Black Country funding body helps manufacturing firm

A BLACK Country funding body has helped a Coseley manufacturing company grow out of the recession.

The Black Country Reinvestment Society (BCRS) the Wolverhampton based not for profit loans company, helps SMEs struggling to access the funding they need in order to grow.

It has now given help to Wraight Handling, based on the Cannon Business Park, Coseley, which designs and manufactures tube-based mobile safety devices and handling equipment.

The products, which include steps, dollies, stands, hoists, tilters and automatic grips are sourced from the UK and distributed to customers from within the UK and Ireland.

The original company, F L Wraight, was established 60 years ago. Managing director Gerald Robinson, a qualified engineer with a background in manufacturing consultancy, bought the business, which employs nine staff, in 2006.

He said: “We’ve come through this severe recession but it presented us with a cash flow problem as our business is seasonal.

“We supply a lot of schools and local authorities and the long holidays mean that purchasing departments don’t buy heavily at certain times of the year.

“Sales had dropped, and very quickly the cash reserves that would normally have carried us through quiet period were depleted.”

He said deployment in the supply chain was still pessimistic and suppliers were not willing to offer support and credit terms.

“It’s not possible to re-source easily and people now want to work on a pro-forma basis, hence there is more pressure on cashflow,” added Mr Robinson.

“We have had a couple of bad debts caused by companies collapsing, and credit insurance has become more difficult to obtain.”

In a tale familiar to scores of businesses across the region, he said the banks had not been very supportive.

“I believe they treat us [manufacturing businesses] as a dying sector and high risk. We couldn’t borrow from our bank and had a very small overdraft.

“I was introduced to Black Country Reinvestment Society by Richard Mason of Ludgate Finance, and we’ve been able to borrow £30,000 from BCRS over three years.

“This has enabled us to take on a new staff member and we are considering taking on another to develop and drive sales. In addition we are investing in the future by training two apprentices,” said Mr Robinson.

He said the BCRS loan would help the firm move on as the recession lifts.

“It gives us the breathing space to concentrate on the business, source the best suppliers and increase sales.

“When you are simply running cashflow, it becomes a very negative environment to operate in as you are chasing your own tail. The loan gives us the opportunity to manage the business and plan for future growth,” said Mr Robinson.

He said he was hoping that as the recovery continued more opportunities to increase sales would materialise.

Richard Mason, director at Ludgate Business Finance said: “This is a seasonal business, and like most seasonal businesses, Wraight had cashflow issues.

“I was already familiar with Gerald’s business so we looked at the problem from several angles and thought it was a good fit for BCRS. I’ve worked closely with BCRS and their clients over the years on several deals and this is typical of the ones we’ve completed.”

He said he could see the business was profitable but it was struggling because of a lack of finance.

“The finance from BCRS has helped underpin the cashflow and to smooth out the financial peaks and troughs of running a manufacturing business.

“Wraight has an excellent product, a good past, has been affected by the recession but now has a strong way out of it. The banks couldn’t help but BCRS saw the strength of Wraight and the company now has a future.”

BCRS recently celebrated its small business loan fund reaching £5m. It has announced plans to extend this to £10m within two years.

Steve Grice, business development manager at BCRS said: “Wright Handling is a viable business with a full order book. BCRS has a lot of experience with this type of business and seem to be the only financial institution in the Black Country that is assisting the manufacturing sector at present.

“Once we looked at the figures it was clear that Wraight’s problems were merely a short term issue. We knew we could assist Wraight in getting to where it needs to be, thus securing the future of the business. Gerald is now creating jobs and has two new clients.”

Picture Caption: From left, Gerald Robinson, managing director, Wraight Handling; Richard Mason, director, Ludgate Business Finance; Steve Grice, business development manager, Black Country Reinvestment Society.