Tony McDonough meets STEVE BARBER, director and founder of Bridging Finance (NW)

RECESSION or not, the devil-may-care entrepreneurial spirit still survives – and that is good news for Steve Barber.

Barber, 37, is founder and director of Wallasey-based short-term lender Bridging Finance (NW).

Established in 2005, it provides short-term bridging loans to firms and entrepreneurs of typically between three and 12 months.

Barber’s team can turn around an application for finance in five to seven days, and the loans are secured on property.

He established the firm in 2005 but it has already grown rapidly. It has arranged more than £40m of loans in that time and last year it reported a turnover of £3.8m.

That figure is expected to grow again this year, as Bridging Finance has just secured a new £20m facility.

With this, Barber has launched the Short-Term Business Finance Fund, targeting growth-hungry entrepreneurs and small companies affected by the credit crunch.

The fund will offer loans of between £30,000-£500,000.

“Our clients tend to be entrepreneurs and business owners who see an opportunity and need to move quickly,” said Barber.

“It allows them to do the initial deal and gives them time to get longer-term finance arranged.

“A business might need money for short-term cashflow, to buy stock or maybe to fund a management buyout.

“Or you might get a property entrepreneur who has spotted a good opportunity or wants to buy at auction.”

Bridging Finance will lend 70% of the value of the property. The recent fall in property values has mean the average size of loans has fallen.

However, because there are now more property bargains around and because firms are finding it more difficult to get bank funding, the volume of loans has risen.

Barber added: “The drop in values has not really affected us because a lot of people are seeing bargains in the market and are keen to seize the opportunities.

“We are not a broker. We are a principal lender and our funds come from a clearing bank, private investors and myself. We have just been accredited by the Association of Short-Term Lenders. Yes, we do charge higher interest rates than the banks, but these loans are for a very short period of time.

“You can’t really compare our rates with the banks because they may lend over, say, a 20-year period.

“Our clients usually factor our rates into the capital cost of doing the deal, and we get a lot of repeat business from people.

“Because it is the asset we are lending against, we don’t ask people to produce a business plan and we aren’t too concerned about credit history.

“We help the local economy in other ways, too, because we always work with local valuers and professionals.”

Barber was born and brought up in Wallasey and has recently moved back there with his family. He is married to Helen, a nurse who now looks after the couple’s one-year-old son, William, full time.

He said: “After leaving school, I studied geography at the University of Birmingham but at that point I didn’t really know what I wanted to do.”

After graduating, he went to work for a consultancy called Tibbett & Britten as a management trainee.

The firm specialised in helping to set up logistics and supply chains and Barber’s job eventually saw him working in Dubai, where he helped set up a supply chain for Marks & Spencer, Kuwait and Egypt.

“The firm then put me through an MBA at Henley,” he added. “That gave me a broader grounding in the business which opened up other opportunities for me.”

By 2003, Barber had left Tibbett & Britten and was investing in the property market.

He then set up a commercial brokerage called Business Assistance (NW) which helped companies secure finance from other lenders.

He said: “I saw there were a lot of people doing personal finance and dabbling in commercial, and I saw an opportunity to help small firms get access to finance.

“We grew that business quite quickly, and in 2006/07 we arranged more than £29m in funding for clients. Money was cheap and more easily available then, and clients had high expectations.

“I then saw that if we took some of the best elements from the bridging finance companies we dealt with and set up our own operation, then we could do a far better job.”

And so Bridging Finance (NW) was born. That is now Barber’s main focus, despite still having a significant interest in Business Assistance (NW).

The firm employs around 14 people and Barber himself often finds himself working 12-14 hour days, although he still makes sure he spends quality time with his family.

He added: “A lot of the bridging finance companies tend to be in the South-East of England, and there are some in Manchester.

“We have focused mainly on Wirral, Liverpool and North Wales but we are now looking to expand and work more in other parts of the North West.

“Up until now, we have kept our bridging finance service pretty low-key, but now we have secured new facilities we are ready to take a quantum leap.”

Bridging Finance is obviously prepared to back deals and projects with a higher risk profile than many banks would be happy with, but Barber insists that, although funding decisions are made quickly, a lot of care is still taken.

“There are times when we do turn people down,” he said. “And we have never yet had to repossess a property.

“Because I have invested in property myself, I can make a judgment on whether a deal is good or not. You get an instinct.

“Also, my own money is in this business, so that tends to focus your mind.

“Whether markets are rising or falling, entrepreneurs are always on the look-out for a good deal and, because of this, they are always going to need access to quick funding.”

tony.mcdonough