Convertibill’s personal approach takes the pain out of the funding process
Designed to remove the need for personal guarantees, liens and other restrictive practices, Convertibill also gives its clients the freedom to grow
Patrick Reynolds, Convertibill chief executive: “We look at what the business needs today and into the future.”
Convertibill was founded to take the pain and frustration out of the funding process for Irish businesses. “We provide a range of trade finance products which help businesses to grow and move to the next level,” explains Patrick Reynolds, Convertibill’s chief executive. “We saw how frustrating it could be for a business to have to jump through all the hoops involved in traditional lending models. The application process can be very long, often taking weeks, and the people making the lending decisions frequently have no idea who the business owner is or what they do.”
And there is no guarantee of getting a decision one way or the other at the end of that process. “The business owners and financial controllers involved have no control over the process,” Reynolds adds. “The process itself is far from clear and they may not actually get a decision at the end of it. And even if they do get approved there are arbitrary credit limits applied which can be very restrictive. This may work well for traditional lenders but it is not easy for businesses.”
The customer is firmly in control of the process. “We offer a user-friendly and flexible solution designed to meet each business’s individual needs,” he explains. “For example, if you go to a bank they have your accounts and access to your bank account as well. They put you into products that involve discounting or financing of trade receivables which may be part of the solution but you’ve got no control. At Convertibill, we look at total solutions. We look at what the business needs today and into the future. We see what finance is needed today and how that can be funded out of future cash flows.”
The Convertibill suite of products includes order finance, supplier finance, invoice finance, sales finance, distribution finance, and lease finance. Very importantly, the company also removes the need for the personal guarantees, liens and other restrictive practices common amongst traditional lenders.
We take time to get to know our customers and their businesses
Key to the Covertibill offering is a practical and individualised approach to lending. “We take time to get to know our customers and their businesses. While there is a separation between the sales and credit approval sides of the business, and this is as it should be, everyone who works here knows our customers and understands how their businesses work. They are not stuck in a back office making decisions in the dark. They ask commercial questions rather than lending type questions. We have a lot of commercial people and banking people working in the company and they all understand how business works.”
Business performance and potential are key factors taken into consideration. “We look at last year’s trade receipts when we are looking at funding next year’s stock,” says Reynolds. “Or if it’s a new business or a fast-growing company we look at current trade receipts. We have to be practical in what we do but be more flexible than traditional lenders when it comes to helping companies. We want to help them move on to the next stage of their development.”
That willingness to go the extra mile helps customers in very practical ways. “We have had businesses coming to us saying that they’ve turned away orders because they don’t have the funding to finance them,” he says. “For example, they might have an order worth €500,000 but need €250,000 to fund the stock to meet it and just don’t have the cash flow to do that and meet the day-to-day needs of the business. That’s just one of the areas where we can help."
We were dealing with a bank up until then and it wasn’t working out. The arrangements were very restrictive. Convertibill is much more proactive.
One company which has benefited from Convertibill’s flexible and business-friendly approach to lending is the Irish Fairy Door company. Founded in 2013 by two couples, Oisin Barry and Niamh Sherwin-Barry and Aoife and Gavin Lawler, the company sells miniature “fairy doors” which have proved an enormous hit with children in Ireland and overseas.
“They open up a world of imagination,” says Oisin Barry. “It’s a little wooden door with a key and letter to invite a fairy into your home. The child registers the fairy on the website and the fairy signs a lease agreement with co-habiting rules. The children write to the fairy and if they’re lucky the fairy will write back. We’ve also added accessories like the Worry Plaque which turns red when the fairy is listening and green when the fairy has taken the worry away. They are very big in Ireland and one in every two kids now has one. The UK is also going strong for us and America is taking off.”
The relationship with Convertibill is quite recent. “They came in a few months ago and pitched to us to take over our invoice financing and stocking finance,” says Barry. “We were dealing with a bank up until then and it wasn’t working out. The arrangements were very restrictive. Convertibill is much more proactive. They will do 80 per cent of our invoices, the bank would only do 60 per cent. Also, if we have a couple of big clients the bank will seek to lessen exposure. Convertibill will offer up to 80 per cent once they have done their own checks on the clients. It has worked out very well. They are very easy to deal with. We have to buy the vast amount of our stock in the last quarter of the year for the Christmas market and Convertibill is looking at ways to help us fund that.”
The cash flow benefits are very important. “Cash flow for a small business is vital. If we sell product in July we have to pay the factory and so on upfront and it can be four months before we get paid by our customer. Convertibill funds up to 80 per cent of that and we get the other 20 per cent once we get paid. They have already helped our cash flow in a major way. Convertibill lets us concentrate on the business, when we get an order in we are not worrying about how we are going to pay the factory and we don’t have to try to negotiate with major customers for better terms.”