Specialist lender Shawbrook Bank has built an SME loan book of over £1.5bn across Corporate Leverage, Asset Based Lending & Financial Sponsors.
Chris Walton, Shawbrook’s head of corporate leverage, spoke to Insider editor Simon Keegan to describe how his team structure leveraged finance facilities to support businesses with growth and acquisitions as well as succession planning and ownership transitions.
Chris Walton, Shawbrook’s head of corporate leverage, spoke to Insider editor Simon Keegan to describe how his team structure leveraged finance facilities to support businesses with growth and acquisitions as well as succession planning and ownership transitions.
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00:00Hello, I'm Simon Keegan. I'm the editor of the Northwest Business Insider. And as we
00:15go into 2025, I'm joined for a special business interview with Chris Walton, the head of corporate
00:23leverage at Shawbrook. Hi Chris. Hi Simon, good to meet you. So tell us a little bit about your
00:30role at Shawbrook, Chris. So I head up the corporate leverage team here at Shawbrook,
00:35which is essentially the cash flow lending team that looks after
00:39earnings managed businesses across the UK. We're providing cash flow based leverage finance
00:43products. Yeah, so we're heading into 2025. It's been an interesting couple of years really,
00:50hasn't it, in business and the wider economic climate. So how do you see the market
00:58looking in the new year? Yeah, so we are positive about 2025. It's been a turbulent few
01:04years, as you say. I'd say sort of cautious, optimistic. There are clearly challenges on the
01:09horizon for our clients, for SMEs in particular, with the forthcoming national insurance
01:14increases and minimum wage in particular. But generally, I think when we're talking to
01:18clients and advisors across the market, I think people are feeling upbeat about the opportunities,
01:23challenges to navigate, particularly to see how those cost pressures will be navigated and
01:28whether people are able to pass through those pressures in terms of the prices that
01:33they're charging to their own clients. I think if we look across the business as a whole and
01:38the market in the UK, I think people are feeling that there are definitely opportunities. We are
01:42largely dealing with event-driven financing, so where there's a change of ownership or sort of M&A
01:48that's taking place, I think people still remain positive about this resilience of the UK
01:53economy, despite some of those headwinds overall. Yeah, so you say that you're dealing
01:58with that kind of event-driven, so this is businesses that will come to you and say, look,
02:04we're looking to maybe acquire another business or something of that nature. So where do you
02:10kind of fit into that landscape and what sort of situations will a business come to you,
02:18rather than perhaps a more mainstream lender? Yeah, so I think as we've seen over the last
02:24sort of 5-10 years, the specialist lending businesses like Shawbrooke are really sort of
02:30fulfilling a need as the more traditional high street banks have pulled back from some of those
02:35growth-orientated SMEs, either because they feel they're looking for slightly more vanilla credits
02:41or just the size of the SME market and the size of the deals isn't as attractive to the
02:46traditional lenders that are trying to focus on, I'd say, those more vanilla, slightly larger
02:50transactions. And therefore, the role Shawbrooke provides in the ecosystem is, to my mind,
02:54really critical around helping those growth-orientated SMEs that are perhaps less
02:59straightforward, less vanilla credits, that are looking to particularly around M&A or for the
03:04owner-managed businesses where you've got owners that are perhaps coming towards the end of their
03:08career, have built the business and are looking around change of ownership, exit solutions, and
03:12Shawbrooke can really assist in providing the financing to facilitate, whether it's the
03:16growth strategy or the sort of transition for owner-managers looking to exit. You've changed
03:20some of your sort of divisions and your focuses, so how's that going to help with that?
03:26What's the plan there? Yeah, so my team at Shawbrooke, we recently reorganised to bring
03:31all of the owner-managed cash flow lending businesses together into a single team, and the
03:36view is that bringing that specialisation and focus will allow us to really improve and
03:40increase the service we deliver to our clients. And we found, as the bank and the organisation
03:45has grown and developed, we've seen a lot of success over the last five, six years with our
03:49cash flow proposition, but we had it scattered in a few different teams, and the view is bringing
03:53it all together into a national team will really allow us to get that sort of concentration of
03:58expertise, which we think will allow us to deliver faster and better for our clients.
04:02And so will it, you say faster and better for the clients, do you think it'll be,
04:07you know, what else will it mean for the clients? Will there be new products on offer?
04:11So I think fundamentally the proposition and what we're looking to deliver isn't changing,
04:14you know, what we're really trying to do is the professionalisation and ease of use for
04:19our clients, you know, should be, you know, that bit smoother. Yeah, we know event-driven financing,
04:24you know, M&A, particularly for owner-managed SMEs, it might be the first time they've done a
04:29major financing event, the first time they've done major acquisition, and therefore having a partner
04:33in a specialist lender like Shawbrooke is really important, and therefore our view is having that,
04:37someone who can hold their hands and work with them in partnership to navigate through that process
04:42is what we're trying to bring to bear, and our view is the team in terms of its new focus will
04:46allow us to go from strength to strength. That's the thing, isn't it? Often even if it's a really
04:52experienced business owner, often they'll find themselves buying a business for the first time,
04:58selling a business for the first time, you know, even with all of that experience, they can still
05:03be quite new to some of these processes, can't they? And as you say, if it's slightly, I think
05:10the phrase you used was less vanilla, they need to look at perhaps a more sort of bespoke solution.
05:18Absolutely, and that's kind of what we pride ourselves in bringing, you know, part of the
05:21reason I've been doing this for nearly 20 years, and one of the reasons I love my job is I love
05:24working with businesses, with owners around understanding their sector, and they are the
05:28experts to how they run their business and how they operate within their market. You know, what
05:32we bring is that financing expertise, which particularly for businesses going through, you
05:36know, first major acquisition or first major financing event, you know, they might need a bit
05:41more support and guidance around, you know, that element of it, and that's where I think we really
05:44bring that specialist expertise to help, you know, bring our knowledge around finance and lending
05:50to their expertise around the business, the market they operate within.
05:53So something Shawbrookes has been known for is that kind of personal approach, and it can't be
06:00one size fits all, can it? What you don't want is, you know, that kind of, I always use that phrase
06:07from, it shows the generation of TV I grew up with, computer says no. You don't want that kind
06:13of thing, do you? You want to look at the individual stories and the individual circumstances. Is that
06:19still really important to you going forward, that personal approach?
06:23Absolutely. We, cookie cutter kind of banking is not what we do. It's every business is different,
06:29have its nuances, and we know when we're looking for entrepreneurial, you know, growth-focused
06:33clients that we can support, that, you know, we know there are going to be bumps in the road.
06:37It's not going to be a linear sort of straightforward climb. It's, and that's kind of the
06:41specialism we bring is around understanding that every deal, every client, every business is
06:45different, and therefore finding the right solution that works for them, and having a
06:48partner in Shawbrooke that can go with them on that journey through the ups and, you know,
06:52sometimes the downs that will happen when, you know, businesses are trying to navigate into
06:56new markets or into, you know, sort of new territories, new products.
06:59I suppose that's the key as well. You don't just want it to be a one-off lend, do you?
07:03You want to be with them, as you say, on that journey, don't you?
07:06Absolutely. It is about having that close relationship with the business and working
07:10with them as they, both the initial financing event, but really, you know, where we find,
07:15you know, our proposition resonates most firmly with clients is where they are looking to,
07:20it's not just, you know, the immediate deal, the immediate financing. It's about
07:23the journey they want to go on, the growth aspirations they have for their business,
07:26and having a lending partner that can grow with them, can provide, you know,
07:29follow-on financing or is there for, you know, the next event, you know, what might be one,
07:34two, three, four years down the line. And that's where we particularly find some of
07:38our more traditional competitors often struggle, even if they like a deal on day one. It's having
07:42the, you know, the confidence to be able to follow and back the management team on the next deal,
07:46on the next opportunity, and having a partner, you know, that the management team knows is going
07:50to be there with them on that journey. So, do you find that you've got these
07:53kind of businesses that you've worked with for the long haul, you know?
07:57Yeah, absolutely. As I say, we've been, you know, we stood up the cash for lending proposition,
08:02sort of, 2019 across Shorbrooke, so just before, just before COVID, which was interesting timing
08:07with hindsight. And we've seen, you know, a lot of, you know, businesses that started with the bank
08:11back in 2019 that have grown with us and, you know, we've grown on that journey with them.
08:15And that's a real, you know, joy to see, you know, some of those businesses on that trajectory and,
08:19you know, new clients that we brought on board, you know, more recently that we have, you know,
08:23very excited to work with them as they progress through their own trajectory.
08:27Yeah, so talking of their growth trajectory, what about your growth trajectory? You know,
08:33what is the future for Shorbrooke and where do you see your business growing to?
08:39How high can we go, I suppose? So, you know, we have big growth ambitions now. We've seen a lot
08:43of success over the last, sort of, five years in terms of the various cash flows, the propositions.
08:48Our view is that by bringing the business together into this new dedicated team,
08:52you know, we will, you know, accelerate and see further growth. So, you know, we're very focused
08:55on, you know, across the key regional hubs that we support and driving our business forward as we,
09:00you know, we grow with our existing clients and look to bring new clients on board as well.
09:04Fantastic. Well, Chris, thanks very much for joining us. And as with any of our videos,
09:11if people want to know more, check out insidermedia.com and you'll see all of the latest
09:17news from Shorbrooke, I'm sure. And thanks for joining us.