1. finance

Liquid Finance Case Study
Bradley Smith Hair & Beauty
• A West London hair and beauty salon brand
• bradleysmithhair.com
LIQUID
FINANCE
Funding growth
• First funded by Liquid Finance in September 2014
• Funding use: to upgrade brand image and open third salon
• Turnover increased by around 20%
BACKGROUND
Bradley Smith is a hair and beauty brand located in West London. It currently has nine employees across three salons in
Strawberry Hill and Heathrow. Bradley Smith, the owner and managing director, is ambitious and driven with a dream to
have as many salons as the famous Toni & Guy brand.
‘‘
I wish I had
known about Liquid
Finance earlier as then
I would not have
wasted so much time
with the bank.
Getting the funding
I need to grow
my brand has given
me a huge morale
boost. The fact
that Liquid Finance
were willing to
help me gave me
confidence now I am
going from strength
to strength
Bradley Smith
‘‘
FUNDING REQUIREMENT
In 2013, in order to grow his business, Bradley identified that his first two salons needed to work better and look better. He
wanted to improve the layout of the salons and change the image so that it was more professional and reflected the Bradley
Smith brand values of elegance and style in a friendly atmosphere.
Bradley first turned to his bank for the investment funding only to find he was refused help. “The bank was my biggest
challenge. They couldn’t see the potential for growth that the investment would fund; they only saw the risk and thought
I needed the money to get my business out of trouble. But my aim was to grow and it was very frustrating that the bank
would not help me,” said Bradley Smith.
SOLUTION
Having been rejected by the bank, Bradley was unsure where to turn but then was recommended to get in touch
with Liquid Finance as an alternative source of business cash advance funding.
Liquid Finance uses a prediction of future credit and debit card payments to calculate a cash advance. A factor rate
“fee” is applied to the advance and Liquid Finance purchases an agreed daily percentage of the business’s future card
receivables until the advance, plus fee, is repaid. Pricing is bespoke to match the business’s needs. Funding is provided
within as little as 10 days - from application to cash in the bank and daily batch settlements are automated.
“The Liquid Finance advance was agreed quickly (and the second time was even faster) and I have found it to be
good value. For me, the best thing is that the repayments are automatic – everything goes through the card machine.
You don’t have to remember to put any money aside and you don’t notice a big change. I didn’t even realise that I had
paid the first advance off! I find it stress-free and can concentrate on my business,” said Bradley.
RESULTS
Bradley Smith Hair and Beauty has now had three advances and all the money has gone towards business growth
and getting more people through the door. The first batch was used to improve the layout and look of the brand in
the upstairs hairdressing areas, the second batch was used to do the same with the beauty areas downstairs and
Bradley used the most recent advance to open his third salon.
‘‘
‘‘
Bradley estimates that his turnover has increased by around 20% since taking his first advance from Liquid Finance.
I started working with Liquid Finance over a year ago following some challenges with
securing a bank loan for my business. I was looking to update my Hairdressing Salon to make
it look more professional and provide a more sophisticated service for my clients. The Liquid Finance team
was very helpful and professional, leading me through the process and allowing me to move forward with
my business plans. The advance worked perfectly for me, making my life so easy with each sale helping
to pay back my advance without me having to think about it! As a result I have continued to use the
service to renovate my beauty salon and will do so again to update new premises. I am building
a brand and Liquid Finance is standing alongside me making it happen! I would definitely
recommend a Liquid Finance Cash Advance to any of my colleagues who need business finance...
Bradley Smith, owner and managing director at Bradley Smith Hair & Beauty.
Seven Things I’ve Learned
Bradley Smith, entrepreneur and owner of Bradley Smith Hair
1)
Although my high street bank seemed to be the obvious first port of call to find out what lending options were
available to me, I learned that it was not my only option when I needed a loan and that I shouldn’t give up if they say no.
Unsecured lending to small businesses is currently very low, so I have learned not to be surprised if my request for a loan
isn’t approved straight away or is even rejected outright. But just because this happens, it needn’t spell the end of my
business expansion plans.
The world changed when Lehman Bros went down and I now know that traditional banks are no longer going to
take a small business like mine and partner it all the way to becoming a national high street chain by providing every
conceivable financial service along the way. But there are alternatives.
2)
I learned not to be shy in asking for help and advice. If your bank can’t help with your particular requirement,
then ask what alternatives it can recommend and if they can give you an introduction. I learned to ask around as you
never know where a supplier, friend, neighbour or fellow business owner might have got the money to refurbish the
toilets or do the extension. I heard about the company who provide my cash advance through my furniture suppliers.
Brokers specialising in small business finance are also a very good source of assistance.
3)
Acquiring finance in the current economic climate can be a daunting task with seemingly few options available to
small and medium sized businesses looking to build or expand but I’ve learned to be brave and get educated about what
is out there. The names of the new alternative sources of funding sound unfamiliar but that doesn’t mean they are not
bone fide. Challenger Banks, Business or Merchant Cash Advance providers, peer-to-peer lenders, crowd funding,
specialist invoice discounters and the like are keen to help well-run businesses. Find out what’s out there and learn
how they work then you will be more prepared when you start speaking to them about your needs.
4) Use common sense – it seems obvious but I became very aware that I needed to be comfortable with who I was
dealing with. That meant that I needed to know that my lenders were either regulated (most probably by the FCA)
or affiliated to a regulated entity. I know some types of finance are not regulated per se, but that need not necessarily
stop you if you first check if the company is well known and has a good reputation. If you are looking for assistance
from a broker, then always check that they are members of the NACFB. The other common sense rule is, as far as possible,
to try and compare at least two sources of finance, their rates, fee structures and general try and gauge whom you feel
most comfortable with and whom you would like to work with.
5) I’ve learned to try to plan ahead and not leave raising a loan until the very last minute. If, like me, you have a
healthy history of credit and debit card payment transactions and there is no reason why the future shouldn’t be the
same, then some cash advance providers can make a decision and release cash to your bank in as little as 5 to 10 days
but many others need a lot longer. Now I have found a lender that suits me, I am finding that it’s even easier and quicker
to sort out further cash advances when I need them. We all know each other and things are processed faster. I’ve found
that, although it seemed that an option like a cash advance might be expensive at first glance, in fact there are no fees,
legal fees or valuation costs to consider.
6) I’ve learned that I need to be able to articulate my vision for my business so I can explain exactly what I want a loan for
and how it will be paid back. I’ve found that it works best if I ask for funding in order to boost the strength of my business
such as refurbishment and expansion (advertising or purchasing additional stock would also work well). So far, I’ve used
funding from business cash advances to improve the layout and look of my hair and beauty salons as well as to open my
third salon and I’ve seen turnover increase by around 20%. I’ve also discovered that it suits me best to have repayment
set against a daily percentage of my businesses takings and a repayment cycle that follows my cash flow, so when my
takings are low I pay back less and vice versa. I find this so easy that I am freed-up to get on and concentrate on running
my business. Sometimes I have not even realised that I have actually come to the end of my repayments.
7)
The most important thing I’ve learned is not to give up on my dream just because the bank wouldn’t support me.
I have my sights set on a fourth salon for this year. I am building my brand and have found an alternative finance partner
to stand alongside me.