall health of the European business landscape. Yet, far too often lack of easy access to finance threatens their prospects. Starved of the flexible funding they require, many small businesses struggle to survive, while others find growth opportunities severely restricted.

At Capital on Tap, we have seen at first hand the challenges UK SMEs face. There is often a sense that retail banks don’t speak their language or prioritise their needs. These banks certainly struggle to come up with finance offers that really work for SMEs, mainly because it is hard for them to make the economics work for a small loan.

“We continue to see small businesses being underserved by retail banks and we are trying to solve that issue not only in the UK but now also across the rest of Europe.”

That’s where we believe we can step into the breach. Our automated technology platform can run with minimal costs, meaning that we are able to provide start-up enterprises with loans of as little as £25,000 – and, critically too, we put SMEs front and centre of our whole approach.

The online application process is straightforward, with 97% of customers getting an instant credit decision. SME customers pay no interest on card purchases if they pay off their balance in full every month. Otherwise, they only pay interest on the funds they use. As well as having no monthly or annual fees, they also benefit from having no ATM charges or foreign transaction (FX) fees to worry about.

Since launch, we have provided £500 million worth of funding to 40,000 businesses across the UK. That’s why, while continuing to focus on the UK, we are now looking to also branch out into the wider European marketplace.

“Businesses have loved that our platform was simple and easy, and demand has matched what we have seen so far in the UK.”

It’s clear that SMEs across Europe face many of the same concerns that they do in the UK but generally there are even fewer funding options for smaller businesses in other European countries than there are in the UK.

We have tested our platform in five different European countries already – and have had an incredible response in each. Businesses have loved that our platform was simple and easy, and demand has matched what we have seen so far in the UK. It’s a positive sign.

We continue to see small businesses being underserved by retail banks and we are trying to solve that issue not only in the UK but now also across the rest of Europe. Flexible funding really can provide the answer here. Simply: businesses can go from having no options to having a fantastic option for growth.

– David Luck, CEO, Capital on Tap

Getting to know our customers: BrewByNumbers

Tom Hutchings (co-founder of Brew By Numbers) recently welcomed the Capital on Tap team to their brewery for a tour (and a few drinks!). Here’s what happened…

Brew By Numbers’ story:

The business was founded in February 2012 after Tom Hutchings and Dave Seymour met whilst on a climbing tour of S.E Asia. Since its establishment the business has grown rapidly from starting in a basement Tom rented off a friend’s near Borough Market and has since moved to its current home in Bermondsey’s Rail Bridge Arches. What started as one experimental brew has now evolved into 310 varieties and counting!

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What makes Brew By Numbers stand out?

Using a numbering system is what differentiates the business from their competitors; each beer is identified by a unique four digit number. The first two digits denote the style of the beer and the last two denote the recipe. In addition to this, Dave and Tom’s passion is the force behind BBNo’s mission; to only release beers that are of high standard, balanced and drinkable.

Our visit:

Tom explained to us how he and Dave have grown their dream and gave us an overview of the plant from the brewing process to packaging and storage. He also explained how the facility we offer has been useful in aiding this growth. Many small businesses find themselves short of cash flow in the window between paying suppliers and being paid by clients. Capital on Tap’s revolving credit facility aims to seamlessly fill this gap. We ended the afternoon tasting three of the different brews paired with locally sourced cheese, meats and bread. Cheers Tom!

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Find out more about Brew By Numbers by visiting their website: http://www.brewbynumbers.com/

Fix your business’ credit control today

Help small businesses thrive. That’s our mantra here at Capital on Tap, and it’s driven our offering since day one. We were recently chatting to our friends at Chaser, the cloud credit control software, about 6 options you have when your business needs an urgent cash flow boost. They ended up giving us some fantastic insight into the mistakes many small businesses make with their credit control function, inhibiting their cash flow. As cash flow is the lifeblood of a business, we asked them how small businesses can most effectively combat these mistakes and establish a world-class credit control function.

Here are the 3 things your business needs to do today to fix its credit control function and get invoices paid on time.

1. Knowledge is power. Arm yourself.

If your business sells on payment terms, one of the biggest mistakes you can make is assuming each of your customers operates the same way. Avoid setting yourself up for excuses and late payments by asking these 4 questions every time you supply a new customer:

  • What information do you need to make payment? (Although your invoice should already include the following: payment details, accepted payment methods, payment terms, invoice date, your VAT or sales tax number, and the correct description and cost of the goods/services)
  • Does this purchase require you to approve a purchase order? (And if so, when will it be approved? Plus don’t forget to include the PO number on the invoice)
  • Who is responsible for making payment on this invoice? (And how do I contact them?)
  • When do you make your payment runs?

Armed with this information, you won’t be blindsided by your customer with excuses about not following procedure. They’ll be forced to justify the unjustifiable – why they haven’t paid you on time when you’ve done everything correctly.

2. Polite persistence pays. Chase consistently.

“Polite persistence pays” is a motto of Chaser’s, and it’s an incredibly effective philosophy to follow when conducting credit control. Chaser have seen that almost 80% of invoices can be collected on time through email chasing alone. Here’s what you need to be doing to maximise your effectiveness of email chasing.

Every email chaser you send needs the following information to be effective:

  • Your business name
  • Invoice reference number
  • Amount owed on the invoice
  • Payment due date
  • Number of overdue days (if invoice is overdue)
  • And always attach a copy invoice

In providing this info, you eliminate any chance of the customer using the excuse that you haven’t provided enough info for them to make payment.

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It’s important, however, that your email chasers always remain polite and are sent often enough to keep you front of mind in your customer, but without harassing them. To achieve this, a good rule of thumb is never chase more than once a week or less than once a fortnight. Armed with the knowledge you acquired earlier, send your chasers to the person responsible for making payment on the invoice, and consider timing these chasers with when the customer makes their payment runs for maximum chance of getting paid quickly.

While email is a very effective medium for chasing up unpaid invoices, don’t forget the phone. Especially if your customer is slow to respond or sends vague and unclear replies. A rule of thumb from the Chaser team is to make a call after every third email chaser.

And finally, once payment is received on the invoice, whether it was on time or not, always thank your customer for paying. You’ll positively enhance the relationship with your customer and help encourage timely payment in future. Just a quick one-sentence email is enough, but make sure you do it within the 24 hours after receiving payment for maximum effect.

3. Maintain your invoice communications history neatly.

While the above advice can work wonders on the efficacy of your credit control function, it can be undermined by the lack of a single source of truth. Without consolidated and well-maintained invoice communications histories, a world-class credit control function crumbles. Scrambling through sent emails, multiple inboxes, or notes scrawled on the back of an envelope are all unnecessary risks and time-wasters from the credit control of the past. If your business still manages its credit control function this way, it could easily be racking up hours wasted every week. Not to mention operating with the unnecessary risk of missing key info when it isn’t consolidated into one location.

Whenever you’re conducting credit control with an incomplete picture of the situation, you’re inviting your customers to delay payment. You also risk damaging your business’ reputation by providing conflicting info, having to backtrack on something you mistakenly said earlier, or simply creating the image of a “pushover” company.

Keep a centralised log of all chasers sent, replies received, phone calls taken, and notes made. Make sure it is easily navigated and searchable by customer, invoice, and date. This will not only save your business a world of time, it will empower you to deliver world-class credit control and get your invoices paid on time.

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Chaser is cloud credit control software to get your invoices paid on time, in less time. Their average customer saves 7.3 hours a week on credit control, and boosts their cash flow by £4,400 per £100,000 of turnover. Check out how their product can help your business today.

Capital on Tap Secures £140 Million in Funding

London, UK 13 August 2018 – Capital on Tap, one of the UK’s fastest growing companies, has secured a total of £140 million in additional funding in the form of £90 million in debt funding from London-based investment houses, M&G Investments and Triple Point Investment Management LLP; and a further £50 million debt line from international bank, Citi and private equity and credit fund manager Pollen Street Capital, through P2P Global Investments PLC a quoted investment trust that Pollen Street Capital manages.  Capital on Tap is not publicly disclosing its valuation, but it has raised £30 million of equity and £200 million of debt to date.

“We continue to see small businesses being underserved by retail banks, and we are trying to solve that issue.” – David Luck, CEO of Capital on Tap

Since its launch in 2012, Capital on Tap has competed with the offering of major banks, by offering small businesses a faster and more transparent way to fund their business. Capital on Tap has already provided over £500 million in funding to more than 40,000 small businesses across the UK. It plans to use the additional financing it has received to accelerate growth in the UK, enabling it to serve more small businesses. “We continue to see small businesses being underserved by retail banks, and we are trying to solve that issue. At Capital on Tap we support thousands of small businesses by giving them up to £50,000 in minutes,” says David Luck CEO of Capital on Tap.

This additional funding represents another important step in the ongoing growth story of Capital on Tap. Capital on Tap was featured on the Sunday Time Tech Track 100 for 2017, cataloguing the 100 fastest growing companies in the UK.

Alan Hart, On Tap’s CFO, said: “Our funding facilities are specifically designed to help small businesses that have been in our view underserved high street banks. These funding facilities build upon existing relationships with great funding partners and bring new partners into the fold.”

James Pearce, head of direct lending, M&G Investments, commented: “Small businesses across the country are the lifeblood of our economy. It is essential for businesses of all sizes to have access to credit facilities in a timely manner in order to grow and to manage cashflow. This deal brings much needed cashflow to small businesses whilst benefiting our pension fund clients.”

Neil Richards, investment manager, Triple Point Investment Management LLP, commented “As a long-standing provider of finance to the UK SME sector, Triple Point is delighted to support Capital on Tap with this increased facility. We recognise the critical part that the SME sector plays in the UK economy and as innovative operators continue to fill the gaps left by traditional funders, we have expanded our own team to identify opportunities like this one to deploy our private capital.”

Abror Ismailov, Partner at Pollen Street Capital said, “Pollen Street seeks to partner only with the most innovative businesses, who target underserved market opportunities and who show the potential to grow and to expand their market share. In Capital on Tap we see a robust business model with the potential to access underserved SMEs across Europe. We’re excited to be involved and to work with David and the Team.”

Capital on Tap was advised by EY and Norton Rose in securing its additional funding.

About Capital on Tap

Founded in 2012, Capital on Tap is on a mission to help small businesses thrive. The company believes small business owners are the foundation for growth in the economy. Capital on Tap has partnered with over 40,000 small businesses across the UK deploying funding facilities of over £500 million to customers ranging from freelance designers to pub owners to solicitors. For more information, please visit www.capitalontap.com.

About Pollen Street Capital

Pollen Street is a global, independent alternative asset investment management company focused on financial and business services, which brings together a team of highly seasoned specialists with extensive experience in the UK, US and Europe. Pollen Street works closely with entrepreneurial management teams who share our values and whose businesses have strong growth potential. Changes in the focus of large incumbent players, together with the implementation of new models that make the best use of data, analytics and technology, provide exciting opportunities for our partners to pioneer and innovate. Pollen Street has a long track record of supporting these successful models as they expand and grow.

Check out our article in the Telegraph:   https://www.telegraph.co.uk/business/2018/08/12/capital-tap-gains-140m-funding-boost-growth/

Check out our article in Forbes:   https://www.forbes.com/sites/joewalleneurope/2018/08/16/can-a-british-funding-firm-solve-financing-problems-for-european-smes/#3d01d033c65c

Capital on Tap partners with JJ Food Service

National Wholesaler JJ Food Service and Fintech expert Capital on Tap have joined forces to introduce the JJ Food Service Mastercard to all JJ Food Service customers. The exclusive card offers a revolutionising line of support to independent caterers by offering business credit terms to increase cashflow at all times.

All JJ Food Service customers are invited to apply for the card via the wholesaler’s website without impacting their credit score, and credit limits of up to £25,000 and interest-free purchases for up to 37 days are awarded within seconds to approved applicants. JJ Food Service CEO Mustafa Kiamil said, “This is a first for the UK foodservice industry – we understand how hard it can be for independent caterers to manage cashflow, and partnering with Capital on Tap enables to assist our customers even further”.

The card, easily recognisable by its sleek design and the JJ Food Service logo, not only gives eligible customers the option to buy now and pay later across the entire range of products available at JJ Food Service in store or online, but is also accepted at thousands of retailers worldwide where the Mastercard logo is displayed.

In addition, Capital on Tap offers their 5-star rated online platform so that business owners can monitor their account and easily draw funds directly to their bank account. Capital on Tap CEO David Luck explains, “We have always made it our mission to provide SMEs around the UK with quick and pain-free access to extra cashflow and better business banking. By partnering with JJ Food Service, we are now able to take our offering even further and help make a real difference for all independent caterers that trade with them”.

Check your eligibility in 2 minutes today and receive your JJ Food Service Mastercard within 4 business days:

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Social media continued: The power of video

With Facebook’s video service specifically aimed at small and medium sized businesses, the debate as to how useful social media is to companies has been reignited. Containing over 50 million business pages on its social network, Facebook is in a powerful position to influence the way in which SMEs execute their marketing strategies.

The tool allows SMEs to create a brief introductory video that will provide information about the way they do business, their back story and anything else entrepreneurs consider worthwhile. The video consists of a photo slideshow over which business owners are able to add short passages of text and select a soundtrack.

Although small businesses may not be Facebook’s primary audience, they form an important demographic that the social network would be foolish to ignore. Figures released from Facebook show that small businesses upload 1.5 million videos every month, contributing to the incredible library of videos shared on the site and from which eight billion videos are watched every day.

When it comes to deciding how useful social media marketing is to small businesses, entrepreneurs are often divided. While social media is considered a free platform for marketing, critics argue that a great deal of time is required to create a successful social media presence and that this does not always lead to good returns on investment. On the other hand, many business owners are impressed by the power of the viral video and feel that social media is too important to ignore.

Recent research compiled by AOL shows that advertising budgets for businesses are shifting away from traditional platforms, such as television and print, towards digital platforms, with an emphasis on digital video advertising. This coincides with greater use of mobile digital technology and on-demand services, both of which have forced marketing experts to reconsider their approach to video.

Though it appears SMEs are embracing digital marketing, and video in particular, it’s also important to face up to the potential problems it may cause. Many of the statistics used by organisations like Facebook can be called into question, and have been. This is largely due to the way in which the social media site automatically plays videos without forcing users to intentionally begin them – leading to figures for watched videos that may be misleading. It is also important to consider over-saturation on the advertising platform. By 2019, it will take an individual over five million years to watch the amount of video crossing global networks in a single month. With this amount of video available, how will businesses use the medium to truly stand out?

At Capital on Tap, we offer customers funding rates as low as 0.79% per month! Looking to boost your business?

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Customer success story: Special Occasion Hire

Your wedding day is something many women dream about from when they are little girls. With scrapbooks filled with pristine white dresses, sparkling diamonds and lush flower arrangements, it’s no surprise that brides know exactly what they want, and compromise isn’t always on the cards! While Bridezillas may strike terror into the hearts of many, Rosemary, founder of Special Occasion Hire, not only takes the challenge head on, but thrives on it.

From a career in fashion retail management and design, Rosemary has always had a flair for the artistic, putting together elaborate window displays in Selfridges that stop passerbys in their tracks. It was while planning her own wedding back in 2005 – a romantic affair with candles, a mint green and cream theme, and chair covers she had made herself! – that she decided to pursue a career helping others put together their perfect special day.

From your local church to the Gherkin, Rosemary now turns those childhood longings into stunning reality. And while her personal taste is towards clean and elegant lines, she’s not opposed to anything out of the ordinary (can you say gothic wedding?!). This is because for Rosemary it’s all about the personal touches and creating each bride’s vision, rather than pushing out carbon copy weddings.

Since then, Special Occasion Hire has won Event Decorator of the Year (London) at the English Wedding Awards 2016, as well as being featured in Your London Wedding four times! And her customer success speaks for itself with most of her business coming through word of mouth (she did a 1st birthday for a previous bride recently) and also their engaging and lush instagram https://www.instagram.com/specialoccasionhire/.

With business booming and Special Occasion Hire expanding into other events (birthdays, anniversary, corporate events, etc.), Rosemary got to the point where she needed cash flow and she needed it now. While exploring different options with banks she heard about Capital on Tap from her husband. She was amazed when within an hour of applying the money was in her account. Then, having the ability to log in online and leave the funds there for when she needs it, while always knowing exactly how much is available has been a real life saver.

“Things always pop up. Look at how much the prices change at flower markets. People just need some stability, life is complicated enough. Capital on Tap has given me that and made sure that I always have that cash flow.”

What’s next for Rosemary and Special Occasion Hire? With a particular passion for floor design and the desire to have her own show room, there certainly is enough to go around. Capital on Tap is looking forward to joining her on this journey!

For more information on Special Occasion Hire, visit their website: http://www.specialoccasionhire.co.uk

Become a Capital on Tap customer today, and you can join Special Occasion Hire as a CoT Customer Success Story!

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Can supply chain finance help your business?

Small and medium sized businesses often find themselves on the receiving end of late and missed payments, but are forced by their size and lack of bargaining power to meet the stipulations laid down by larger companies. This can be particularly difficult when SMEs find themselves wedged between two big businesses in the supply chain. On the one hand, they are being paid late by their client and on the other, are expected to pay their supplier on time. This causes incredible cash flow issues and can be damaging to SMEs and their future success.

What is supply chain finance?

Supply chain finance, often called supplier finance, is one solution to this issue. At a basic level, supply chain finance involves the supplier, in our case an SME, receiving payment on an approved invoice early, usually from an external institution, such as a bank. It also allows the payer to extend its payment terms, improving both organisations’ working capital positions. In many cases, once an invoice has been approved by a client, the supplier will be able to choose whether to withdraw the finance immediately or wait until the due date for payment by the client.

Legislation history

Supply chain finance used to be the domain of large businesses and multinationals and excluded SMEs from involvement. In recent years, this has changed for a number of reasons. First and foremost, the difficulties SMEs faced acquiring finance forced the government, banks and big business to re-evaluate the options available to small business. In 2012, the U.K. Government rolled out the Supply Chain Finance Initiative and attempted to give SMEs greater power in supply chains. This has contributed to large growth in the supply chain finance market over the last few years.

How could it help SMEs?

There are a number of advantages to using supply chain finance, particularly in the case of SMEs. First, the reliance on prompt payment for services rendered is reduced, giving SMEs greater breathing space and larger working capital and limiting the negative impact of late or missed payments. Due to the co-operative nature of the supply chain financing, risk in the supply chain is also greatly reduced. Additionally, it can help in situations where one of the parties holds a credit score that means it can’t receive finance as easily. By entering into a supply chain finance agreement with a larger, credit-secure business, they may be able to receive finance that would otherwise be denied.

Learn more about how our all-in-one Supplier Platform can help you!

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