Buyers' Guide

Only a fool would deny that tough times are ahead, thanks to the UK economy's current state, and as the pages of PrintWeek show, print isn't immune from this. It comes as no surprise that, in this climate, financial organisations are increasingly reluctant to lend.

Print is recognised as being a high-risk sector because the value of equipment is so high. On top of this there are plenty of small businesses offering little return on investment. Rather than seeing a reduction in the numbers of lenders, what has changed is the way they are lending, says Paul Coggins, managing director of Print Finance.

Therefore, when approaching a financier, make sure the information you present about your company is ordered and professional. According to Coggins, many printers are still reluctant to release management accounts because they haven’t updated them for the past two years.

The financial market is in turmoil and financiers are looking at their transactions much more closely so be well prepared, and don’t be surprised when lenders ask searching questions, says Coggins. The borrower should also consider what benefits the purchase of the new equipment will bring. It seems simple but it is paramount to give the lender confidence in the business.

When looking for a new package, printers should always ask the interest rate being charged, what extra fees are involved to complete the deal and what exit fees are payable on early settlement of agreements, advises Andrew Bullard, sales director at State Securities.

Although lenders have a variety of packages for asset finance, mortgages and book debt, the majority will not offer advice, leaving this to the client’s accountants or tax advisors. Similarly, for mergers and acquisitions, printers should get advice from their auditors and solicitors as bank managers will not have the necessary expertise.

The majority of the sector is eligible for the Department for Business, Enterprise and Regulatory Reform backed Small Firms Loan, but only a few companies take it up, says Bullard. Independent finance brokers are a good way of getting advice about the market – The National Association of Finance Brokers provides contacts in your local area.

WHAT'S NEW IN... FINANCE AND INSURANCE

• The BPIF has teamed up with insurance broker RK Harrison to launch an insurance service offering an alternative to standard insurance products. The product is exclusive to BPIF members and offers a range of insurance and risk management products and services

• Paper merchants claimed more than £10m for debtor insolvency over the past 12 months and may find it increasingly difficult to find credit cover as a result, according to credit insurance broker Aon Trade

• Former Curtis Fine Papers managing director Keith Chapman has started a consultancy business offering re-financing and turnaround support for the paper, packaging and plastics sectors

• The UK is facing a serious risk of recession within months, according to the findings of a survey of almost 5,000 small, medium and large businesses. The British Chambers of Commerce’s quarterly report found the credit crunch and rising costs had dented the most important sectors of the economy

• Print’s first dedicated insurance package to include full internet liability cover has been launched by insurance broker Jardine Lloyd Thompson (JLT). SuperPrint covers the needs of small family-run firms through to large multi-site groups