'Go and see your bank manager' - advice as bank loans dry up

Horticulture businesses hit by the fall-off in bank lending will need to think more creatively about how and where they find funding, says executive adviser Leslie Kossoff.

She urged horticulture firms needing finance to fund critical developments to talk now to bankers to understand the new conditions they will have to meet once the lending crisis begins to ease.

Kossoff said business owners and managers are going to have to make a far better case than before as even when the crisis eases "we are not going to have anything like the fluidity that we've seen before".

"Ask your bankers what it is that they are going to need from you to make the case, so that when funding is available, you can get it."

Speaking last Monday in the run-up to Congress' rejection of the $700bn Wall Street rescue package, she said horticulture firms would need to look more creatively at where money can come from: "Private equity firms are looking hard at where they can invest."

She also advised businesses to "focus on consortia" that could bring attractive packages together for potential investors.

She added: "We're in a holding period until central banks and governments determine what they are going to do."

Kossoff's comments follow the decision of the latest casualty of the lending crisis, Little Dodd Garden Centre, to sell up (see box above and p13).

On the garden industry, HTA business development director Tim Briercliffe said: "We saw a lot of expansion and buying of properties in 2007 and early 2008. That's stopped and people are waiting to see how this pans out. But compared to broader retail, garden retail is in a strong position because many centres are freehold.

He added: "Cashflow is always an issue for our industry because it's so seasonal. The Christmas offer is under pressure as competition rises. No centres need to go under but if you don't manage your business carefully you are at risk."

Garden centres are also facing difficulties with everyday borrowing as they enter a quieter time of year.


Little Dodd Garden Centre in Cumbria has had four banks turn down a request for a £1m loan for rebuilding.

Trelawney Garden Centre owner and former GCA chairman David Danning has been refused funding for a £6m development at Probus in Cornwall. He said he will "revaluate and reassess" the plans now, so they are driven by his team rather than architects. "We want to be ready to steam ahead when we come out of this."

Hare Hatch Sheeplands garden centre in Berkshire has been "let down" by agricultural financer AMC in its plans to fund expansion. Co-owner Rob Scott said: "We just had a problem with AMC, which has been a bit awkward.

"We've been let down so we need to get the masterplan together to be able to show what we're doing and get new funding. We can't get as much as we were hoping for for the current round of developments. It's a circular argument. We need a planning consent to attract concessions but they won't come on board until we get a planning consent.

"But we'll only be able to borrow the money once we have cast-iron concessions on board."

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