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TALKING TO DEMI THE OWNER OF LENDOE A LOSN COMPANY · SliderCuts This Is Ownership Podcast

• 0:00
  SPEAKER_02: Today I have got Demi in the chair and um we're gonna do a mixture it's gonna be cutting hair as I usually do but as well as cutting hair we're gonna talk talk to the client trim talks but in reality this is more like a podcast this is ownership and Demi owns a business but I'm not gonna tell you what business that is he can tell you himself so Demi let us know your name which I've already said and let us know what you do for a living uh so yeah you already let them know my name um and effectively we we help people uh or help business owners particularly fast growing uh business owners act as financing how do you help people get finance for a range of ways so one uh we work with a number of banks impact lenders uh private lenders institutional lenders to effectively act as an intermediary and two we have in some cases for special people like you the option where we often will kind of go into our own balance sheet and we'll provide a loan off our own back so these are loans by the way right this this is not equity this is effectively repayable finance so financing that once you take it you have to repay it back well yeah that's that's yeah that's every loan in it you have to pay the money back it's it's it's funny it's funny how many people we work with right and they're like do I have to pay this back oh they think it's a grunt they well yeah I guess they tend to think it's a grant but yeah we're not we're not standing applause all right so how long you've been doing this for um so I've actually been in like corporate finance lending for the last 10 years or even 15 years you could say um uh but in regards to Lendo in its current form I'll say the last six years full time yes that's it so what's the name of your company Lendo Lendo which makes sense Lendo because you lend but why why is it called Lendo so we obviously I know the beginning part lend because you're lending people money but where did the dough come from do you know what I think at the time we were thinking how can you how can you like bring the two words together right i.e both was it slang len dough I think you're lending people dough yeah no no no it was slang but we thought so so what we were thinking about right is how do you like create a name that is synonymous for money right and also synonymous for lending so it was lend we always wanted to keep lending there and then was thinking what else can we say right it was like lend cash lend money lend man lend do but the thing is lendau was taken on on on like on on um the name was taken so we had to change it to to Len D O E right which is really Lendo E.
• 2:33
  SPEAKER_02: But yeah yeah but what we've done is we've made it Lendo that's how we pronounce it anyway.
• 2:38
  SPEAKER_02: So it's got a silent E we say it's funny because I never actually knew that yeah it's only now I'm asking the question like why is it Lendo and then I worked out saying Lendo is oh yeah you're lending people yeah so that was the that was the concept but what's what's really funny is at that time if you remember because I think at that time we had obviously supported you just with your your new shop right yep at oh so it's not new anymore it's about eight years old but we was actually lending only from our balance sheet so we wasn't working with banks we wasn't working with other finance institutions we're just lending from from our balance sheet directly to uh small businesses or small business owners shall I say so we was actually the the the what we were the the action was we was lending dough yeah right um so that's why the name made a lot of sense at that time but obviously things have evolved since then things have things have changed but we've kept the name yeah that makes sense that makes sense lend dough oh okay you learn something new every single day so when did you actually start the business um so Lendo itself was registered in about 2017 or the end of 2016 um but I left work to start the business full time or to kind of get involved in the business full time uh in two end of 2019 oh so was I one of the first people you lent money to yeah so you was you was one of the people we lent money to in under our old outfit right which was underneath another company and that was when I mean that that business just came out of the back of me having family and friend money and just realizing that I can lend it to people and make a return.
• 4:04
  SPEAKER_00: So that in itself wasn't really a business um uh and obviously you were so you was like one of the case studies for why we started Lendo basically because I'm pretty sure we lent you in 2018 right it was 2000 yeah like beginning yeah around the beginning of 2018 because I could I opened up the shop October 2018 and you guys lent me money some point during that year.
• 4:28
  SPEAKER_00: Exactly yeah so so so so you were like a you you you are our pilot basically so where's my shares basically what I'm hearing is I'm owed money or at least give me back my interest you are a proof of concept that this this this could actually work all right so so we're moving on now so you've been doing it now for about nine years around that time yeah but you changed the way you did things because back then when I borrowed money from you guys it was literally you guys were the company you had the money and you lent me the money we signed a contract I paid back the money and that was it but then past that about maybe a year later you got me access to more funding where you connected me with another company.
• 5:19
  SPEAKER_02: Yeah yeah yeah yeah I think at the time it was PCB I believe yeah and yeah so that was again us piloting because what we realized is when was when we was using our own money right my family and friends only had so much money so like for example in that case I I think you wanted close to a hundred thousand I think I lent I borrowed that time about let's just use real figures I think it was around 60 000 pounds yeah around 60 000 pounds and at that time we had a we had a ceiling right on all of our loans our personal like our loans directly from my balance sheet which was 25 000 to be honest we we actually broke that ceiling for you once I think we I think it was 20 000 but we broke it for you because you gave you 20 right you gave us yeah the first time I bought money for you guys when I was opening up the shop it was 20 000 yeah okay cool then when you got me access it was a lot more right it was like 60 000 around that okay cool and that was one of the things that made us realize very quickly hold on a minute we could create even more impact we could support even more businesses if we started partnering with these other financial institutions that had more that had more capital.
• 6:17
  SPEAKER_02: Yeah and our whole thing was never um can we take the capital on our balance sheet or can we take that capital from them and start lending it directly because we knew that from a costing perspective we probably wouldn't be able to get the money as cheap as they would yeah so our whole thing was how do we give our clients the best possible solution and it just made sense partnering with other people who had access to cheap capital.
• 6:39
  SPEAKER_02: And I believe at that time the capital they had access to was like I think it was like seven percent or was was so cheap right in comparison to the first loan that we gave you which was relatively more expensive right and I think that goes into the the the you know one of the things I wanted to to talk about which is you can get different types of money for different types of things.
• 6:58
  SPEAKER_02: You know like opening a store which is in like very in in certain instances can be quite opportunistic because you might be offered a lease and you've got a two month window and you need to get in that lease and put down a three month or six month deposit as soon as possible or you're gonna lose that opportunity.
• 7:13
  SPEAKER_00: In that case you're not gonna go to you know the likes of uh you know one maybe maybe one of the lenders that we work with that can provide long term money at a very low cost because they go through a lot of checks a lot of due diligence and you lose the opportunity yeah but in that case you would go and take up financing from effectively an outfit like us who at the time was doing short term 12 month 24 month overdraft type loans for opportunity for opportunistic basically for opportunistic opportunities shall I say right people that were effectively thinking about I've got this opportunity I want to take advantage of it but I need cash quick yeah so it just kind of goes back to why the cost of financing for the first loan we gave you was very different to the cost of financing for the second loan we helped you access well yeah no it makes sense because obviously I've taken out various loans throughout my life my life and career do you remember that like at the other shop right I remember you know I don't know if you're telling me that like you use your credit cards to buy a house yes yes yes not not necessarily your credit card I didn't use my credit card to buy the house but I got money from my credit card so I couldn't I didn't like go swipe and say yeah there you go gigging you buy the house but yeah I got access I got money from the credit cards and I was like I can't remember that was like maybe about 12 years ago yeah something like that you know I just got money to the I just got access to the money on the credit cards and just like use that for part of the house.
• 8:37
  SPEAKER_00: The house got a lot more so yeah I just was like anywhere I could get money from I need to get the money from yeah yeah so that's what it was and that's that's just been me and to be honest right over my journey the thing I'll say that I've learned and some of the things I'll say that I've done wrong it isn't borrowing money because some people you know because I put out a video recently that went you know all over you know everyone I know seem to have seen this video I message me they're they're messaging me as well they're messaging me as well and they're messaging people I know as well you know and the video was me saying that I am broke then I go into the video just explaining why I'm broke there's a lot of people who maybe haven't seen the whole video so they don't understand it they just seen a part of me saying that I'm broke and they know they're seeing two parts of it they're saying my business brought in a million pounds and they I hear that I'm broke so a lot of people don't understand they're like well how can you bring in that much money or how do you make that much money but you're broke yeah and it's like well if you watch the whole video it explains you know just like the costing and things that I'm paying for and what your business brings in is not what your business profits.
• 9:44
  SPEAKER_02: Yeah it's not the same thing so yeah yeah yeah yeah a lot of time a lot of people just don't understand that when there's businesses out there who say you know my business grossed you know 10 million pounds this year yeah they don't realize that's what the business brought in yeah but what were your profits yeah what were the profits because your profits could have been 50 000 pounds yeah yeah you know someone could have grossed 100 000 pounds and their profits were 70 000 pounds which means they made more money than you but they didn't bring in more money than you as a business but they took home more money than you so I'll explain all of that in the video I think that's I think that's I think that's super important particularly like when you think about loans and interest and how effectively business businesses report on their PL the loans and the interest that they pay out in a year because a business can do two to three three million have a a margin of let's say five percent but when you take out all of the high high cost interest or all of the loans and stuff like that before you know it the business isn't profitable but that doesn't necessarily mean the business is a bad business what it means is often is the capital structure or how that business is effectively leveraging cash be that equity so money that they've generated from profits and left in the business or money they've injected plus credit i.e money taken from other other creditors um how they're leveraging often how they're leveraging that business often isn't optimized to support that founder and I think a lot of women start realizing that um because the government put a lot of loopholes in place they call it a loophole but they put a lot of kind of like policies in place that actually help business owners when they're doing things like taking out insurance or taking out loans in the sense that you you log a profit before you it's called earnings before interest tax depreciation and amortization and it I mean the the the acronym is EBITDA right but the I stands for interest which means that if you take out a loan your business shows it's pro how well it's or whether whether or not it's profitable before you consider how much interest you paid.
• 11:40
  SPEAKER_02: Yeah and not a lot of people realise that so some businesses may have not like in your case may have not made a net profit but actually the business itself when you take out all of the interest you paid in high cost credit actually probably perform relatively well I mean I'm not gonna talk about your numbers because I've seen them but I'm not gonna talk about your hair but yeah it's just something that I I don't mind talking about numbers it's just something that I've noticed it's just something that I've noticed quite often people think and yeah it's definitely something I guess it's something that we all got to learn right how to how to operate and navigate and and leverage cash different forms of cash in the right way.
• 12:14
  SPEAKER_02: Yeah a lot of people just don't understand these things there they just hear this business made this much money so they must be making lots of money and it's like well you know they brought in that much money you know exactly yeah yeah yeah yeah yeah you know and that's another thing there are certain businesses like wholesale or like retail businesses that bring in so much cash I mean they could bring in I mean you see some of them they've got like say 20 million in revenue but their margins are so slim so slim because they're buying products that already that have already been refined and they're selling those products and they can only sell it on for so much if that makes sense.
• 12:49
  SPEAKER_00: So it's also the type of business as well people need to realize that you might bring in 10 million but you yeah yeah you might not be taking on very much yeah and listen what I've kind of learnt in my journey which I said a little bit earlier which is some of the things I've done wrong some of the things I've done right because a lot of people online when they saw some of the video or the clips of the video in their head they're like wow he looked successful but he's doing bad and he hasn't got any money and how could he not have any money but like I said if you watch the video you'll understand but I will say even though a lot of the stuff I've done I'm like I don't regret it there are things when I look back on which I'm like actually if I went back I wouldn't change like if I went back I wouldn't change like getting the loans that I wouldn't change but the way I got the loans potentially I may change because I got a lot more knowledge now and understanding yeah so yeah yeah yeah yeah I said so in the video I said you know I've taken out a lot of like high interest loans right no but the reason why I've taken out a lot of high interest loans is because to be honest I'm quite rash and what I mean by rash is I'm hasty in the sense of I get an idea and I want to start it straight away this is this this is the issue to be honest part of the issue sometimes is me just not waiting it's optimism right yeah so like I get an idea so with me it'll be like okay I've got an idea to start this business right and I start putting in the business plan in my head and being like okay I'm gonna do this I'm gonna do that yeah this could work that could work okay cool all right let's get to it it's gonna cost probably about I might just throw a figure out there and say oh it's gonna cost about 50 000 pounds cool right cool how much have I got I may have I may have five thousand pounds you know I may have 10 000 pounds I may have 20 I may have 30 who knows but whatever it is I got some money I'm like okay cool I need to raise more money I'm like okay cool I'll work that out so I'm I'll just start the business straight away right and then I'll start finding the money as I've already started the idea and this is the issue this is the mistake which I make I don't stop and say okay let me find the money and then start the project and this is the reason why I've taken a lot of high interest loans because a lot of high interest loans give you money last minute but they charge a lot whereas the other companies that do lesser interest yeah it may take three months may take four months there are times which may take five months right but you get the best rates for those companies so whereas it's like right now let's say with a shop refurbishment I did last year it costs like 200 000 pounds over 200 000 pounds when I started doing it I started it now so when I'm in the process and the budget was initially and and here's the thing as well if you don't realize the budget was initially 60 000 pounds so the money was accounted for for that right but when we got into the project I was like you know what we might as well just do the basement as well put a podcast studio in the basement actually let's do this let's do that the material prices went up right so now we're above 200 grand yeah I could have stuck to the budget but I was like no I got a vision for the shop and I wanted to stick to that vision and also I could have slowed down and said okay cool let's do this in parts so let me go get the money and borrow it like over the next couple months and then do the build maybe a few months later yeah but I didn't want to obstruct the shop I only want to obstruct the shop once yeah so I was like no we're gonna do it in this season so when I'm looking for money now in that season I'm like okay well I need to find money so if a company says to me right now I will give you 40 000 pounds but you're gonna pay back you have to pay it back in 12 months and you're gonna pay back other 12 00 pounds in interest right I'm like I need the money right now and they say that and they're saying to me they'll give it to me in two days so I'm like oh okay cool whereas if I come to you now and I say I want money you're finding me you're finding me a lender but that's gonna take three months.
• 16:32
  SPEAKER_02: Yeah I haven't got three months and that's yeah obviously it's not that we can't find those lenders but this is a really good point you make we can but we understand that in that case you're working on a project and what you need is project finance and what that basically means is project finance often tends to be a lot lower well the cost is lower because they understand it's a project and projects tend to go wrong it's long term money because projects not only have to be built but then they have to provide a return on that project right so they give you the opportunity to recoup the money and effectively it's it's long term money it's usually like five year money project finance three to five year money in some cases ten years right what those other people are offering you those other intermediaries was effectively working capital yeah which is I've got a need right now this moment and we could always go and do that right but we wouldn't do that for you because we understand that's the wrong type of capital because that project like i you extending the shop right bringing in four more barbers you might it might take you six months to ramp up all of those four barbers in fact it might take you four months to fill those chairs yeah then six months for those barbers to ramp up and start making your return and then another 24 months for that return to actually quantify the amount of money you've you've you've you've invested yeah into that project right so getting a short term loan wouldn't make sense for you and I guess that's where we're very different to a lot of other intermediaries we're really trying to understand well what kind of finance do you need and why and I guess there's a piece around how do we educate but also support you in building out that plan that project plan of all right you need the money really fast well how can we finance this fast right how can we finance this over the next well how can we get you some quick financing because maybe your builders are on your back but how can then we refinance that over the long term because we realise that quick financing isn't going to be able to sustain you because you're gonna be paying through your nose on a monthly basis and I think that's where that's where I'm at right now.
• 18:23
  SPEAKER_00: Well exactly right and that's and that's why we had to raise you more money right now and also and no it's good and for people which are watching this something they need to also understand and learn from I say my mistakes even though you could call them mistakes but I don't really fully see them as mistakes yeah I agree with that as well and and I want to say something about that right which is you mentioned you get an idea and you want to action that idea really quick I don't think that's a bad thing.
• 18:44
  SPEAKER_02: I think that's one of the reasons why you are where you are today.
• 18:47
  SPEAKER_02: I think it's and this is why businesses often have multiple people right I think you are the visionary entrepreneur founder you are the person that sets the direction and goes for it.
• 18:59
  SPEAKER_02: You need a team around you who can be that CFO which often I guess we're acting as like a quasi uh a quasi-capital market solution for you but you need a team around you who can be that CFO be that COO and allow you to to have those visions and then the COO sets the project plan and the CFO talks about how you're gonna finance it but because so many small businesses don't have that infrastructure don't have that infrastructure it's really difficult and that's why we're constantly finding ourselves acting as like if not working with a CFO acting as a CFO or like a treasury department that effectively is helping the founders understand all right this is what you have this is how much you're gonna need to get through this project and this is how much I think you should be investing of your own cash and of debt capital into this project.
• 19:45
  SPEAKER_00: So I don't think it's your fault basically I don't even regret it I know what I'm doing in the sense of I know so when I'm doing these big loans I know what I'm doing yeah like I know what I'm taking on.
• 19:55
  SPEAKER_00: But even like right now this last project that I did where it cost over 20 grand and I took out like you know high interest loans that's because I needed money quickly cool I know that and now what I need to do is refinance all of that money now.
• 20:08
  SPEAKER_00: Now the issue which I want to explain to people and I want people who are watching to really understand this as well is refinancing is good but also you've got to understand if you do it this group you're gonna lose a lot of money.
• 20:18
  SPEAKER_00: Because right now with let's say two of the companies let's say two or three of the companies I've got financed with I can't one of two of them I think it's like interest is stepped.
• 20:32
  SPEAKER_00: Yeah you can't do it only repayment so whatever we agree to pay back I'm paying it back.
• 20:38
  SPEAKER_00: So if I pay it back early if I pay back after one month I'm still paying so example if I borrowed let's say if I borrowed 80 grand from a company as example and they say look on that 80 grand you're gonna pay us in interest 1500 pounds and it's over let's say one year if I pay it back in two months I still pay that 15 000 pounds.
• 20:56
  SPEAKER_00: So even though I'm gonna refinance it what's going to happen now is because I bought that money initially I'm paying back that so let's say I come to you and you guys borrow me the 80 grand now.
• 21:04
  SPEAKER_00: Yeah or no not in 8 grand the 95 000 pounds that 95 000 pounds is going to go to paying them their interest and now spreading over spreading this over five years which is more affordable.
• 21:15
  SPEAKER_00: Because right now the thing with me is I've got all these loans out and it's not that they're not affordable the main issue actually is it's not the affordability it's the time limit so I forgot a lot of times with these companies you'll find there's short-term loans yeah so it's like okay this will you know we'll give it to you over 12 months like the maximum amount of short term lenders will lend you money over it's like 18 months yeah you know and they don't want to do 18 months either they don't want they don't want to do 18 months over about two months but they don't actually want to do that ideally the most they want to do is 12 months because it's quick returns so it's like yeah cool I bought you 100 grand you pay us back 120 grand great quick return right and we're guaranteed to get that interest because we're not doing it as a it's interest on what you owe it's no we're bought you a hundred grand it's like a friend lender It's like a friend, it's like it's like it's like borrowing money from your friend.
• 22:02
  SPEAKER_00: Your friend says, Look, I'm gonna give you 10 pounds because give me back 12 pounds.
• 22:06
  SPEAKER_00: If you pay it back in an hour, you give back 12 pounds.
• 22:08
  SPEAKER_01: Yeah, right.
• 22:08
  SPEAKER_00: That's the agreement.
• 22:09
  SPEAKER_00: So, yeah, so that's the thing I want to say.
• 22:11
  SPEAKER_00: If you're gonna go with these like high interest lenders, just understand that a lot of times these lenders either do it where it's fixed or they do it another way, and this is another thing which you can you can get caught out by, where they say, Okay, no, we do it that based on what you owe and so on, but they make it as I think it's called a sliding scale, which means that the highest interest comes off in the first six months.
• 22:30
  SPEAKER_02: So that's called amortization.
• 22:32
  SPEAKER_00: Okay, so they're the official term.
• 22:33
  SPEAKER_02: It's very and you know this is how banks make their money, so yeah, you want to realize this, but your mortgage is amortized.
• 22:39
  SPEAKER_00: Yeah, I know that, I know that.
• 22:40
  SPEAKER_02: So when you're financing every two years, yeah, you realize very quickly you're not actually paying much profitable mortgage, you're not gonna pay your mortgage on the money.
• 22:46
  SPEAKER_02: You can at interest, you're paying more interest, yeah.
• 22:48
  SPEAKER_02: At the start, so amortization the way it works is you usually pay between 70 and 80 percent in the first well, yeah, say seven 75 and 65 percent in the first two to three years, and then your loan only starts, you only start actually paying into your principal towards the end of your loan.
• 23:06
  SPEAKER_02: So if you've got like a say a 24-month loan or 18-month short-term loan, and it's amortized, what you'll find is you might end up paying the first six months and saying, okay, after that, I'm gonna pay it all off.
• 23:18
  SPEAKER_00: But after those first six months, you paid off about 70, 80% of what you owe.
• 23:22
  SPEAKER_02: You pay off 70%, 80% of your interest, and you still owe like 90%.
• 23:25
  SPEAKER_02: Yeah, so they actually make a much higher return.
• 23:28
  SPEAKER_02: Let's say they're say they're charging you 20%, right?
• 23:31
  SPEAKER_02: Which is relatively high, but let's say 20%, because that's kind of like high interest territory, right?
• 23:36
  SPEAKER_02: The low the low end of high interest territory.
• 23:38
  SPEAKER_02: Yeah, let's look at some of the other kind of high interest loans, right?
• 23:40
  SPEAKER_02: Really and truly, if you pay off that loan within say six months and it's a 12-month loan or 18-month loan, you might still end up, they might end up making a return of like 50-60% because they've logged all that interest, and then you're gonna then pay them that principal, which effectively allows them to kind of go and do more lending and you know just make a much higher return.
• 24:00
  SPEAKER_02: So you actually paying earlier is actually a good thing for them because they know that you haven't been paying down your actual loan, you've been paying the interest.
• 24:07
  SPEAKER_02: So amortization is definitely one of the ways where people get caught out quite often.
• 24:10
  SPEAKER_00: A lot of times, and I learned that myself.
• 24:13
  SPEAKER_02: I know you're supposed to look at your statement, like, how come to owe you this much?
• 24:16
  SPEAKER_00: Yeah, no, the is it's when you you get to a situation where you're like, Oh, okay, let me um let me pay it off now, I'll pay it off now.
• 24:23
  SPEAKER_00: You don't realize, okay, how much have I got left?
• 24:25
  SPEAKER_00: And you're like, wait, I've got majority of it still left, and you're like, but I've paid off this much money.
• 24:28
  SPEAKER_00: And when you look at the statements, you start realizing, okay, and that's why anytime now I look at loans, I'm always looking at the I look at I look at the first, I ask them what would I be paying in the first six months, and how much of the actual principal would I be paying off and how much of interest?
• 24:43
  SPEAKER_00: I always ask that question now because I've learned so it's like because you may sometimes people take loans out, right?
• 24:49
  SPEAKER_00: And they're thinking about refinancing it, but you don't realize, okay, cool, you're buying£20,000 right now, yeah, and this loan is over for two years with this company, two, three years, but you don't realize that you're paying majority of what they the interest in that first six months.
• 25:01
  SPEAKER_00: So they they're cool with it.
• 25:02
  SPEAKER_00: They're like, we don't mind you actually clearing it at six months because by then the interest we were gonna charge, we we've got 70, 80% of it.
• 25:10
  SPEAKER_00: So cool, get the rest of our money, move on.
• 25:12
  SPEAKER_02: But what but I learned that another thing they do as well is they don't tell you the fees they're charging you.
• 25:17
  SPEAKER_00: Yeah, the fees, yeah, that's another thing as well.
• 25:18
  SPEAKER_00: They always tell you about you know the interest.
• 25:20
  SPEAKER_00: It's like there's so many companies like you saw a company the other day which I was looking at, yeah, and they'll talk about 7,000 pounds.
• 25:25
  SPEAKER_02: Just uh I remember one of the one of the offers was like was like 21,000 pound arrangement fee.
• 25:30
  SPEAKER_00: Yeah, and I was like, Yeah, yeah, right, yeah, 21,000.
• 25:32
  SPEAKER_02: That's like that's like I think that was like 18% of the loan itself, right?
• 25:36
  SPEAKER_02: Because that that offer was 150,000 I think.
• 25:38
  SPEAKER_00: Something like that, yeah.
• 25:39
  SPEAKER_02: It's crazy, man.
• 25:40
  SPEAKER_02: It's crazy.
• 25:40
  SPEAKER_02: And look, that's one of the things that we've always tried to do.
• 25:42
  SPEAKER_02: We we always you know we always make sure all of our advisors are being transparent, we're being open, we're helping the client understand, we show them the like payment schedule.
• 25:51
  SPEAKER_02: Um but yeah, it's really interesting.
• 25:53
  SPEAKER_02: It's been interesting.
• 25:54
  SPEAKER_02: But I think people just need to be yeah, a lot more mindful because what it is is these a lot of these lending companies know when you need the money fast, by the time you see the contract and you see the payment schedule, you've probably already committed to spending that money.
• 26:07
  SPEAKER_00: Yeah, and once you need it, here's the thing, you're desperate.
• 26:10
  SPEAKER_00: You know, desperate people do desperate things, yeah, you know, and that's why I say so.
• 26:14
  SPEAKER_00: The mistake I say I've made, which I don't even fully see as a mistake, but let's just say that any mistake is that my lack of patience, yeah, because I could raise money more sensibly if I was willing to wait and take the time and maybe you know wait five months.
• 26:29
  SPEAKER_00: So if I was to plan ahead and say, okay, cool, I'm gonna do this now, I'm gonna do this in like a year's time, I could you know arrange better financing, you know, but because I'm like we need to do this now, yeah, yeah.
• 26:41
  SPEAKER_00: I need money right now.
• 26:42
  SPEAKER_00: So, yes, that's the situation I'm in, where it's like it's not like I'm just like, oh bro, it's because especially I've got two loans, right?
• 26:50
  SPEAKER_00: Where these two loans take a lot of money every month, right?
• 26:54
  SPEAKER_00: Now these loans will be covered in the next four or five months.
• 26:57
  SPEAKER_00: Yeah, in about four months, these loans are covered.
• 27:00
  SPEAKER_00: But if I can refinance these loans instead and stretch out that four or five months to three years, then my cash flow will be up.
• 27:10
  SPEAKER_00: And that's why right now for me, I'm just trying to refinance to get myself in a place where now I can get more money coming in than going out.
• 27:15
  SPEAKER_00: Yeah, because a lot of these loans are very short term, yeah.
• 27:18
  SPEAKER_00: So I'm in a process right now of refinancing them so we can stretch them out, and then it's like, okay, cool.
• 27:22
  SPEAKER_00: Let's say I've got£100 coming in, it could be like I've got£100 coming in, then I've got£80 going out.
• 27:26
  SPEAKER_00: Whereas right now it'd be like I've got£100 coming in, but I've got£120 going out.
• 27:31
  SPEAKER_00: Yeah, and it's because of these short-term, I've got about three short-term loans, yeah, right?
• 27:36
  SPEAKER_00: So I just need to stretch them.
• 27:37
  SPEAKER_02: No, no, no, that's not what you mean.
• 27:38
  SPEAKER_02: I mean, I mean, I remember when we done the last refinance with um that CDFI.
• 27:44
  SPEAKER_02: And I don't know how much that saved you, but I could see straight away in your cash flow just by paying, I think how much did they provide you?
• 27:51
  SPEAKER_00: Two twenty, something like that.
• 27:53
  SPEAKER_02: Two twenty.
• 27:54
  SPEAKER_02: And I can see just by your your your cash flow, that was gonna kind of save you thousands a month.
• 27:58
  SPEAKER_02: A lot of people don't realise that, yeah, it may seem small, but actually, when you got three, three, four extra thousand pounds a month at the end of the year, that's a profit of 45,000, 46,000, 48,000, or whatever it is, right?
• 28:11
  SPEAKER_02: Um, and that could be one person's salary.
• 28:13
  SPEAKER_02: So refinancing is a big play that we're working on.
• 28:15
  SPEAKER_02: And obviously, we want to continue to work with people like you and others to see how we can help you do that best.
• 28:19
  SPEAKER_02: I mean, I'll be honest with you, right?
• 28:20
  SPEAKER_02: This is actually kind of like a glow or a nationwide pandemic.
• 28:24
  SPEAKER_02: The government are realizing that actually is a problem.
• 28:26
  SPEAKER_02: Because a lot of businesses now are liquidating because of this just these issues, right?
• 28:30
  SPEAKER_02: They realize that they can't cover their costs because they've taken on all this short-term capital, particularly during like COVID and that COVID time period when things were going really well.
• 28:40
  SPEAKER_02: So you could take money and pay it back, but things aren't as well anymore for some businesses anyway.
• 28:45
  SPEAKER_00: But let's make this clear, I cover all of my finances.
• 28:48
  SPEAKER_02: Yeah, yeah, yeah.
• 28:48
  SPEAKER_02: That is one thing I've impressed about, really.
• 28:51
  SPEAKER_00: Like, I don't miss it.
• 28:52
  SPEAKER_00: None of my friends are missing.
• 28:55
  SPEAKER_02: And and and and that is the thing about credibility, right?
• 28:57
  SPEAKER_02: Once you're credible, and it's how a lot of big businesses operate, you don't actually need a lot of cash because people are always willing to support them because they know they're gonna pay back.
• 29:06
  SPEAKER_00: Even though I've got more money going out than coming in every month, I manage to cover everything.
• 29:12
  SPEAKER_00: And people always ask me how.
• 29:13
  SPEAKER_02: To be honest, how do you know what?
• 29:17
  SPEAKER_00: To be honest, it's not even rocket science, it's just borrowing.
• 29:19
  SPEAKER_00: It's just it's just as they say, like, and every business owner I think knows this.
• 29:23
  SPEAKER_00: It's borrowing from Peter to pay Paul.
• 29:26
  SPEAKER_00: It's just that simple.
• 29:27
  SPEAKER_00: You say you're just moving things around.
• 29:28
  SPEAKER_00: You know, sometimes you're taking the money off your credit card, but then you pay your credit card back, then you take it back off your credit card.
• 29:35
  SPEAKER_02: It's good that you're saying this, right?
• 29:36
  SPEAKER_02: Because I think there's one thing you mentioned about like PL, profit and loss, or being profitable, but cash flow and PL are two different things.
• 29:45
  SPEAKER_02: Often there's businesses, there's a lot of businesses that are very profitable, but they have very bad cash flow.
• 29:49
  SPEAKER_02: Yeah, and the reason why they have bad cash flow is because they don't really know how to do what what you do, right?
• 29:54
  SPEAKER_02: Which is how do you manage your your in your income ins and outgoings, right?
• 29:58
  SPEAKER_02: How do you manage your payment terms?
• 29:59
  SPEAKER_02: How do you manage your um your your cash flow conversion cycle?
• 30:03
  SPEAKER_02: How do you understand like all of these different things?
• 30:06
  SPEAKER_02: Because you can make 100 grand today, but if you invoice for it and it doesn't get paid for three months, you can't spend it.
• 30:12
  SPEAKER_03: Yeah.
• 30:12
  SPEAKER_02: Does that make sense?
• 30:13
  SPEAKER_02: Yeah, and a lot of businesses don't see this.
• 30:14
  SPEAKER_02: So I I think that's an I think that's another another session, right?
• 30:17
  SPEAKER_02: But PL and cash flow are two different things, definitely.
• 30:20
  SPEAKER_02: Uh and I think you've figured out a way.
• 30:21
  SPEAKER_02: Um, yeah, I won't say it's the most though, it's the most it's the most it's the most normal way, right?
• 30:27
  SPEAKER_02: Um, but you've figured out your own way to to kind of manage cash flow and and keep keep keep keep the cash flowing.
• 30:34
  SPEAKER_00: Yeah, but because right now for me is I've done all the things I want to do in my business.
• 30:38
  SPEAKER_00: So now I'm like, okay, cool.
• 30:40
  SPEAKER_00: Now I'm just focusing on refinancing things properly, yeah, focusing on my cash flow and so on.
• 30:45
  SPEAKER_00: Yeah.
• 30:45
  SPEAKER_00: And now it's like I've maximized the potential of the shop.
• 30:48
  SPEAKER_00: Yeah, yeah, you know, I've knocked down the back walls, I've built the podcast studio downstairs for me.
• 30:53
  SPEAKER_00: Yeah, you know, I've added four chairs.
• 30:56
  SPEAKER_01: Yeah, yeah, yeah.
• 30:56
  SPEAKER_00: So now it's like, so now it's like okay, I've done these things now.
• 30:58
  SPEAKER_00: Now I can just now if you just focus on okay, let's focus on now making money.
• 31:01
  SPEAKER_00: I've done what I need to do with the barbers, barbers are doing well in the shop, you know.
• 31:05
  SPEAKER_00: So for me, it's kind of like everything with the business has been done correctly.
• 31:09
  SPEAKER_00: Now I can focus on me, the profits of the business, focus on what I'm making from the business and so on.
• 31:15
  SPEAKER_00: Before I've just focused on the business, making sure the business does well.
• 31:18
  SPEAKER_02: Well, yeah, and you know what's been interesting, right?
• 31:19
  SPEAKER_02: I think that's a really good point you make, right?
• 31:22
  SPEAKER_02: Because now you're gonna start to see to read the rewards, and this is why I guess you probably don't think taking loans were a bad option.
• 31:28
  SPEAKER_02: Because if you took equity or you took investment from someone, they would own part of it.
• 31:33
  SPEAKER_02: Not only would they own part of it, but they might not have allowed you to do the things you needed to do.
• 31:37
  SPEAKER_00: That was a bit that's another big thing.
• 31:39
  SPEAKER_00: The reason why I didn't take investment is because I thought I can't have someone else involved in this because there are things I want to do which are unorthodox, and I know that, and I know and they might not get that, right?
• 31:47
  SPEAKER_00: And if you were investing in my business right now, you may be like, oh, I'll do that.
• 31:51
  SPEAKER_02: Yeah, exactly.
• 31:51
  SPEAKER_02: And then it causes issues, then you can't really grow the business, and then you want to be in this point now where you can say, you know what, I'm gonna start cutting my costs, we're gonna get to 20% margins, a million pounds, 20% every year, that's£200,000.
• 32:02
  SPEAKER_02: That isn't bad, you know, if you're kind of sitting at home for you know three, four days a week.
• 32:06
  SPEAKER_00: Yeah, because everyone's gonna want their money now as well.
• 32:07
  SPEAKER_02: You're gonna think exactly right.
• 32:08
  SPEAKER_02: The investors start telling you, forcing you to do things, and it's which I don't want to do, you know, it's hard.
• 32:12
  SPEAKER_00: There's some endorsements I might even not want to take because of my ethics, and then investors are like, well, we need the money, you know, or when I'm like, actually, I'm gonna pay this staff member money so that he can pay his bills.
• 32:22
  SPEAKER_00: Exactly, right?
• 32:22
  SPEAKER_00: I'm gonna pay them more, or I'm gonna give them a loan, right?
• 32:24
  SPEAKER_00: You know, instead of um instead of just buying someone else who's gonna bring him money, like um, then yeah, then it's like the investors might be like, yo, um, why you doing that for?
• 32:42
  SPEAKER_00: Why are you paying that person that type of money for?
• 32:44
  SPEAKER_00: Why are you helping that person out?
• 32:45
  SPEAKER_00: So because I had a vision for the business, for me, it's like the vision for the business was more important, and I just knew that once I fulfilled this provision, I know the business would make money.
• 32:53
  SPEAKER_00: Like I've always thought about the business making money, I always knew how the business will make money, yeah.
• 32:57
  SPEAKER_00: But I just thought I need to get the business operating a certain way for it to make that money.
• 33:01
  SPEAKER_00: And now we're coming come coming towards the end of that kind of like plan, you could say, I could see I could the money's coming in.
• 33:08
  SPEAKER_00: The funny thing is, the money is coming in, the business makes a lot of money, it's good money, it's just now all the money's being put into it through all these loans.
• 33:15
  SPEAKER_00: I need to pay back these loans, yeah, and then I will be reaping the rewards.
• 33:20
  SPEAKER_00: And even before that, as I said, as long as I you know start refinancing these loans properly, then it's like okay, I'll get to the point when now more money is coming in, then money is going out.
• 33:28
  SPEAKER_02: Yeah, yeah, yeah.
• 33:29
  SPEAKER_02: No, we'll get there, man.
• 33:31
  SPEAKER_02: That's business, man.
• 33:32
  SPEAKER_02: It takes a long time, it's not easy.
• 33:33
  SPEAKER_00: This is business, like you said, right?
• 33:35
  SPEAKER_00: This is ownership, right?
• 33:36
  SPEAKER_00: This is this is a bit of this ownership.
• 33:38
  SPEAKER_00: This is why I actually called uh the podcast this is ownership, because it just hit me like this is ownership.
• 33:46
  SPEAKER_02: It's hard, it's hard, crazy.
• 33:48
  SPEAKER_00: Is this is ownership, you know.
• 33:50
  SPEAKER_00: A lot of people don't understand it, but this is ownership.
• 33:54
  SPEAKER_00: And when I put that video out about being broke, the amount of messages I got back from people from owners, yeah, who was just saying, bruv, people don't understand.
• 34:02
  SPEAKER_00: Like the amount of so there's loads of people that got back to me who didn't understand, like you know, who were like worried and concerned, but then there were owners who got back to me who just like, bruv, people just don't get it, you know, they just don't get it, you know.
• 34:15
  SPEAKER_02: So it's a lonely journey because not many people are willing to take that risk on themselves, isn't it?
• 34:18
  SPEAKER_02: To like really build something, like to build something from scratch, you know.
• 34:22
  SPEAKER_02: Like how many jobs are you creating, how many people are you paying?
• 34:25
  SPEAKER_02: This is something you built from scratch, you know, and you're still able to pay yourself.
• 34:29
  SPEAKER_00: Well, I don't really get paid myself.
• 34:32
  SPEAKER_02: Not yet, not yet, anyway.
• 34:33
  SPEAKER_00: Not yet, not yet, not yet, not yet, not yet, not yet, yeah, not yet, but soon.
• 34:37
  SPEAKER_02: I mean, one of my mentors always told me, like, you've got to see businesses, particularly when you own this type of business, because there are some businesses that need that capital injection, that need that equity injection.
• 34:46
  SPEAKER_02: There are others that maybe don't, right?
• 34:48
  SPEAKER_02: And yours is probably one that doesn't need that capital injection from an investor standpoint.
• 34:51
  SPEAKER_02: Yeah, but what it was sending me is like you've got to look at a business like a baby.
• 34:54
  SPEAKER_02: Would you expect your baby at 10 years old to be paying you back?
• 34:56
  SPEAKER_00: No.
• 34:57
  SPEAKER_02: All the money you invest into it, no, right?
• 34:59
  SPEAKER_02: No.
• 34:59
  SPEAKER_02: Um, so it's really these things you've got to take into the original, and it is scary, right?
• 35:04
  SPEAKER_02: Because you think, wow, like, am I really gonna be doing this for 20 for 16 years?
• 35:07
  SPEAKER_03: Yeah.
• 35:08
  SPEAKER_02: My son, if I had a son, he would be paying me back from his first job at 16 or 17 or 18.
• 35:12
  SPEAKER_02: Or if he went if he goes to uni, it might be 22.
• 35:14
  SPEAKER_02: Yeah.
• 35:15
  SPEAKER_02: And you think yourself, am I really gonna be doing this for that long?
• 35:17
  SPEAKER_02: But it just is the journey, right?
• 35:19
  SPEAKER_02: And it just is really scary.
• 35:20
  SPEAKER_02: And I think you've gotta you've got to be able to kind of know that this is the direction we're going in, and I'm gonna keep pushing this direction because I believe, like you said, I've got a vision for it, and it will happen.
• 35:28
  SPEAKER_02: But it goes back to that point, it's lonely.
• 35:30
  SPEAKER_02: Not many people are willing to do that.
• 35:31
  SPEAKER_00: Not many people, you know, ownership is not for everyone, and that's not a discouragement.
• 35:38
  SPEAKER_00: This is the reason why you put out the rules.
• 35:40
  SPEAKER_00: Like, a lot of people don't realize that loads of owners go through this, they just don't talk about it.
• 35:43
  SPEAKER_00: Even someone messaged me yesterday.
• 35:45
  SPEAKER_00: Shout out to him, I'm not gonna say who it is, yeah, but he put out this video about something that happened in his business, and he actually just messaged me and said, Hey, you know, thanks for the inspiration for me just to put it out.
• 35:54
  SPEAKER_00: Yeah, and I didn't say nothing to him, he just saw my video and thought, actually, why am I hiding like how hard it is, how hard it is, or things that have gone wrong.
• 36:02
  SPEAKER_00: And I was just like, Oh, okay, great, because every owner understands it.
• 36:05
  SPEAKER_00: Yeah, the consumers who don't, right?
• 36:09
  SPEAKER_00: The clients, you know, the consumers, the customers, you know.
• 36:11
  SPEAKER_02: Do you know what I think it is?
• 36:12
  SPEAKER_02: Because obviously, as you know, I own Lendo, right?
• 36:14
  SPEAKER_02: And I think it's like it's the constant, like every month, no matter what happens, money is coming out of your account.
• 36:20
  SPEAKER_02: Doesn't matter if people have worked, it doesn't matter if they haven't worked, it doesn't matter if they've done well, they've done bad, it doesn't matter if if you're going through tough time, if they're going through tough time, like it's just consistent.
• 36:28
  SPEAKER_02: At the end of every month, you've got to be on the clock, you've got to show up every single month for everyone else, and that's sometimes and also your home life.
• 36:36
  SPEAKER_02: Yeah, so yeah, so it's like your home life, you've got to show up.
• 36:38
  SPEAKER_02: And this is why they often say, like, get into your trade or your craft before you get married.
• 36:43
  SPEAKER_02: Because I definitely agree with that because you can it you you have to be selfish to be able to even to get to where you are, you would have had to kind of like spend probably 10 hour days for how long?
• 36:52
  SPEAKER_00: To be fair, with me, the how it's happened with me to be honest, is I've had to sacrifice to sleep.
• 36:57
  SPEAKER_00: So I'm there with my children, my wife, and I'm there at work.
• 37:00
  SPEAKER_00: So that's why I work so early.
• 37:02
  SPEAKER_00: I'll be at work at 5 a.m., I'll be at work at 4 a.m.
• 37:04
  SPEAKER_00: I really respect that.
• 37:05
  SPEAKER_00: I'll go, I'll stop work and take a break if need be, go take my kids to school, come back to work, finish working a little bit early, pick up my kids.
• 37:12
  SPEAKER_00: I've been at work with my kids on my back.
• 37:14
  SPEAKER_00: Yeah, because I'm I've seen it.
• 37:15
  SPEAKER_00: So for me, it was like I want to make sure that my children don't don't don't ever be like there was a season when I wasn't, I wasn't there.
• 37:21
  SPEAKER_00: It's like, no, yeah, in your memory, I was always there.
• 37:24
  SPEAKER_00: You can't say that, you know, you can never be one of those kids.
• 37:25
  SPEAKER_00: My dad wasn't around.
• 37:26
  SPEAKER_00: No, no, no, no, no, no.
• 37:27
  SPEAKER_00: You can't be one of those kids.
• 37:28
  SPEAKER_00: Your dad was around, you know.
• 37:29
  SPEAKER_00: I I'm dropping to school.
• 37:30
  SPEAKER_00: I don't see me.
• 37:31
  SPEAKER_00: I'm I see all the mothers there, I'm there dropping to school.
• 37:37
  SPEAKER_00: This will not be your story.
• 37:38
  SPEAKER_00: My dad was not around.
• 37:39
  SPEAKER_00: I'm with you all the time.
• 37:40
  SPEAKER_00: I've got your game, training, swimming, and so on, right.
• 37:42
  SPEAKER_02: Honestly, I've always respected that about you.
• 37:44
  SPEAKER_02: Like, I've seen Macquello in the shop, and like you're getting from school, you're picking them up, you're bringing him back.
• 37:48
  SPEAKER_02: I've always respected that.
• 37:49
  SPEAKER_02: Like, even when I see your diary, like your times, you're working at 4 30am.
• 37:53
  SPEAKER_02: I know that you're doing that because you want to leave that by like eight, and then go drop McCullough and I'm always just sleeping.
• 37:57
  SPEAKER_00: Yeah, because they'll be sleeping, they don't they don't see it.
• 37:59
  SPEAKER_00: So that's for me, it's been the balance that but that's but the sacrifice has been sleep.
• 38:04
  SPEAKER_00: Now I'm not promoting this because at the end of the day, sleep, not sleeping can kill you.
• 38:08
  SPEAKER_00: No, just being frank about it.
• 38:09
  SPEAKER_00: So, right now, I'm in a season now when I actually know I need to focus on now sleeping, you know, sleeping earlier because it's all good saying yes, I was there for my children, but for how long?
• 38:19
  SPEAKER_01: Yeah, because you yeah, yeah, yeah.
• 38:21
  SPEAKER_00: Because that's great.
• 38:21
  SPEAKER_00: I was good, they had a good moment where it's like, yeah, like good 10 years, then what then I started deteriorating because I'm not sleeping.
• 38:26
  SPEAKER_00: Yeah, yeah, so I never actually even want to promote the idea of like just grind, but I'm saying if you could do this before you got married and before you had children, right?
• 38:33
  SPEAKER_00: Yeah, and spend all this time focused, then it's easier.
• 38:36
  SPEAKER_00: And also, what I say was fortunate for me is I was working hard before I met my wife.
• 38:40
  SPEAKER_00: Yeah, so the journey started already.
• 38:42
  SPEAKER_00: Yeah, my business, yeah.
• 38:44
  SPEAKER_00: What we were 13 or 14, so the business had already started then before I even knew it, right?
• 38:50
  SPEAKER_00: So yeah, but guys, as I said, this is ownership.
• 38:55
  SPEAKER_00: Honestly, this is ownership, man.
• 38:57
  SPEAKER_00: I will leave you with even in the cut with slider cuts, and I'll be speaking today to Demi who owns Lendo.
• 39:05
  SPEAKER_00: And this has been the collaboration of In the Cut with Slider Cuts and the podcast This is ownership.
• 39:12
  SPEAKER_00: Peace.