“URICA was such a unique offering”

Creator provides a fully integrated solution for digital marketing services, managing sizeable customer databases and the targeted marketing communications of global corporations. It has grown rapidly on the back of a digitizing economy. This success fuelled expansion has forced the company to navigate the issues common to growing companies such as office relocation without any support from the banking sector, which find the intangible nature of the firm’s products and assets hard to account for.

“There’s massive opportunity to grow further still,” says Neil Jarrold, Finance Director at Creator. “I joined the Company to look after the accounts and finances when Creator was in its infancy and at that time we were just six people operating from a small basement office. Today there are 133 in the Creator team and our new offices in Westminster occupy over 14,000 square feet. Our expectation for 2015, is for a further 30 people to join us.”

“We have always grown Creator organically. We have never before used sources of external finance and we have naturally been very prudent in our expenditure,” says Mr Jarrold.

However, the company reached a “tipping point” in terms of growth when it outgrew its previous premises. It faced an overlap on the deposit of its previous premises, a sizable down payment on the new offices and significant fit-out and redecoration costs.

“All at once we were seeing a significant increase in our resource requirements,” adds Mr Jarrold.

Initially, Creator approached the banks to see what options they could provide, but was disappointed by their response. All the help the company was offered during this period of quick growth was an extended overdraft facility.

“…The banks have an issue with what we do, because what we do is not tangible…”

“The banks have an issue with what we do, because what we do is not tangible. We provide a service, so if the client doesn’t pay there’s nothing to recover,” says Mr Jarrold.

He also feels that the banks have turned their backs on lending to SMEs over the last few years. He does not believe that borrowing is being held back by a lack of demand from small and mid-size businesses; he believes there to be a lack of suitable financing options.

“Businesses do want to borrow to expand. There are plenty of businesses out there that are ready to start growing and need some resources to do so,” he adds. Invoice discounting also presented problems for Creator, because the company operates mostly on retainers, which did not sit well with the discounting houses’ systems.

“URICA was such a unique offering because we had immediate access to a nice healthy credit limit, which enabled us to get through this growth period,” says Mr Jarrold. “There was a short-term need. Going forward, we anticipate it to be less of a necessity, but we will nevertheless continue to operate with the URICA platform simply because in January of this year two of our major overseas clients imposed upon us extended credit terms, from 30 to 90 days.”

“…URICA was such a unique offering because we had immediate access to a nice healthy credit limit, which enabled us to get through this growth period…”

Because Creator serves large multinationals, it, like many SMEs, has very little leverage in negotiating these payment terms.

“At the time, these were our second and third biggest clients, and both of them forced us to accept extended terms. They’re doing it because they can and it improves their own position. It’s simply business sense for them,” says Mr Jarrold.

However, using the URICA system, Creator has been able to cope with these payment term and growth pressures whilst protecting its supplier relationships – because it gives suppliers the option of getting paid early through URICA while absorbing its own clients’ difficult terms.

“URICA has solved two problems for us: one short term and one long term. It’s enabled us to move into a property three times larger than our previous space and to feel comfortable dealing with that growth whilst facing the extended payment terms problem,” says Mr Jarrold. “Ultimately, it has meant that we can continue to provide the services and results that our clients expect from us”.

Related articles: