Guest Post: Raising cash for your business

A quick guide for mobile entrepreneurs

by Sean Duffy md & head of technology, media and telecoms (TMT) at Barclays

Dreaming up an idea for a successful mobile start-up is often the easy part, as most people who’ve been down this path will tell you. Getting others to invest in you, even once you’re established, still requires careful preparation. Here, Barclays’ Sean Duffy provides some vital pointers on how to attract investment.

The UK’s economy is growing faster than any other country in Europe and fast growing industries like those in the mobile sector are helping to drive this.

But to maintain momentum and in order to grow, many businesses will require financial support to get them to the next level.

Any tech business owners who are wondering how to grow their business in the current economic climate, and who haven’t applied for a corporate bank loan before might find some of this guidance useful.

As your business grows, building up a relationship and track record with your bank is a good idea.

Try starting with working capital facilities, such as an overdraft, and growing these as the needs of the business evolve.

Regularly updating the bank on the progress of your business and maintaining good account conduct will help to improve the eligibility of the business, especially when looking for larger loans and more complex financing options down the line.

And if your company is showing promising signs for the future, you can be sure they will be extremely interested in the progress being made.

When you believe your business is ready for a loan, the success of an application is highly dependent on the clarity of your communications.

Getting your lender to understand you and your business objectives is absolutely essential.

So, make sure you have done enough preparation to be able to discuss every nuance of your business.

An integral element of this is being open and honest with your bank.

It’s also vital to understand the industry inside out as well as key movers and shakers.

A great indication of a company’s viability is who else in the industry is buying into it.

Have any well-known entrepreneurs backed it and has a venture capitalist invested in it?

These are important considerations for banks, so networking becomes incredibly important.

When you are ready to approach your lender, the bank will be looking for you to communicate a number of key things.

The first is that you have a well thought-out business plan in place, one that takes a short and long term view on what you want to achieve.

Management accounts should be up to date, with a good record of delivering products or services to recognisable customers.

This will help them determine what sorts of working capital requirements and liquidity needs you have.

This will be evident through your assets and cash-flow, so present this information clearly.

In turn this will impact the kind of lending terms the bank will be able to offer you.

Every case is different and the interest rates and terms of loans will depend entirely on your business’ individual circumstances.

However, you should also have a good idea of the type of finance you hope to secure.

Some businesses may prefer working capital options such as an overdraft, rather than a lump sum loan.

The bank will then work with you to assess which of its products are most suitable for your business, including asset finance, corporate lending, supplier finance and working capital.

My Barclays’ TMT team has worked with a number of successful mobile businesses that have gone from strength to strength in the past few years.

One such company is Globo, a leader in enterprise mobility management and telecom software solutions, which recently secured a €20 million loan from Barclays.

Working closely with Barclays, Globo recently acquired Notify Technologies, a mobile technology company specialising in wireless mobility solutions and services, which has helped extend Globo’s reach into the USA.

This approach worked well for Globo, but some businesses will find that other means aside from traditional lending more suitable in supporting their growth.

For example, Grapple Mobile, a mobile and tablet app development agency, has benefited from Barclays’ knowledge of the industry and proactive relationship, without the need for bank debt funding.

Its success has seen Grapple recently acquired by mobile banking tech firm Monitise, in a £39 million deal.

Following the acquisition, Grapple was able to retain its team of over 80 staff, and gave the business a bigger international reach with new opportunities in the mobile payment and wallet space.

If you’re not yet in a position to get finance from a bank, it’s still worth a conversation with them about your company’s requirements as they may be able to leverage the power of their network to connect you with the right people.

Author biog

Sean Duffy is currently managing director and head of TMT (technology, media and telecoms) at Barclays in the UK. The TMT sector is the fastest growing in the UK and access to capital and financing expertise is essential to its continued success – Sean and his team are at the centre of many of these discussions. Sean has held a number of strategic and operational roles before moving into corporate finance more than ten years ago. Sean has spent his career at blue chip companies including Barclays, Prudential and AON.

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