David Bunker talks to Jack Gocher about investment, acquisitions and the British Business Bank Growth Guarantee Scheme
Compass Business Finance began in Mark Nelson’s garden shed in 2005. Today it’s one of the best-known finance names in UK print. Director and co-owner David Bunker joined Eye on Display in the podcast booth at The Print Show to talk about how print businesses are funding growth in an uncertain market.
“We’re a UK independent finance company based in Kent, and we lend our own money. We’ve built a significant portfolio in the printing industry and a couple of others, but print is our home. We have the largest team in the UK dedicated to supporting customers and suppliers in this industry, and we feel part of its fabric,” says David.
Investing through bad news
David bought into Compass in 2019, just before COVID, and remortgaged his house to do it. He has a lot of respect for how the industry has come through the years since.
“When I was studying economics, the UK had a boom every ten years and a dip every ten years. Those business cycles don’t exist anymore. Manufacturing and print businesses deserve a medal for what they’ve come through since the financial crisis. What I’m passionate about is the positive change, the technology coming from the manufacturers and the work people are doing on their processes and efficiency,” explains David.
COVID forced many businesses to look hard at how they work, and that thinking has stuck. “People were saying turnover is down 40 or 50 per cent, I’ve got five machines and I need three. Now they’re looking at energy saving and detail like compressor lines. Business owners are entrepreneurs and they want to grow. Even when energy costs and government policy are question marks, people still want to invest,” he says.
Growth and acquisitions
Compass is now heavily involved in mergers and acquisitions, introducing like-minded companies to each other. It helps owners prepare a business for sale and helps buyers work out what they need to make an acquisition.
David says, “Entrepreneurs always want to add value and eventually see it realised. The government is doing a far more positive job than ever gets reported. The British Business Bank supported businesses through COVID, and its schemes have now become the Growth Guarantee Scheme. It gives accredited lenders like us some protection, so we can say yes to a proposition and support the business. That really is an enabler for investment, whether it’s buying equipment or buying another company.”
Talk early
Alongside its own lending, Compass works with a panel of around 30 lenders. Between them they cover asset finance, invoice finance, cash flow loans and commercial property. David’s advice is to start the conversation before you need the money.
“A lot of people see us almost as a non-executive board member, because we’re invited into discussions at such an early stage. With energy uncertainty and the possibility of interest rate rises, early conversations are really valuable. We can look at existing facilities, reduce the interest people are paying on agreements and create extra headroom,” he explains.
He thinks the industry shares knowledge far more than it used to. “We share what we see from businesses that are trading very well, and we can talk honestly about the mistakes people make. There are no medals for making mistakes, so people are interested in shared knowledge. That’s coming back to the family feel of this industry,” says David.
David concludes, “The British Business Bank uses a word I love, additionality. It’s the question every business should ask before it invests. What is this actually adding to the value of the business?”