Thought about starting a business? Thought about raising finance? Throw in welcoming a new baby boy into your world, oh yes, and a pandemic!
They are the circumstances Dublin native and GDG Business Finance founder Gary Grimes found himself in before the country went into economic lockdown over the corona virus.
Despite everything, Gary believes he is in exactly the right space at the right time.
A 15 year veteran of the finance world with stints at HSBC, Citibank and digital lender Grid Finance, navigating the world of numbers comes easy to the Dublin native and now he’s hoping to help others with their business goals, even if finance wasn’t ever something he expected to end up in.
Like many youngsters playing for your Premier League team is a boyhood dream, but in Gary’s case having a famous uncle fed into his sporting ambitions. It’s probably to be expected if your uncle represents Ireland and wears the jersey of Manchester United. That uncle is Ashley Grimes but Gary’s career went in a vastly different direction.
‘I’ve been in finance since I was 19, 35 now so over 15 years. I never envisaged my self going into finance. I actually saw myself as a footballer! And that was actually the reason I left Ireland as a teenager. I went over to Scotland when I was 19 to play some semi professional football over there and took a part time job with HSBC Bank in the UK. I was there for the best part of seven years, where I got a fantastic education. Going from being on the telephone in telesales to within two years leading own team in the bank, of 14 people. By the time I left I was a senior member of the management team, managing and looking after a wider a team of 48 people, in a specialist department in the bank, but I missed home.’
Back in Ireland and Gary found himself in Citibank working in securities, managing high net worth clients, participating in the Collective Investment Scheme (CIS) offered by the bank.
Having worked in the corporate world for some years, the idea of a start up environment was something that peaked Gary’s interest.
‘Working in large organisations I always found myself just part of a structure. When looking to progress I found there was a lot of sideward moves required which was against my nature, I always wanted to be moving forward which was why I had an interest in the start-up sector. The idea of starting a business or joining a rapidly growing start up business to see how it grows and grow with it appealed to me. The problem was, I didn’t know where to start or who to talk to and then, ironically, I saw a tweet from a new business that had just started trading and were looking to add to their small team..
‘I liked the idea of getting in at the ground level and growing with the company.’
The opportunity to do just that arose with Grid Finance, a then peer to peer lender which at the time was focused on raising capital for small and medium sized businesses via their innovative lending platform, The GRID. I joined as the third member of staff, and grew with the company. It was a detailed education on getting to know the non bank finance space in Ireland quite intimately.
‘I joined them as a Grid Business Manager where I was responsible for the origination of loans and developing the end to end sales process journey with other members of the team. It was a great position to hold in the company, as we were starting from scratch with a small group of people with great ideas and it came together beautifully. On the back of a fund raise in the business and as the team grew, I moved into being the Senior Operations Manager’s position in the company and moved then on to being a Fund Manager which was my last position, overseeing the Kilcullen Cash Advance Fund, supporting Irish businesses, before I left just at the end of last year to go and set up my own company GDG Business Finance.’
So given all that has gone on in the intervening months, how does Gary feel now about his decision?
‘There’s never a right time to start your own business but, for me I considered 4 points which were a) my readiness to become an entrepreneur b) my personality c) my financial situation and d) then the effect on my family considering my girlfriend was 7 months pregnant at the time – considering running a business can be a family affair this one was a big consideration for me, but I felt I was ready and here we are today.
Gary sees a major shift looming in the finance space in Ireland.
‘Small and medium sized businesses are very heavily dependent on bank finance in this country, to a point where it is unhealthy and causing a significant undercapitalisation in Irelands SME community. With the uncertainty of Brexit I saw an opportunity for someone to come into the market and plug a gaping hole left by the banks who appeared to be withdrawing from the small and medium sized lending market.
‘And that was an opportunity digital lenders in the non-bank finance space. There’s quite a few, probably 30 plus companies operating in the sector. Many of which are very innovative platforms which can provide fast access to finance for businesses much faster than the banks can. Our goal is to educate the small and medium sized businesses in the market for finance on the options available to them in order to for them to make the most informed decisions. I set up my own business as somebody who can represent a smaller medium sized business to all of these lenders in the best way possible. And really help Irish SME’s access a much more diverse range of finance products, products that are actually much more suited to the finance needs than just your standard vanilla term loan.’
Decoding bank applications processes
For many any bank’s credit application process can be a daunting prospect and that’s where Gary comes in.
‘As a finance guy myself, I live and breathe finance on a day to day basis. So it’s very easy for me to understand the jargon and be the filter Irish business owners need when discussing finance with a lender. Here In Ireland it could be argued that there is a fear of applying for finance., because some people don’t have a great grasp of it and actually didn’t understand it to an extent. All business owners know what finance is of course, but in a lots of cases we see a fear of actually applying because of a lack of understanding about what they are asking for or the fear of rejection. For me, finance is not complicated. For somebody who doesn’t live and breathe it, they might see it as a complicated. So what I really what I want to do is to help people to understand finance shouldn’t be feared, it should be used as a tool . To help grow your business, and we can be a resource to business owners to have you help educate them on what type of finances are available and how you can use those finances to help you grow your business.’
Needless to say there is an appropriate time to chase external finance a point which Gary says is critical to success.
‘You should not see bringing in external finance as a last resort. Don’t see finance as ‘God, I’m not going to be able to pay the bills this month, I need to go and get a loan’.
‘What I am trying to help business owners understand is, go back six months before you get to a point where bills are being difficult to pay and establish if your business under capitalised? How can I use finance in my business to help me grow and expand the company? And how can I make sure it’s capitalised correctly? That’s why what I help business owners understand. Help them to make the best decision and focus on growth in their business.’
Get Approval Ready
If raising finance is something you are considering there are some basic moves you can make in advance says Gary.
‘When you make an application to a finance provider, what you want to do is, you want to send the best and strongest possible application in order to give yourself the best chance of an approval.
‘Getting a strong application and the lowest interest rate as well. That’s that’s the goal. A business owner can take steps in the months leading up to make an application to ensure they are ready for that. And that’s where we love to get to chat to business owners maybe two or three months before the need arises.’
Best time to start looking to raise finance?
‘As soon as you have established that there will be a need to bring in external finance or there’s a finance need within the business, is when we want to talk to you. We will help you get ready to make the application and ensure you are getting in with the best long-term funding partner.
‘What I’ve specialised in is being able to package an application in a language that credit teams understand, just simply because I have so much experience of credit teams, having worked in one myself and having seen several thousand credit applications in my time. Getting these credit teams to understand the business’s story is a key part of getting an approval on an application. Having somebody in your corner that’s able to proactively package that and present for your business can be a valuable service.
Finance application checklist
There are some documents you can prepare to get yourself primed for an application.
Here’s the checklist.
‘Make sure your bank statements are clean, make sure you’re not showing regular unpaid items for standard services like phones, lights and other utilities, they are all red flags for credit teams. A basic one that is regularly overlooked, make sure your accounts are filed on time. Discuss this with your accountant. Ask that question “Hey are my account’s filed?” Remember they work for you!
‘These are really basic things but addressing these small items will help making an application as streamlined and as painless as possible. We can then proactively package the strongest possible application and submit it to a lender. With non-bank finance providers you should be expecting to get an answer within 3 working days or 36 hours with an estimated drawdown of funds within 5 days. So three working days for an answer.
‘In my experience 90% of all Irish businesses are reliant on the banks as their first part of the call and that process can take weeks. For myself to sit here and then say, actually, there’s a non-bank finance provider out there, they’ll be able to give you a decision within three days, some find that hard to believe because it’s totally against what people are actually used to. But that’s the truth of it.
‘In the UK 50% of businesses will go to the bank and 50% of businesses will go into the non-bank finance providers. That’s the split, where in Ireland it’s 90% of the bank and 10% non-bank and that’s only because of the lack of awareness, the lack of education around the options that are available out there, which again, is something that GDG Business Finance is trying to bring to the notice of business owners we are starting to see is support for that non-bank finance base.’
My Take – Involve Digital Lenders in the recovery
Gary is firmly of the view that when a return to economic activity is signalled by the government and the country gets back to work it will be important to have quick access to finance and believes that digital lenders should be involved.
‘The strategic Banking Corporation have started expanding their mandate to involve non bank finance providers like Capital Flow and Bibby, now there is a huge working capital loan scheme that’s just been released by the Department of Finance.
‘That’s gone to the banks and Microfinance Ireland. Unfortunately, I don’t think the banks can execute quick enough in order to be able to deliver that working capital into businesses that need it now and trying to access new money is almost impossible. I don’t think they had the capacity before to deliver fast decision and drawdowns.
‘With the added capacity and increased volume requests right now I’m not sure how they will cope with that. But what is available is another cohort of lenders like GRID Finance, Linked Finance and Grenke that are already lobbying with SBCI to expand their distribution channels and include them. They have businesses ready to move capital to and that’s something interesting that I think we’re going to see over the next couple of months, where non-bank providers will become a real complement to the banks in this country and in some cases replace them as the first option.’
Accessing credit during/after Corona virus
One wouldn’t need to be an economic genius to deduce that raising any finance in the coming months will be challenging but will be doable according to Gary.
‘It’s going to be more difficult for Irish SME’s to access credit, no doubt, particularly with the banks it’s going to be much more difficult to access funds. Given banks are accessing capital at 0% I believe their risk appetite is going further diminish because they will not want the default risk..
‘Naturally, there are a number of businesses out there that are going to struggle from this, so the banks appetite for for lending is going to continue to retract. The fact that non-bank lenders have the ability to adapt and make changes to their process faster will be an advantage. But I think, to answer your question, it’s definitely gonna going be more difficult but absolutely not impossible, because there will be more options available to business owners. And it’s just really about having your all your ducks in a row, and being able to present the strongest possible application to these lenders to ensure high levels of approvals.’
Thinking past Covid 19
One of the likely advantages from remote working if you have had a new arrival is not having to be tied up in commuting and Gary is enjoying his new work environment.
‘A lot happened in my life in the past four months. We all had a grand plan at the start of the year but as the one of the greatest heavy weight boxers in our time, Mike Tyson said “everyone has a plan until they get punched in the mouth” Covid19 was the uppercut no one saw coming..’
‘I had just moved into my new office at the start of February which is just here in Crumlin village.
‘Myself and my partner Janice just had a baby boy Rian on the 15th of March so there was a lot of moving parts and then obviously corona virus came along.
‘From the business perspective of GDG business finance it’s definitely had an impact because a large part of our target market, was hospitality and retail businesses all of which have all of a sudden closed. And so that’s obviously been difficult but forced me to rethink how I am bringing in revenue to my business. On the working from home aspect I’ve been lucky myself in that I’ve had the ability to be able to work remotely in my old job and now I’m just doing it full time.
One piece of advice from Gary in all of this if you are working from home is – pick up the phone.
‘I’m keeping in touch with clients and avoiding emails where I can if I’m being perfectly honest. I think this is a good time for people to be having conversationstalking, I would encourage people to and pick up the phone as often as possible.
‘I can I find that you get a lot more done in the 30 second conversation than you would do in an email.
‘And live video calling platform Zoom has obviously been a huge benefit to help with face to face conversations with business owners.
‘It’s been it’s been a very interesting couple of months.
‘As young as my business is, it’s made me rethink the model completely. And it’s made me go and source new revenue streams a. And new avenues to bring new revenue into the business, which is probably not something we would have done, had Covid 19 not hit.
‘Being optimistic, while we’re, in the middle of a storm, it’s going to be a huge shock to businesses, and every business including my own is evaluating what they are doing.
‘But I think a business like my own will have a significant role to play in the education around alternative finance options when we come out on the other side of it.
‘Being able to help businesses get capitalised when we come out of this is going to be crucial and we want to play our part as well.
‘Our target market in Ireland is any small and medium sized business that is looking or potentially looking to bring in finance into the company within the next 12 months.’
But what can a potential client experience if they pick up the phone and call GDG business finance?
Heres what you can expect:
If you’ve got a story to tell about your business and would like to be included in our coverage feel free to get in touch!