Chordal Green
FOUNDATION EAST LOAN SECURES A FUTURE FOR FURNITURE BUSINESS
Financial help has knock-on effect for young apprentices
A small loan from the community-finance organisation Foundation East has allowed Mark Rutty and Vince Glue to expand their business through tough times, and they are now equipping two young people with the skills they need to become valuable members of the UK workforce.
From its workshop in Harlow, Essex, Chordal Green creates stylish and unique furniture, taking projects from the drawing board into reality. But when seeking finance a few years ago, the fledgling business had found banks obstructive and poor value. This is where Foundation East, which bases its decisions on the individuals and their business plan and not on a credit rating system, stepped in.
Vince says: “The help from Foundation East has allowed us to grow our business and our workshop enough for us to take on two apprentices, which was a major development for us in 2010. There can be very little support for anyone wanting to offer apprenticeships, but we know how valuable they are to young people.
“We’re really happy with our apprentices - they are both diligent and hardworking. I believe that the skills they are developing with us will stand them in excellent stead for their future career.”
Apprentice Ricky King says: “I know that there is a real career for me here. I really enjoy making furniture, and as the business grows there will be opportunities for me to progress, take on more responsibility and earn more.”
When Vince and Mark graduated with degrees in Furniture Design they had no idea that just a few years later they would own a thriving business making bespoke kitchens and furniture. In 2006 Vince was working as a designer for John Lewis when Mark put forward the idea of founding a business. He had realised they had complimentary skills – Vince is a designer, Mark is a cabinet maker – and together these are the skills needed to make a successful furniture business.
Vince says: “We fit out lots of private houses – designing and making cabinets, kitchens, wardrobes, and all kinds of furniture. We take care of everything from the initial ideas to creating and installing the finished products.”
Their reputation is growing, and the quality of their designs and workmanship means that personal recommendations have brought in more customers and allowed the business to grow. Vince says: “We have some very loyal clients who we enjoy working with, including the very first family we did a job for. They have since recommended us to several friends, one of whom wants furniture for a house in Monaco!”
When they had been in business for about a year Vince and Mark needed to expand their workshop and so looked into a business loan.
They applied for funding from lots of banks but found it very impersonal, and at one point were refused even a small overdraft. Vince says: “We found that you could talk to someone at the bank for an hour, but then the computer just said ‘no’. There didn’t seem to be a person making decisions, and we were quoted such high rates of interest that it simply wasn’t worth doing.”
But the pair were determined to continue with the journey they had started on, so applied to Foundation East, a not-for-profit membership society that that provides loans up to £50,000 to individuals that have a viable business plan and cash-flow analysis but that have been refused bank finance.
Vince says: “The main difference with Foundation East is that we talked to a real person. Peter Wood came to visit me and Mark so he could see our potential and not just some numbers on a spreadsheet.”
The loan helped them to spend six months setting up their new workshop at a time when the economic situation left them with fewer customers. The new workshop is five times the size of the original one and they now have an office. They also expanded their machinery and bought a new van to deliver their furniture.
Vince says: “I’m really pleased with how far we’ve come; we haven’t stopped moving forwards.”
As Vince and Mark discovered early on, one of the challenges of running a small business is dealing with late payments or anyone who defaults on payments. This is one of the times that finance from Foundation East can help. Peter Wood, Business Loans Manager, says:
“We offer 'safety-net' loans which can be used to cover shortfalls in cash flow, for example to pay suppliers upfront when there’s no credit facility available with the supplier. We know that there may be times in a businesses development when there is a temporary cash flow problem which can be easily overcome.”
Vince still has plans for his business to change and grow. He says: “We’ve seen a niche to expand our business and are now working with Foundation East again to drive this forward.”