The Promotion Company
SMEs will usually, at some point in their life cycle, need to source external funding for all sorts of reasons. A common one is the purchase of new premises, perhaps because more physical space is required or a different location would be more favourable. The Promotion Company, based in Hull, is one such organisation that Peacock Finance has assisted with the purchase of business premises. Director Angela Oldroyd, one half of the husband-and-wife team who own The Promotion Company, describes her experience.
A business that’s going places
It’s this personal, tailored approach that sets The Promotion Company apart. Angela added: “We have established some really positive, long-term relationships with clients in both the public and the private sectors. We have a thorough knowledge of their brands, and in some cases we have their calendar of events and are able to support them with advice and suggestions well in advance of an event or campaign.
“This helps enormously with their planning process, and we are always mindful of their budgets and tailor the options accordingly.”
Cheap and cheerful is not always the most appropriate approach when it comes to promotional collateral, and neither is leaving it until the last minute. “We always turn jobs around as quickly as possible, but a three-week lead time is preferable, longer if possible, so that the planning and decision-making isn’t rushed. Poorly thought-out promotional activity can be, on occasions, quite damaging,” Angela explained.
Taking the leap
The couple had heard good things about Peacock Finance and, on a recommendation, they approached me for assistance with funding the purchase of the premises. Angela said: “Once the process started, any worries I’d had about our decision to buy disappeared as Darren was so reassuring, he helped me realise this was definitely the right thing to do.
“It was a completely transparent transaction. Darren was so personable, he explained everything thoroughly and was happy to answer all our queries throughout. Nothing was ever too much trouble and we really felt it was as important to him as it was to us. He made it as simple as possible, and I wouldn’t hesitate to recommend him to other businesses or return to him for further advice in the future.”
How we did it
The other benefit of doing it this way is ultimate flexibility. If the owner chooses to sell the business in the future but the purchaser can’t afford to buy the premises also, their property company can continue to rent the space to them or, indeed, another business, for ongoing residual income. Or, the owner could choose to sell off the premises to release capital, and then lease them back from the new owner.
Owner-occupier commercial mortgages are also good because high street funders view them as more stable, and therefore are able to offer the most favourable interest rates, with a lower deposit requirement. Similar to a residential buy-to-let mortgage, to qualify for either an investment commercial mortgage or an owner-occupier commercial mortgage, you will typically have to have a deposit of at least 30 per cent for the former, and 25 per cent for the latter. You will then have to be able to show that you can cover at least 135 per cent (up to 150 per cent) of the rental payments from your business profits. Such mortgages are only, typically, available on a repayment basis, not interest only, as funders like to see that you are reducing your overall level of debt year-on-year.
A 'win-win' solution
Straightaway, I recognised this move was a natural progression for The Promotion Company and I was more than happy to support their endeavour. I know Angela and Richard have had no regrets about their decision whatsoever, and they’ve got the added benefit of being able to let out parts of their new premises to other businesses, and generate additional rental income.
It’s always very satisfying for me to help businesses achieve their goals and I look forward to seeing The Promotion Company enjoy further success in the years to come.