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John Davies has a passion for helping businesses thrive and grow by providing much needed funding where possible and sharing his hard earned business lessons. As the founder of The Just Loans Group PLC, he is focussed on help-ing to bridge the funding gap that has restricted the growth of British industry. The Group helps businesses to invest and grow through its three subsidiaries, Just Cash Flow PLC, Just Finance Loans & Investments PLC and Just Bridging Loans PLC

John draws on his 30 plus years of experience gained through founding and running a number of companies, to give guidance to existing and potential business owners. We learn more about his incredible business journey...

Ok, so let’s start with your brand name… no secrets in what you are providing I take it…As it says on the tin, we are The Just Loans Group, an accessible, responsible lender set up to help businesses invest and grow. We launched in 2012 after identifying a clear opportunity to help SMEs by providing a real banking alternative to the existing incumbents, helping to bridge the funding gap that has restricted the progress of UK businesses to date. What gap in the funding and investment market did you identify with prior to launching Just Loans?

For most SMEs the traditional route to finance is through the high street banks. However, since the 2008 recession hit hard, getting funding has become more difficult. The economic climate has seri-ously impacted the lending market and many SMEs are unable to reach their full potential. Traditional banks are having to move at a slower pace due to challenges with their legacy systems, which has left gaps for alternative lenders, such as ourselves, to fill by harness-ing the power of FinTech.

This isn’t a critique of banks – I believe they will continue to play a major role in servicing SMEs for a long time to come, but as businesses and consumers alike become more demanding, they will need to be increasingly open to collaborating with providers like us in order to find smarter ways of working.

FinTech innovation has enabled us to provide SMEs with a seam-less, simple and uncomplicated lending service that they can access how and when they want – for example, our BusinessPlus Prepaid MasterCard® Card gives businesses access to credit at point of sale, while our mobile app helps them manage their finances on the go.

You have three subsidiaries providing financing services, can you tell us more about them?To deliver our real alternative to business banking, we operate The Just Loans Group under the following three firms: Just Cash Flow: a secure, flexible, revolving credit facility similar to an overdraft; Just Bridging: a platform which provides specialist second charge lending in the commercial property sector and lastly Just Finance which takes an equity investment in companies in conjunction with longer term loans, with repayments to suit the customer’s business profile. What was the concept behind the brand identity of the ‘Just’ Group? The name actually came to me on the train - I was trying to think of a name and thought to myself it’s “just loans” which is when I had the very logical idea to name the business The Just Loans Group!

As we evolve and are looking to reposition ourselves as more of a brand, there is the worry that our name will restrict what we do but this hasn’t been a problem for Carphone Warehouse so I’m confident it will continue to work well.

JUST LOANS

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You provide funding facilities to small businesses, what are your thoughts on the lending policies of Banks to new start-ups?For SMEs applying to their bank, it’s well known that it can take weeks to get an appointment to apply for a loan and many more weeks to get an answer. We have looked to change that and review initial finance applications in under ten minutes, giving unsuccessful applicants the chance to move on quickly and look for alternatives or focus on improving their credit worthiness to support future applications.

We have invested heavily in developing a proprietary platform called PropensityPlus®, a scoring system that uses technology

to gain insight into the propensity for both the directors and their businesses to be successful in the future. Propensity-Plus drives a comprehensive underwriting module that uses a wide variety of current and historical data points, many of which are not used by traditional banks or other lenders. The ‘Plus’ comes from highly experienced underwriters

insightful questioning designed to give them a good understanding of the business, the directors and their objectives.

The irony is that this is how business banking should and used to be – timely, supportive and knowledge-

able. There shouldn’t be weeks of waiting to find out your application was unsuccessful and you should be able to speak to somebody from the bank who is genuinely interested in your business and has the time to give you direction. However, over time, traditional banks have felt the burden of

their legacy systems and em-braced centralisation. You have over 30 years’ expe-

rience in the Finance sector… what have been some of the

highlights?One of my personal career highlights

was in 1992, at the age of 31, when I was awarded a CBI Effective Communi-cation Award for my work in promoting the benefits and protection of the Con-sumer Credit Act to the general public.

More recently, I was honoured with two awards at the Business Moneyfacts Awards

earlier this year. The awards praised our Busi-nessPlus Prepaid MasterCard and WageRoller

products for the innovative and new way in which they are helping businesses.

What made you decide to launch your own business?Entrepreneurship has always been in my blood. I started my first business at 21 and by the age of 26, had sold it to Bowater PLC. The company then retained me as a divisional CEO and it was

during this time that I began to understand the importance of financial management.

I clearly remember being enrolled on a course for financial directors in my first few weeks at Bowater titled ‘Cash is King’. I sat there, wet behind the ears, listening eagerly to the Professor carrying out an incredible educational course that showed me the importance of cash for a business. If there’s no cash flow, it doesn’t matter how profitable you are, you will go out of business. It was a lesson I have never forgotten and the premise on which The Just Loans Group was founded.

Do you think people have an inner critic that holds them back?To an extent yes, and there are plenty of talented people who should go into business but don’t. Equally, there are a lot of un-prepared individuals who jump straight in without thinking through the risks involved. I think it’s important to remember you simply can’t be the master of everything. In order to achieve success, you have to have a great team full of people who are specialists in their respective fields. A business needs people who are pas-sionate about the company and have a clear vision of how their role contributes to the overall business strategy. This gets the best results out of everyone.

How can a business owner improve their confidence?Be adaptable - it is often a change of pace that catches people out. Take counsel from others who have done similar things and let them help you. Having partnerships is key in business; it is crucial to adapt to new ways of doing things but you also can’t replace life experience and this is where others’ expertise is incredibly useful. You can have all the good ideas in the world but if you can’t execute them, they’re useless. There’s the expression of a ‘soothsayer’ which is very apt; in business you need those who will make you aware of the bad news. You have called for there to be a formal qualification before a person can hold the office of a Director… Do you think this would increase the survival rates of a new business?Definitely. As the RSA report from October 2014 showed us, more than half of UK start-ups fail in the first five years and I believe a lack of business education and preparation is the key reason behind this shocking statistic.

The truth is, when many people start up, they struggle to navigate the daily complexities of corporate life. I strongly believe that education would increase the survival rates of a new business as it would help individuals understand how to prevent failing in those early stages. It doesn’t have to be a three year course, just a consolidated three month qualification that business owners could study for, part-time, alongside the day-to-day running of their company.

Looking back, I wish I’d had more business know-how under my belt when I first started out. Creativity and determination are great attributes to have as an entrepreneur, but it’s the basics where a

lot of business owners fall down and I’m sure I would have been able to avoid a number of costly mistakes if I’d known more back then. What are the contributing factors to the high level of business failure rates in the UK?A lot of businesses fall victim to the pitfalls of setting ambitious fore-casts which are built on hope and not fact. An insufficient amount of preparation from business owners also contributes. We’ve reviewed hundreds of loan applications in our time, and as part of our process we ask for a simple business plan - just a page or two explaining what the business does, why it needs funding and what the numbers will look like, such as amount of sales, cost of sale, product costs, fixed and variable costs and so on, but people often struggle to articulate that. It is essential to know the fundamentals as a business owner to be able to execute your strategy.

The amount of red tape that a business has to deal with is a common complaint… do you think the Government can do more to assist business owners? Probably not as politicians have little knowledge of how SMEs oper-ate. There are many schemes set up by the Government that are well intended but unfortunately don’t often deliver what they set out to.

What advice would you give to anyone struggling with managing their cashflow?For many SMEs, efficiently managing cash flow can mean the differ-ence between success and failure. Firstly, I would advise anybody to put together a cash flow forecast week-on-week to plan ahead, determine your financial position and predict when you might run into difficulties. Make sure you are invoicing throughout the month and monitoring your debtors on a weekly to fortnightly basis to give you time to chase late payments.

Make sure you bring in some experts too – I can’t stress the impor-tance of cash to your business so ensure that you recruit the right people to support the financials. How have you utilised social media in your promotional mix?We certainly have, our Head of Social Engagement looks after all our social channels including Twitter, Google+ and LinkedIn, which we see as a vital part of the marketing mix. But again, better to bring in an expert – it’s an area fraught with risks!

Where do you see the Just Loans Group brand developing over the next 5 years?We have an exciting period ahead of us. We have recently appointed

an incredible Non-Executive Director to our board – Susanne Chishti, a FinTech expert and CEO at the FINTECH Circle. We also recently announced two new innovations to our offering that are kick-starting our growth: our BusinessPlus Prepaid MasterCard® Card from Just Cash Flow PLC to provide businesses with a credit line and repay-ment flexibility, a European alternative lender first. And our mobile app, which allows customers to manage their finances on the go offering flexibility for time-starved business owners.

As we develop, we will continue to add to what we can offer busi-nesses, identifying their challenges and responding to them with our innovative solutions. We are only at the beginning of what can be achieved and I am pleased to be a part of the FinTech sector that is leading the way for UK SMEs.

Which entrepreneurs do you admire and why?I admire entrepreneurs that create successful businesses and still have time to share the lessons they have learnt along the way. A prime example is Theo Paphitis, most famous for being one of the business investors on the Dragons Den TV programme. From humble beginnings he has built a number of successful businesses and I like the fact he is a natural salesman, with a reputation for straight-talking.

Most of all I like the fact that we have something in common - we both promote the importance of cash to a business. He recently likened a lack of cash flow to a heart attack for a business - I couldn’t agree more. If you could give one piece of advice to a new start up what would it be?Before you decide to go ahead with anything, stand back for a second and ask why you’re doing it. It is also helpful to read the book ‘E-myth’ (in my view probably the best advice you can get before starting out).

Being in business can be lonely, painful and the chances are stacked up against you, so consider exactly what you’re doing before you make the leap. Once you have a plan, go and run it past somebody else – not your family or friends, but somebody who has run a suc-cessful business and give proper feedback.

Then, learn your numbers and then re-read ‘E-myth’.

Again, education is key for any new start-up. We’re so adamant about this and helping new start-ups that we’re currently developing plans to offer guidance to the start-up community, so watch this space.

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BEING IN BUSINESS CAN BE LONELY, PAINFUL AND THE CHANCES ARE STACKED UP AGAINST YOU, SO CONSIDER EXACTLY WHAT YOU’RE DOING BEFORE YOU MAKE THE LEAP...