growing to give just got easier
GROWING TO GIVE JUST GOT EASIER
CASE STUDY
Ethical water brand Belu had outgrown its old bank and was looking for a new provider, but as a social enterprise, it struggled to get the right deal before it started talking to Santander. Belu is a unique business. It supplies bottles of still and sparkling water to UK bars, hotels and restaurants. Nothing odd about that you might say, but what is rare is that it gives all its profits to charity. The company has exceeded its target of contributing a minimum of £300,000 over three years to the international clean water charity WaterAid, donating more than £614,326 to date, with a pledge to donate £1 million by 2020. “In the very early days Belu lost a lot of money because it essentially campaigned against the bottled water industry of which it was a part,” says Belu’s Finance Manager Laura de Poitiers. “In 2009 a new management team came in to reverse the situation, but the business never lost its fundamental commitment to the environment.” The challenge of social business Giving away your profits is great news for good causes in the developing world, but it makes growing a business particularly difficult. While most businesses invest profits in growth, Belu used a small invoice discounting line of just £250,000 to fund its purchases and
maintain cashflow. “We were maxing out our finances every month and we couldn’t take any more,” says Laura. “Our customers pay us 30 days after month-end, so we had to fund our working capital cycle to pay off debts before receiving money from our customers. That gap gets bigger as you grow.” Gradually a vicious circle connected around the organisation. Its quality product and commitment to ethical causes meant it attracted increasing interest from customers, yet taking on new contracts meant additional strains on working capital. Eventually something had to give. “Our old bank was unable to offer us more than our existing facility, so we started looking for a new bank,” adds Laura. “At around the same time our CEO got talking to a Santander executive at an event and explained the business’ angle, what our needs were and the fact that banks didn’t seem to understand our different model.” As a bank committed to the principles of CSR (Corporate Social Responsibility), with a host of programmes that aim to support sustainable entrepreneurship, Santander has a healthy track record in funding social enterprises. It quickly set about creating a tailored account that would enable Belu to move forward. “They constructed a completely new account giving us all the flexibility and functionality of a business account but charged at charity rates,” says Laura. “That was the big hook for us: to work with a bank that really understood our needs.”
Simple Personal Fair What a bank should be
“They were really happy with the invoice discounting line and with the customised Direct Debit solution they will be able to manage their customers and their cashflow much more easily.” Deepesh Thakrar, Santander Relationship Director
We can give WaterAid more money each year because we know we don’t have to hold profits back to fund our entire working capital the following year. Laura de Poitiers, Finance Manager, Belu Water
Transforming lives by boosting profits Deepesh worked closely with both Laura and Santander’s credit department to convert Belu’s existing facilities into a more streamlined suite of solutions. “They were really happy with the invoice discounting line and with the customised Direct Debit solution they will be able to manage their customers and their cashflow much more easily,” says Deepesh. “This has had a direct impact on the bottom line. In six months to June, Belu turned over more than two million; in the same period last year the figure was about half a million pounds lower.”
Unique measures Following in-depth meetings with Laura, Santander Relationship Director Deepesh Thakrar looked at ways of adapting Santander’s portfolio of solutions to suit the particular needs of Belu. As well as extending the company’s invoice discounting facility of £500,000, the bank adapted their Direct Debit solution – a product normally offered to larger companies that employ thousands of monthly payments – customising it to suit a smaller business like Belu, which takes only 40 such payments a month. Santander also provided the company with a current account combined with an overdraft that was interest-free as long as the balance was paid off within 30 days. This will give Belu greater flexibility when it comes to regulating cashflow and honouring payment terms agreed with suppliers.
Laura agrees that Santander’s help has allowed the business room to grow dramatically and will in future enable it to help transform many lives through its connection with WaterAid. The deal has allowed Belu to take on bigger customers, delivering more profit and helping the business to grow, as she explains. “We can give WaterAid more money each year because we know we don’t have to hold profits back to fund our entire working capital the following year.” Laura also feels Santander’s CSR credentials have been more than justified.
“Santander’s facilities help us generate profit and the more we grow the more we can give.” Laura de Poitiers, Finance Manager, Belu Water “I think Belu picked us because of the approach we take,” says Deepesh, who believes Santander’s commitment to establishing a ground-level relationship and continuing to take a close interest in the company’s progress. “They were aware of our product lines and the offer, but our personal approach might have come as a surprise.”
In brief Company turnover: £4.5 million (as of 2014) Sector: Food and drink Ethical bottled water company Belu donates all profits to WaterAid and thus has to fund expansion through cashflow, a near-impossible task because it has to pay suppliers before receiving money from customers. Thanks to Santander working closely with Belu to provide the most appropriate solution, the bottled-water company can now donate more money at year-end not only because it is becoming more profitable but also because it doesn’t have to withhold cash to pay suppliers. This will help support WaterAid projects in the 26 countries they operate in. Santander created a unique set of facilities to underpin Belu’s continued growth. The business is growing so quickly, in fact, that the team have to regularly redraft financial forecasts to suit the improved picture.
Solutions delivered: Invoice discounting Direct Debit origination Current account Overdraft
Santander Corporate & Commercial is a brand name of Santander UK plc, Abbey National Treasury Services plc (which also uses the brand name Santander Global Banking and Markets) and Santander Asset Finance plc, all (with the exception of Santander Asset Finance plc) authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority. Our Financial Services Register numbers are 106054 and 146003 respectively. You can check this on the Financial Services Register by visiting the FCA’s website www.fca.org.uk/register or by contacting the FCA on 0800 111 6768. Credit cards are provided by Santander UK plc. In Jersey, Santander UK plc is regulated by the Jersey Financial Services Commission to carry on deposit-taking business under the Banking Business (Jersey) Law 1991. Registered office: 2 Triton Square, Regent’s Place, London NW1 3AN. Company numbers: 2294747, 2338548 and 1533123 respectively. Registered in England. Santander and the flame logo are registered trademarks. Santander UK plc is a participant in the Jersey Bank Depositors Compensation Scheme. The Scheme offers protection for eligible deposits of up to £50,000. The maximum total amount of compensation is capped at £100,000,000 in any 5 year period. Full details of the Scheme and banking groups covered are available on the States of Jersey website (www.gov.je/dcs) or on request.
CASE STUDY
Ethical water brand Belu had outgrown its old bank and was looking for a new provider, but as a social enterprise, it struggled to get the right deal before it started talking to Santander. Belu is a unique business. It supplies bottles of still and sparkling water to UK bars, hotels and restaurants. Nothing odd about that you might say, but what is rare is that it gives all its profits to charity. The company has exceeded its target of contributing a minimum of £300,000 over three years to the international clean water charity WaterAid, donating more than £614,326 to date, with a pledge to donate £1 million by 2020. “In the very early days Belu lost a lot of money because it essentially campaigned against the bottled water industry of which it was a part,” says Belu’s Finance Manager Laura de Poitiers. “In 2009 a new management team came in to reverse the situation, but the business never lost its fundamental commitment to the environment.” The challenge of social business Giving away your profits is great news for good causes in the developing world, but it makes growing a business particularly difficult. While most businesses invest profits in growth, Belu used a small invoice discounting line of just £250,000 to fund its purchases and
maintain cashflow. “We were maxing out our finances every month and we couldn’t take any more,” says Laura. “Our customers pay us 30 days after month-end, so we had to fund our working capital cycle to pay off debts before receiving money from our customers. That gap gets bigger as you grow.” Gradually a vicious circle connected around the organisation. Its quality product and commitment to ethical causes meant it attracted increasing interest from customers, yet taking on new contracts meant additional strains on working capital. Eventually something had to give. “Our old bank was unable to offer us more than our existing facility, so we started looking for a new bank,” adds Laura. “At around the same time our CEO got talking to a Santander executive at an event and explained the business’ angle, what our needs were and the fact that banks didn’t seem to understand our different model.” As a bank committed to the principles of CSR (Corporate Social Responsibility), with a host of programmes that aim to support sustainable entrepreneurship, Santander has a healthy track record in funding social enterprises. It quickly set about creating a tailored account that would enable Belu to move forward. “They constructed a completely new account giving us all the flexibility and functionality of a business account but charged at charity rates,” says Laura. “That was the big hook for us: to work with a bank that really understood our needs.”
Simple Personal Fair What a bank should be
“They were really happy with the invoice discounting line and with the customised Direct Debit solution they will be able to manage their customers and their cashflow much more easily.” Deepesh Thakrar, Santander Relationship Director
We can give WaterAid more money each year because we know we don’t have to hold profits back to fund our entire working capital the following year. Laura de Poitiers, Finance Manager, Belu Water
Transforming lives by boosting profits Deepesh worked closely with both Laura and Santander’s credit department to convert Belu’s existing facilities into a more streamlined suite of solutions. “They were really happy with the invoice discounting line and with the customised Direct Debit solution they will be able to manage their customers and their cashflow much more easily,” says Deepesh. “This has had a direct impact on the bottom line. In six months to June, Belu turned over more than two million; in the same period last year the figure was about half a million pounds lower.”
Unique measures Following in-depth meetings with Laura, Santander Relationship Director Deepesh Thakrar looked at ways of adapting Santander’s portfolio of solutions to suit the particular needs of Belu. As well as extending the company’s invoice discounting facility of £500,000, the bank adapted their Direct Debit solution – a product normally offered to larger companies that employ thousands of monthly payments – customising it to suit a smaller business like Belu, which takes only 40 such payments a month. Santander also provided the company with a current account combined with an overdraft that was interest-free as long as the balance was paid off within 30 days. This will give Belu greater flexibility when it comes to regulating cashflow and honouring payment terms agreed with suppliers.
Laura agrees that Santander’s help has allowed the business room to grow dramatically and will in future enable it to help transform many lives through its connection with WaterAid. The deal has allowed Belu to take on bigger customers, delivering more profit and helping the business to grow, as she explains. “We can give WaterAid more money each year because we know we don’t have to hold profits back to fund our entire working capital the following year.” Laura also feels Santander’s CSR credentials have been more than justified.
“Santander’s facilities help us generate profit and the more we grow the more we can give.” Laura de Poitiers, Finance Manager, Belu Water “I think Belu picked us because of the approach we take,” says Deepesh, who believes Santander’s commitment to establishing a ground-level relationship and continuing to take a close interest in the company’s progress. “They were aware of our product lines and the offer, but our personal approach might have come as a surprise.”
In brief Company turnover: £4.5 million (as of 2014) Sector: Food and drink Ethical bottled water company Belu donates all profits to WaterAid and thus has to fund expansion through cashflow, a near-impossible task because it has to pay suppliers before receiving money from customers. Thanks to Santander working closely with Belu to provide the most appropriate solution, the bottled-water company can now donate more money at year-end not only because it is becoming more profitable but also because it doesn’t have to withhold cash to pay suppliers. This will help support WaterAid projects in the 26 countries they operate in. Santander created a unique set of facilities to underpin Belu’s continued growth. The business is growing so quickly, in fact, that the team have to regularly redraft financial forecasts to suit the improved picture.
Solutions delivered: Invoice discounting Direct Debit origination Current account Overdraft
Santander Corporate & Commercial is a brand name of Santander UK plc, Abbey National Treasury Services plc (which also uses the brand name Santander Global Banking and Markets) and Santander Asset Finance plc, all (with the exception of Santander Asset Finance plc) authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority. Our Financial Services Register numbers are 106054 and 146003 respectively. You can check this on the Financial Services Register by visiting the FCA’s website www.fca.org.uk/register or by contacting the FCA on 0800 111 6768. Credit cards are provided by Santander UK plc. In Jersey, Santander UK plc is regulated by the Jersey Financial Services Commission to carry on deposit-taking business under the Banking Business (Jersey) Law 1991. Registered office: 2 Triton Square, Regent’s Place, London NW1 3AN. Company numbers: 2294747, 2338548 and 1533123 respectively. Registered in England. Santander and the flame logo are registered trademarks. Santander UK plc is a participant in the Jersey Bank Depositors Compensation Scheme. The Scheme offers protection for eligible deposits of up to £50,000. The maximum total amount of compensation is capped at £100,000,000 in any 5 year period. Full details of the Scheme and banking groups covered are available on the States of Jersey website (www.gov.je/dcs) or on request.
