Commercial Finance Case Studies
Well-established coach company
Marketing Exercise Saves Travel Company
Following a marketing exercise by our team, a North West-based, well-established coach company was acquired by a competitor, saving the business from closure and the jobs of 60 local staff. Recent trading had been very challenging so the business had sought a strategic partner to provide a stronger business platform and synergies for the future. Sensible negotiations meant the sale did not inconvenience passengers or disrupt services. The buyer acquired a business with an enviable reputation, strong brand and market position, allowing it to further develop its position in the market.
Steel Hoardings Manufacturer
Finding a Lender
A steel hoardings manufacturer with a supply and fit service for the house building sector. Following the company administration of the existing business we were introduced to the director to find a factor willing to fund Newco. The sector and debt are difficult and both were unattractive as a lending proposition to both banks and independent factors. This case proved difficult to find a willing lender given the nature of the debt and the sector it served. Following numerous calls to our large network of lenders we established two lenders willing to provide a facility. The directors not only received funding for the business, but were offered a choice of lender and therefore they were able to obtain a competitive agreement. We also helped the business in finding public liability insurance and contract hire funding for his vehicle requirements.
Raising Business Finance
New start business
The directors were new to raising business finance so we facilitated a meeting with two banks. The business required initial stock finance, a working capital facility and also a banking relationship. Our approach was to access these facilities through our high street bank connections. Our team of specialists worked with the directors over a number of months and secured a commercial loan of £900,000. In addition, they we helped the directors source their business insurance and trade debtor credit insurance. Initially the business model suggested that the company required both a commercial loan to fund the purchase of stock and then an invoice finance facility to fund working capital. Our team helped the business structure finance requirements following the successful introduction of the commercial loan to the extent where the company no longer required an invoice finance facility.
Confidential Finance Facility
A fashion clothing business
A fashion clothing business with annual sales of £1.9 million, where the directors had diversified into the property development market. The directors had used cashflow to fund their buy-to-let venture to the detriment of the core business. The existing bank invoice discounter no longer wished to fund the business on a confidential basis; however the directors were adamant that they required a confidential facility. By understanding the reason behind the fall out with the bank, our team were quickly able to recommend an independent factor that was prepared to provide the facility on a confidential basis. They were offered and accepted a £250,000 CID facility. Due to the deterioration in the business, the majority of lenders in this sector were unwilling to provide a confidential facility. Through our knowledge of the case we were able to find the required facility and liaise with the bank to ensure a smooth transition to the new facility.
Pre-pack administration/Asset-backed loan
A 13th Century building operating as a hotel had entered voluntary administration when it could no longer service its debt. Its recent refurbishment plans had overrun at a huge cost and the business was struggling to pay its creditors.The hoteliers approached their administrators who tasked Begbies Traynor with finding a solution to help the hotel back on its feet. The Challenge: There was simply no appetite for lending by the mainstream financial providers given the level of debt faced by the hotel. As independent brokers, we had to work extremely quickly to keep the trust of the hotel’s creditors while the business traded through this tough period. The Solution: With our expertise, we surveyed the marketplace and sourced a niche lender who was willing to take the historic building as its main form of security. By obtaining a new valuation of the property, the lender increased its loan allowing the hotel to exit administration under new joint ownership, and start afresh. It was a fantastic result. The process saved over 100 jobs whilst maintaining a wonderful, traditional hotel and a beautiful British landmark. What this case shows: With the right professional advice and contacts - and by using a truly independent firm to secure finance - the company was able to restructure and continue to trade in a much stronger position.
An exciting Mediterranean restaurant group had established themselves in the South West and were looking to expand. Having developed a strong reputation as an exciting and fun place to dine, they were keen to diversify their restaurants and develop into new locations. Having just found the perfect site, they realised it needed a complete fit-out. Due to their ambitious plans this required financing for all of the high quality equipment necessary for the restaurant to function. The Challenge Although the existing restaurants in the group were very profitable, the nature of the equipment meant that funders would only advance so much against it, leading to a shortfall if only dealing with one lender. The Solution We syndicated the deal out to three funders, allowing the customer to get all the equipment needed at the same time. Each lender knew the others were involved, with each funding their maximum amount based on the proposal and taking an equal share of the supplier’s total invoice. What this case shows This deal clearly illustrates the value added by an intermediary. Alone, a single lender wouldn’t have fulfilled the financial needs of the restaurant, which in turn would have prevented their growth- even though they could prove they were a profitable business. So, by bringing the various lenders together we were able help them develop the business, and set up a stunning restaurant with fantastic new catering equipment.
Early this year, we were approached by a recruitment consultancy to explore their options after the bank refused to extend their overdraft and had moved them onto its invoice discounting facility. Early this year, we were approached by a recruitment consultancy to explore their options after the bank refused to extend their overdraft and had moved them onto its invoice discounting facility. The Challenge The bank’s standard invoice discounting facility was too costly because it was unsuited to the structure of the company - which specialises in providing both permanent and temporary placements. This led to the difficult task of finding a solution that could compete with the rates of a mainstream bank; which always proves challenging. The Solution Having come to us, our team of experts worked with the owners to understand what product would match the business’ service. We sourced an alternative invoice finance provider who could offer a transparent facility in a very short period of time. More importantly, the facility gave the best deal for the dual nature of the company’s staff placements. What this case shows? There are now many great alternatives to your bank. We work to understand your business and match you to specialist lenders that can offer terms that fit your specific case – something that has typically been missing from the SME market.