the where, when and how to finance business growth

Statements of Appetite

How we are giving confidence to local businesses to support themin growing and achieving their ambitions.

The Where, When and How to Finance Business Growth.

Accelerate Ayrshire Event @ Gailes Hotel, Irvine. Thursday 16th

February 2017

"The importance of SMEs to the Scottish

business community can never and

should never be underestimated. They

are the lifeblood of the country's business

eco-system, playing a crucial role in

economic growth and job creation.

The Royal Bank of Scotland is here to

support this sector and we are

determined to help local businesses

succeed”.

Susan FouquierRegional Managing Director, Business Banking Scotland

Our approach

We are committed to sharing your business ambitions and helping you succeed. Together with our dedicated teams we can offer:

Expertise to achieve operational efficiency and manage risks as your business grows

Simple day-to-day banking so you can focus on running your business

Better accessibility to banking through a range of different channels and solutions

Accredited Business Managers with a wealth of financial knowledge and understanding

Access to a team of specialist product and sector experts

Rich useful content and access to a network of connections

Agenda

1.Statements of Appetite

2.Good News Stories

3.Assumptions to support projections

15/02/2017This information is classified as public. 4

What is a Statement of Appetite ?

• Letter from the bank stating our willingness to lend up to £500k.

• Counter signed by Relationship Manager and either Director Business Banking or Senior Lending Manager.

• Based on current information (Ideally most recent set of FYE accounts and breakdown of debt servicing costs, account conduct, Companies House/external).

• Not a credit sanction but does hold additional consideration from credit when making an application when Statement of Appetite issued.

• Can be issued across all sectors.

• We can also issue SOAs for non Royal Bank of Scotland customers providing they provide 3 months personal and business banking statements in conjunction with the information above.


Statements of Appetite

• Relationship Manager issued SOA for £170k. The customer has since approachedthe bank for funding and a loan of £455k has been approved which will assist thecustomer in purchasing new commercial premises and help them grow theirbusiness.

• Relationship Manger issued SOA for £145k on. The customer then approached theRM for funding about 6 weeks later and a loan for £206k was completed to supportthe customer in purchasing new premises.

• Relationship Manger issued SOA for £230k. The business is currently a non RoyalBank of Scotland customer, however they requested funding after being issued withthe letter. RM has now got funding of £153k approved which will assist customer inpurchasing the premises they currently operate from, refurbish and modernise thepremises and double their working capital facility.


Good News Stories

Why assumptions are important

• When assessing credit applications, serviceability is key.

• We can make adjustments to the EBITDA as long as we understand these e.g. arefull dividends required, add back rent [if business premises being purchased], addback exceptional one-offs.

• If debt servicing cannot be confirmed by existing performance of business, then weneed to really understand improvement in business e.g. will new machines/propertyimprove productivity or reduce costs?

• Commentary to support projections are a great help when putting together a creditapplication.


Assumptions to support projections

Capitalise on opportunities with asset finance

Asset finance from Lombard could help you to:

Upgrade business equipment: from machinery, technology or business equipment to furnishings

Fund equipment from as little as £5,000

Release working capital

Improve productivity

Reduce the risk associated with ownership

Manage cash flow

Security may be required. Product fees may apply. Over 18s only

Lombard North Central PLC. Registered in England No. 337004Registered Office: 135 Bishopsgate, London EC2M 3UR.

Invoice Finance

Security may be required. Product fees may apply. Over 18s only

RBS Invoice Finance Limited. Registered in England & Wales No. 662221. Registered Office: Smith House, Elmwood Avenue, Feltham, Middlesex, TW13 7QD

The real value of your business may be tied up in unpaid invoices, stock or other assets. Invoice Finance can help you unlock this ‘trapped’ cash;

• Get a fast cash injection - up to 90% of the value of money owed can be available within 24 hours

• Minimise the risk of bad debts• As your working capital increases with the your sales performance, you can get

the funds you need for growth straight away (subject to your credit limit)

Invoice Finance Services

• Factoring (with or without credit protection)

• Invoice Discounting (with or without credit protection)

• Asset Based Lending

A unique offering in the banking world, Mentor is an advisory and consultancy service that helps you manage your compliance and regulatory obligations. In doing so, you can create better employee relations and a safer, more environmentally friendly workplace.

Our products and services can be tailored to your needs – from preparing documentation, such as contracts of employment, to helping you develop in-depth policies and procedures.

Mentor

Protect the interests of your business against risk by cutting through the complexities of Employment Law, Health & Safety and Environmental issues.

• Face to face and telephone consultancy

• 24/7 advice line, 365 days a year

• Accredited training for your employees

• A flexible product range designed to help your business

Our support

Please note that Mentor’s services do incur a cost

As well as our banking products we support aspiring entrepreneurs, start-ups and high-growth business customers by offering our time and expertise through our partnerships.

Through our partnership with Entrepreneurial Spark we are the only bank that supports free business accelerators across the UK.

Locations throughout the UK, including Glasgow, Ayrshire and Gogarburn (our Edinburgh headquarters) in Scotland.

We have supported the Prince’s Trust for longer than any other bank and have a market leading Women in Business programme.

EnterpriseSupporting more small businesses than any other bank in the UK

Thank you

For more information contact:

Andrew Buchanan

Senior Lending Manager

D 0141 550 8308 M 0771 715 1498 E [email protected]

LinkedIn andrewbuchananslmatrbsTwitter @abuchananrbs