Waiving monthly fees, introducing new technology and opening up networks are just some of the ways one finance business is helping its SME clients, says Susan Allan, Willerby Group finance director and ACCA Council member
Businesses across the world have seen their top line come under intense pressure due to the lockdowns imposed in response to the covid-19 pandemic. In the UK, this includes SMEs who act as dealers for larger manufacturers.
The value of their inventory comprises a large portion of the value of their company. In recent years, innovative financial firms have lent against this inventory, allowing these SMEs to align their financing with their cash flows.
DF Capital is one such lender. When the impact of the pandemic became clear, DF Capital was quick to act, putting in place a package of measures to help its SME clients during these challenging times.
This package comprised financial, technological and business support measures to specifically help its existing dealer customers. The firm also recognised that speed was of the essence, announcing this package of measures before the UK lockdown came into force.
This package included immediately waiving its facility fees for the month of April as well as providing flexibility on certain other payments tied to existing credit lines, allowing them to be deferred or extended for a specified period.
At the same time, it rolled out technology solutions that would enable it to limit physical interaction between its dealers and DF Capital employees, especially around its regular stock and inventory audits. By moving from physical interactions to digital interactions, it prioritised the health of its customers and employees.
The final part of the package was opening its network up to all dealers through a platform called DF Connect. This allows dealers to market their inventory to other dealers within their industry, or to find new inventory, through a stock transfer system.
‘We are very aware of the challenges that our customers face due to the covid-19 outbreak,’ says Andy Stafferton, DF Capital’s founder and chief commercial officer. ‘We knew how important it was to act quickly to bring in these measures to support our customers as soon as we could. We have built DF Capital with the support of our manufacturer and dealer clients and are truly committed to helping them in the best way that we can.’
Taken together, the package has brought relief to many businesses, especially those whose cashflow has been tied up through unsold inventory. The package has also been recognised by the manufacturers of goods that are unsold within the dealers.
DF Capital began lending operations in March 2017 and listed in May 2019 on the London Stock Exchange’s AIM market. It supports UK SMEs, by providing working capital solutions up and down their supply chains.
In order to help these businesses, DF Capital’s products allow them to match their cash cycle to the lending term, in turn allowing their customers to release the working capital tied up in their day-to-day operations. DF Capital works across a number of industry sectors including industrial equipment, agricultural equipment, marine, transport and recreational vehicles.