Solving Payroll Problems With Flexible Funding
When other brokers had not understood the assignment, Risecap came in and sourced funding options that were cheaper and more appropriate for this company’s needs.
Background
This company had a 10+ year track record of optimising pricing strategies for large FMCG clients.
They had a stable income of £8 million annually, but were recovering from a challenging previous year.
Around 100 people were employed by them.
Funding request
The CFO needed to get access to money to pay new employees in the period between starting at the company and starting to bill client work.
Other brokers had offered fixed-term loans of up to £250k over five years, all of which required full personal guarantees.
The business would end up paying 12–15% interest regardless of whether or not they used the funding for payroll in any particular month.
The company leaders came to Risecap to explore other, less obvious, options.
How we helped them RISE
Instead of a fixed-term loan backed by a personal guarantee, Risecap instead sourced a revolving credit function of £500k at 8.3%.
This allowed the business to access funds when needed, but only pay interest on what was taken out.
A limited personal guarantee was required due to the dip in revenue the previous year, but the lender was prepared to remove the guarantee once EBITDA improved.
As the business grows, so could the amount of credit available.
“Many thanks for your help, I am very pleased with how it progressed and the outcome reached.
I will have no hesitation using you guys again and will recommend you to my colleagues!”
Ian Nicholson
Fractional CFO
