Flexible Banking Frees Up Growth Potential

Unhappy with the lack of understanding shown by its bank, Advanced Insulation found a more understanding approach to funding with Santander

In brief

  • Company turnover: £22 million
  • Sector: Manufacturing
  • Advanced Insulation PLC supplies products and services to the oil and gas excavation industries. The company has enjoyed fast-growing profits since its inception in 2008.
  • The company wanted to review its banking arrangements in order to support its fast-paced growth, but its incumbent lender was unsupportive, so AI looked to other providers.
  • AI was impressed with the personal approach shown by Santander, and the effort the bank made to get to know the business.
  • The company was visited or called by a number of Santander representatives, while the Regional Director of Trade Finance helped the company obtain an overseas bank guarantee.
  • Having already provided the company with a mortgage, Santander provided AI with a working capital facility that freed up its cashflow to take on more orders.
  • With restraints on cashflow removed, the company is now free to grow its portfolio of contracts.
Advanced Insulation

Advanced Insulation (AI) PLC is a world leader in the supply of insulation products and services to the oil and gas excavation industries. Its two main product lines are an insulation coating for subsea structures and a passive fire protection coating for oil rigs that helps reduce fire risks. The company’s fortunes have soared since its inception in 2008, with global sales growing by 700% and profits by 1,250%.

With an eye on enabling its growth plans, AI wanted to review its arrangements with its existing bank, but after discussions were unable to extend their terms. AI then turned to Santander for support. “They provided us with a working capital facility, so we have an overdraft and a contract finance line,” says Managing Director Andrew Bennion.

“All our contracts have varied payment terms,” Andrew explains. “Santander gave us a structure that helped us borrow by demonstrating future cashflow and drawing down short-term loans against it. This helps when we can’t negotiate good payment terms with customers – it helps us to say ‘yes’ to business that we couldn’t before.”

Getting to know you

The Santander team's hands-on approach particularly impressed Andrew. “They made a considerable effort to get to know the business,” he says. “We had people from the credit team call; the Relationship Director and the Head of Corporate Banking in the UK came to visit us and show that they were interested in what we are all about.”

Andrew recalls how Santander helped him obtain an overseas bank guarantee. “We had to get a guarantee from a bank in Nigeria,” he says. “There was a preferred bank that wasn’t on Santander’s panel but Barry Kilfeather, Regional Director of Trade Finance, went out of his way to make sure there was a correspondent bank that we could deal with and so could issue the bank guarantee to the client.”

Optimising potential

Relationship Director Chris Mears believes it’s all about meeting the company’s requirements. “It was important for AI that their banking partner understood the specific workings and needs of the business,” he says. “We took the time to listen, to evaluate the business and to structure a set of facilities that optimised its growth potential.”

Since re-banking with Santander, AI is now free to pursue its growth plans. “Working capital as a restraint on growth has gone away; it’s as simple as that,” Andrew says. “We anticipate growing our business considerably and can see a scenario in the future where we go back to Santander to increase our facilities with them. We trust that they understand what we do and we believe we’ll get a well-considered hearing.”

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