My business was one of the lucky few start-ups to benefit from the government’s Enterprise Finance Guarantee (EFG) scheme. Launched in June 2010 GOLFBUDDY.COM is a social network specific to golf. But while I was successful in securing a loan, it wasn’t as easy. Far from it.
The first bank we approached was HSBC where I was advised that I wouldn’t be eligible for the EFG and was also turned down for a normal loan due to the financial climate. The bank explained that once I had trading history they would look at financing my business. Not the greatest start as I needed funding to launch the business but in hindsight, I realised the business manager didn’t understand my business. The objection he gave clearly confirmed this and only spurred me on.
At this point I decided to change my business plan and the way that I pitched it. I approached a different brand of the same bank and was again turned down. However, this business manager was straight-to-the-point. He told me I had great idea but the bank was reluctant to back start-ups at that point.
Next I went off to Barclays where the first branch manager I spoke to didn’t even ask about the business. He was more concerned with how much I was going to put in. Same bank, different branch was where progress seemed to be made. The business manager understood everything from start to finish and explained that the bank would go 50/50 with me. I started the ball rolling only to find out two weeks later that senior management deemed my business high risk.
The business manager was disappointed by his superiors’ response and advised me approach the North West Development Fund. I did and, once again, was turned down for funding.
However, listening to the points raised by the fund, I kept on tweaking my plan and adding elements I thought the banks would like. Another Barclays branch pushed me towards a different development agency in another area. This then got passed on to Business Link where further meetings took place.
Eventually I got in touch with Lloyds TSB where I sat down with a manager called Jill Maude who understood the business before I even formally presented it to her. I think it helped that her dad played golf and she could see the benefits of my idea straight away. She recommended the EFG and explained why she thought I would get it.
One key point that was included in my business plan that I personally think resulted in me securing an EFG loan was explaining that I was quite prepared to put my house up for security. The EFG doesn’t take your home as security but the commitment I was prepared to make definitely worked in my favour.
I’ve read a number of articles about how many businesses have been turned down by the EFG but the fact remains, if banks don’t think they are going to get their money back they won’t invest. All investments need security and entrepreneurs need to understand that when they’re pitching for funding.
Having successfully secured a loan, my business is growing from strength to strength and we’re now seeing the next level of investment. Watch this space…
Oliver Brown is the founder of
GOLFBUDDY.COM