Connecting private lenders with business borrowers
In a world awash with financial advisers, bankers and intermediaries, First Funding brings a refreshing approach to fund raising for small businesses. William Flatau was one of the first to see the opportunity for non-bank funding at a time when then world’s financial systems seemed to freeze.
Know your business
“I believe First Funding brings a rugged entrepreneurial approach to the fund raising. I have set up, run and then sold two companies among the other ventures I have undertaken, and the learning curve has been steep. The first and the most painful lesson for anybody in business is to ensure the fundamentals are sound. To the uninitiated and inexperienced, a business plan loaded with facts can be a man trap rather than a blueprint for success. I have met too many fallen business angels who made a success of their first business only to fail when they invested in something new.”
Beware the business plan that is 60 pages long, and filled with appendices of global market data. In my mind a business plan has four principles:
- The Market. What is your business sector? Is it a growth area, manufacturing or a service industry? Let’s assume you are opening a restaurant
- The Model. How will you run the business? Are you offering hamburgers or haute cuisine? They are completely different businesses
- The Management. Most important of all, do you trust the people running the business to look after your money? Is the entrepreneur Alan Sugar or a dreamy college kid with no business experience?
- The Money. Hockey stick graphs showing stellar profits in the future are of little help. How has the company traded over the past couple of years. A rule of thumb when looking at the forecasts; halve the profits and add 30% to the costs. Is the company still in business? Probably not. Ask the management to rethink their numbers.
Who can I trust?
“Banks often specify what sectors they like and don’t like, and there is no reason why private lenders shouldn’t do the same. Many stick to a market or a model they understand, which makes the selection process easier.”
“The next step is to decide whether you as a lender want to do business with the director. If you look into his (or her) eyes, do you see someone you can trust with your money, someone you believe will run the business in a professional manner? Not always an easy call, but check references and track record if you can. I found working for a London insolvency practice gave me an invaluable insight into how solid directors really are when under extreme pressure.”
“Our focus is to find a management team that we believe can deliver, and this is the experience we bring when selecting a business for lenders to support.”
First Finance (UK) Ltd
- Worked at Welbeck Wealth Management in 2005.
- Launched his brokerage in 2007.
- Set up the private lending network First Funding in 2009.
- Authorised by the Financial Services Authority.
- Member of the NACFB brokers’ trade body.