Business finance is the key to recovery, growth and sustainability

It goes without saying that the last two years have been extremely challenging for the UK business community. Despite the doom and gloom, Approved Business Finance have been doing their bit to support businesses through the pandemic and now helping them rebuild as we return to normality. Their finance products have provided a vital pathway to business recovery, growth and sustainability.

Approved Business Finance (Approved) has over 40 years combined experience in the business finance industry and specialists in the scaffolding sector. They are one of the fastest growing finance brokerages in the UK and since inception in April 2019, they have facilitated over £200m of business finance and helped nearly 2,000 clients.

Q&A session with Mark Kozo, Finance Director at Approved Business

How have recent global challenges affected businesses?

The pandemic has had far reaching effects. Many businesses have had to shut their doors completely, deal with vastly reduced revenue streams, furlough employees and/or manage the other uncertainties that lockdowns have brought.

The one thing that has endured, is the sense of community within the business sector. It is this unity that will help businesses to accelerate into recovery.

Over the last 24 months Approved Business Finance have helped by distributing over £200m in much needed funding. Much of this has been through the government backed Coronavirus Business Interruption Loan Scheme (CBILS), Recovery Loan Scheme (RLS) as well as standard commercial facilities like business loans and asset/equipment finance.

How has business finance helped firms grow and create a sustainable future?

The mantra “cash is king” has never been more applicable. Cashflow is the lifeblood of all business and access to affordable, flexible finance has helped to ease cashflow pressures for many of the businesses affected. Business owners around the UK have welcomed these finance options as it allowed companies to not only recover but grow out of the pandemic and create a more sustainable future.

Many scaffolding firms have been taking advantage of the benefits that asset finance and refinance brings, with a notable increase in firms choosing to buy equipment outright rather than hire – in the process saving thousands of pounds. This saving has then been used to invest in other areas in the business including the upskilling of their current team and recruiting other specialist labour.

The pandemic has brought into focus more than ever the importance of protecting people’s mental health. We have witnessed first-hand how our clients have taken advantage of the funding options available to them to improve working conditions in many ways by; purchasing equipment to work more efficiently and tackle an influx of projects without adding more pressure onto their workforce, additional training so every individual has the knowledge to excel in their roles as well as investing in infrastructure to provide a safer working environment.

How is Approved Business Finance different to traditional finance providers?

Unlike traditional high street banks, Approved Business Finance has access to over 80 funding lines. With products including Asset Finance, Commercial Loans, Commercial Mortgages, Motor Finance and Invoice Finance, Approved Business Finance is very well placed to aid its clients through the pandemic and the subsequent recovery period. This panel approach enables us to help anyone from new starts to well established corporations.

Finally, how do you see the next few months?

We are very positive about the months ahead. With guidance ending and the success of the vaccination programme, things are starting to look up. We are ready and able to assist local businesses throughout this period, as they recover.

To find out more on how Approved Business Finance can help your business call 01908 429888, email info@approved-finance.co.uk or visit www.approved-finance.co.uk

PERI UP Scaffolding?

No written notice, no payment

“Yes, you told me verbally but, no written notice, no payment.” Is this a con(ditional precedent clause)?

“No written notice, no payment” doesn’t have the same ring to it as Paddy McGuinness’s “No likey, no lighty”, but we will attempt to draw a parallel with ITV’s ‘Take Me Out’ dating show (‘attempt’ is underlined for a reason!).

Have you ever read a clause that states something along the lines of “If a variation occurs, you are to notify the main contractor, in writing, within 2 days of becoming aware of the variation. Should you fail to notify the contractor in writing and within the period specified, you are not entitled to payment for that variation regardless of whether you proceed to carry out those works.”

This is known as a condition precedent clause, which in short means – failure by the contractor to comply with the notice provisions would prevent its right to claim

Why is this important? Because, time and time again, we are contacted about:

• non-payment of variations; or

• extensions of time being declined; or

• loss and expense being struck out, and the list goes on.

On reviewing the contract, we find the main contractor/developer has included numerous condition precedent clauses. These clauses could have been spotted during a contract review and could have been struck out, amended or worst-case scenario, at least been appropriately managed during the project. We are confident that if you open any contract on one of your live projects, you will find at least one of these clauses, if not more.

We will often ask any contractor, “did you notify in writing within the time period”, often the answer is “no, but”, which is usually followed by “the main contractor gave me a verbal instruction”, or “the main contractor already knew about the bad weather and delay” It may seem harsh, it may feel like a bit of a con, but if the contract requires you to notify within a specific time or in a specific manner, and if you fail to do so, you will lose your entitlement. We appreciate the frustration when the main contractor is fully aware of the variation or delay, but you are still obliged to comply with the contract. The takeaway point is, always read the contract and always comply with the contractual provisions or risk losing your entitlement.

Now you know, what can you do about it?

How does this all come back to Take Me Out?

To give you a head start, here are a couple of typical examples:

Payment: “Any application for payment must be sent by email to PaymentApplication@ Construction.com with the subject heading:

Urgent, Application for Payment by 5 pm on the Application Date. Should you fail to issue the application in compliance with this clause, the application will be invalid, and you will lose any entitlement to payment that month ”

Delay: “Should the contractor become aware of any delay on site, regardless of whether it is responsible for that delay, it must notify the developer, in writing, within 24 hours of becoming aware of the delay, or when it reasonably ought to have become aware of the delay. Should the contractor fail to do so, the contractor will not be entitled to any extension of time or any loss and expense for that delay ”

Condition precedence clauses usually protect the contractor/developer from having to make payment for one reason or another. In your case, this means “No Compliance, No Payment”, and if you don’t want to be in that position and don’t like the clause, do something about it!

Scaffolding contractors are seriously at risk of inadvertently agreeing to condition precedent clauses (without realising) and then failing to comply. The main contractor may value all the variations at £Nil throughout the project, only to tell you it will be addressed at the final account (very reassuring!).

On doing so, the main contractor then reminds you that you didn’t comply with the condition precedent clause. This is the reality we see and contractors are experiencing. Without wishing to be too blunt, we suspect that is kissing goodbye to any profit on the project if you don’t get paid the variations!

What can you do about condition precedent clauses?

Just remember: “S-A-M”

1. Strikeout the conditional element, i.e. within a specific time period; or

2. Amend – so that the time period is more manageable, i.e. 7 days; or

3. Manage – the risk by having the documentation ready to be issued within the time period We appreciate that you are unlikely to be able to amend these types of clauses without potentially jeopardising commercial relationships. However, we can assist you by not only reviewing the terms and conditions but also by providing you with the tools you need to put your business in the best position possible.

If you wish to discuss condition precedent clauses, contact Lawrence, Sam or Chrissie at Holmes & Hills LLP – call 01206 593933 or visit www.holmes-hills.co.uk