Whilst much of the short term lending market would appear to be concentrating on the ‘bridging’ part of Bridging & Commercial, Portman Finance is looking to focus on the ‘commercial’ element.

In reality, this means providing short term secured funding to cash-starved SMEs. As we regularly hear in the press the banks are not lending to SMEs and they are in desperate need of funding. That is why Portman Finance has focused on the commercial element and is hoping to fill some of the void that the banks have left.

Staffed with people that have decades of experience in banking, both clearing banks and latterly private banks, Portman Finance has the ability to look at a deal and assess it as a business opportunity rather than just looking at the security. Whilst security remains an important element of any deal, Portman tries to look beyond that. 

A case in point would be the inventor and designer of a baby product, who had spent a lot of time (as well as their own money), developing a product for the highly competitive baby market. The product had already been produced in limited numbers and sold very well. Very serious interest was being shown by major High Street retailers and, in fact, one very well known retailer was desperate to place a significant order. The developer was prevaricating as they did not have the funds to pay for manufacturing in order to fulfil the order. In the normal course of things they approached their clearing bank with whom they had had a relationship spanning 20 years. As is to be expected in this day and age, they eventually got declined and the opportunity was presented to Portman Finance by their long term financial adviser.

Portman Finance looked at the product, the order from the retailer and something considered to be just as important: the borrower. The company looked at the security that was being offered, which was a fairly highly geared property asset, and decided that they would like to lend. The lender managed to advance funds in time to get the product manufactured, shipped and into the shops in time for Christmas. 

Whilst Portman has taken a charge over the property they have also really looked at the underlying business and the personalities behind it and looked at supporting them. 

Repayment is expected as the product starts to become self funding and the cashflow generates sufficient surplus to make ad hoc capital reductions. Portman has deliberately avoided a structured repayment plan at this stage to allow the borrower to put the surplus cash back into the business – which will enable the orders to be fulfilled so the business can get up and running. 

A further example involved the lender helping a language school in central London who needed assistance through a cash drought, but had a healthy forward bookings schedule. Their bank, however, declined to assist. They are making capital reductions every week and have even redrawn funds to smooth over financial bumps in the road.

Director Stewart Barnes commented: “Whilst our loans are all less than two years and must always be secured, our emphasis remains on providing SMEs with much needed cash, focusing on the bigger picture rather than focusing purely on the security. This does not mean that we will fund any hare-brained scheme but it does mean that we are able to have a sensible conversation about people’s businesses, focus on the ‘commercial’ element of short term lending and see if we can help.”