Sub Post Office Loan and Post Office Business Plan - all sorted!

Here at Ernest Wilsons we have been liaising with LloydsTSB’s Chesterfield Business Centre who I have to say have put together a very competitive offer of finance for a client purchasing a Sub Post Office. Interest Rate offered is 4.39% above base rate even though some of the £250,000 facility is unsecured and across 15 years. Great to see the local management team keen to lend and quick to put a workable deal together. Well done Lloyds.


A gentleman rang from London this week anxious that the Business Plan submitted to the Post Office had been rejected despite help from a financial advisor, putting his whole subpostmaster application in jeopardy ! I was glad to look at the plan and make the necessary amendments to ensure it conveyed the right information and it has been successfully resubmitted. The Post Office Business Plan is bespoke to the Post Office and not in the form of a traditional business plan, and whilst it takes some getting used to does provide the Post Office with an excellent financial overview of the viability of the application.

Should anyone require help with sourcing finance or help with the Sub Post Office application process do not hesitate to give me a ring at Ernest Wilsons on 0113 238 2900

Ernest Wilsons - good news about Lloyds TSB and the Enterprise Finance Guarantee Scheme

In my capacity at Ernest Wilsons in introducing buyers to finance providers I chatted to Lloyds TSB Commercial again today who advised that they have a real appetite to help businesses via the Enterprise Finance Guarantee Scheme. Indeed until 31 December all approved applications benefit from keen rates. Indeed one quote received today for a £100,000 EFG loan (to buy a Sub Post Office) was at 3.1% above base rate, 3.1%! That is keen in my view and no arrangement fee for a short period either (usually 1.5% of loan amount). The Scheme assists a proposed borrower who has a good proposition that meets the usual cannons of lending criteria accept there is insufficient security, in which case the Department for Business, Innovation and Skills will provide a guarantee for 75% of the unsecured loan, subject to a 2% annual guarantee fee. More to it than that, but that is a very quick overview. So don’t wait until after the Xmas holidays to approach Ernest Wilsons if you need help arranging finance to buy that business! These very attractive rates may not be available then. I have to say the Relationship Managers I deal with at Lloyds are certainly hungry to lend. Took another call from a lady needing help with buying a Sub Post Office and the application process, daunted especially by the Business Plan and Interview – no problem glad to help.

Ernest Wilsons third Seminar. Raising finance and Sub Post Office application support.

Ernest Wilsons held its third seminar on the 28th November titled “Thinking about buying your own business? – Learn How”, which was another huge success with the room bulging with delegates. The agenda included an item on “Acquiring Finance for your business purchase” which I covered along with Wendy Hallas, Relationship Manager from Lloyds TSB’s Commercial Business Centre in Huddersfield. I think it opened a number of the delegates eyes as to what is possible and what is not in the current market place when it comes to raising finance to buy a business, with a few readjusting their purchase price parameters. Banks are lending money but they have to be approached with the right proposition, the right information and in the right way. This is what keeps me busy at Ernest Wilsons helping people day in and day out, without charge, to source finance to buy the business they have decided is for them – and I love it!


I have also been busy this week helping a number of individuals apply for the position of subpostmaster having agreed to buy a Sub Post Office from a client of Ernest Wilsons or indeed another Business Transfer Agent. The Sub Post Office application process involves the completion of a Post Office bespoke Business Plan amongst other things and also includes a subsequent interview with the Post Office wherein the applicant undertakes a powerpoint presentation. Having helped more people than I can care to remember through this process I am pleased to continue to be able to help many more as many finding it daunting, even though they clearly have all the skills to run a small business including a Sub Post Office. Indeed Ernest Wilsons “Buying a Sub Post Office Support Service” launched last year has really taken off with calls coming in from all over the country! It is always a regular highlight in the week when a delighted customer telephones me to say they have been appointed subpostmaster or subpostmistress – and this week I had two of these happy calls!

Searching for Someone Special!

Today was dominated by completing the interviewing process for a new member of staff. I really enjoy interviewing and seeing how different individuals present themselves , particularly when they all undertake the same programme of a competency based interview including a role play and a presentation -we are always on the look out for special people to join Ernest Wilsons as we continue to grow towards our vision of "being the first choice for those buying and selling a business.... " After two weeks of interviewing I think we have found someone special!
In between the interviews great to be advised by e-mail that three buyers whom we have introduced to Lloyd's have had their business purchase loans agreed - brilliant - who says the Bank's are not lending!

Busy yesterday launching some new Ernest Wilson initiatives to our staff which will improve our business. There is a real passion in Ernest Wilsons to improve all the time and it was inspiring to see their response and desire to implement some changes.

One of the Bank's telephoned me later to advise they could not support a loan request for a client buying a business. Okay that happens but what I find worthy of comment is the way it highlighted what I have felt is inappropriate in UK Banking in terms of sanctioning credit.
In this case we are talking about a £25,000 loan to buy a Coffee Lounge and Tea Room business. Input was £25,000 with support requested from the Enterprise Finance Guarantee scheme. The local Relationship Manager and the Senior Manager recommended the loan (the Senior Manager could not authorise the loan even though it was a modest £25,000, as due to the sector it required the second pair of eyes of the national credit team). The national credit team would not agree the loan despite appeals from the local team; concerned centered around the applicants experience and loan serviceability (which boiled down to judging level of drawings required). It is interesting that the local manager who had met the customer, looked in the "white of his eyes" etc had assessed the loan and was content the individual had the ability to run such a business and that the loan was serviceable. The Senior Manager added his support. I know the Senior Manager; he is very experienced.
Is it right that a national credit team, at this level of loan, can override the view of experienced local management, who have met the client, know the area and the business? Yes in some cases, particularly larger more complex cases and of course local managers can get too close and cosy at times with clients. Local managers do have targets to, but they also get "caned" for bad debt which focuses their minds also.
I do think that the balance has swung too far and that local experienced and qualified bankers should be empowered more, especially at these modest levels in non complex sectors. In this case I know the local managers have done all they can to get this loan agreed and share my disappointment - it happens.
Anyway I placed the proposition immediately with another high street bank - I shall let you know who it is if they agree it! Which I hope they will for these excellent hardworking sound people who deserve to be supported.

More good news

Not in the office today - but nevertheless great to get e-mails on my iPhone from Lloyds that appointments have been booked in the case of each of the two referrals made yesterday to them. They receive from me, with the buyers full authorisation, a precis of the lending proposal along with financial information, so I know they must be looking to lend if they are putting an appointment in the diary expeditiously. The financial news today includes comment on Lloyds returning to profit although growth in the lending book is flat including that to SME's. Some would point to falling demand (namely borrowing to invest in ones business is being deferred to more certain economic periods, hopefully ahead), others to customers paying debt down in this tough financial climate and some to an overly cautious risk approach to lending. In any event I am pleased to see that locally Lloyds are hungry to lend and grow their lending book with good quality propositions, including the use of the Enterprise Finance Guarantee scheme where appropriate.

Finding the right Bankers

It is always interesting to see how different Bankers react to propositions put to them. Lending money has never been a science in my view but more of an art (mixed with technology these days - credit scoring etc!). The art is assessing character and risk. With the latter important element, some zoom in on the risks of the proposition first and foremost and cannot see past them to the positive opportunities that the proposition presents and how the risks can be acceptably mitigated. Others first and foremost seek to understand the full scope of the proposition and whilst acknowledging the risks they are keen to meet the people behind the proposal and try and find a way to mitigate those risks. Whilst the latter Banker may ultimately be unable to lend like the first overly risk conscious Banker, this is at least after fuller consideration. That's the Banker to deal with - not a "yes" man by any means, not any less experienced or qualified, just hungry to deal. At Ernest Wilsons many buyers require finance to purchase businesses and I have the pleasure of guiding them to Bankers like that - ones who are hungry to lend.
I came across one today though, not one of my usual contacts, who lacked the hunger to deal on a proposition of merit. Not to worry, easily placed with another Banker who will grasp with open arms and this initial frustration soon evaporated as later in the day Lloyds TSB again advised two more loans had been agreed for buyers very recently introduced. It is always a delight to speak to buyers who have had such news, as it is often a worrying time for them - will they or will they not be approved for a loan, feeling their life is on hold until this news is received!
I also enjoyed meeting a buyer today, who had done his homework with an excellent proposition and I am sure he will find the Banks queueing up to lend to him - yes that does happen!